Citadel Agreed to Buy Air Rights for 350 Park Ave Office Tower

Citadel’s Ken Griffin and Steve Roth’s Vornado Realty Trust agreed to buy up to 525,000 square feet of air rights from the Roman Catholic Archdiocese of New York to facilitate the development of 350 Park Avenue, PincusCo reported.

The contract was signed at the end of January, but was not public until this week because of a petition filed in court, as churches are required to disclose sales of substantial assets.

The development team, which also includes Rudin Management, signed a deal to pay the Archdiocese $312.50 per square foot for the development rights, which are attached to St. Patrick’s Cathedral at 631 Fifth Avenue. The developers also need to contribute $62.50 per square foot to the Public Realm Improvement Fund, a Midtown East group which works to improve the business district. (An appraiser determined the price of the air rights to be $375 per square foot; when the PRIF contribution is subtracted, it comes out to the $312.50 per square foot figure.)

The per square foot basis of the deal is arguably more important than the total purchase price, because that hasn’t been determined. Under the agreement, the developers can buy up to 525,000 square feet of air rights, but could also buy as little as 315,000 square feet. That means the purchase price ranges from $98.4 million all the way up to $164 million.

The agreement lays out annual options for the developers to take more air rights. The deadline to opt into the full 525,000 square feet comes due at the end of 2026.

Representatives of Griffin, Vornado and Rudin did not respond to a request for comment from The Real Deal. A spokesperson for the Archdiocese of New York said that it is the church’s “hope that the money will go to the continued upkeep of the Cathedral.”

Fried Frank’s Jonathan Mechanic represented the buyers in the air rights deal. Mechanic did not immediately respond to a request for comment.

Griffin’s Citadel is working to develop a 51-story tower at 350 Park Avenue, designed by Norman Foster. Griffin’s firm is redeveloping properties master leased from Vornado and Rudin. Citadel would occupy roughly 54 percent of the 1.7-million-square-foot property, which would stand 1,350 feet tall.

Initial proposals pin the completion date of the project in 2032.

— Holden Walter-Warner