By Al Barbarino
An agreement paving the way for the redevelopment of the Deutsche Bank Building site in Lower Manhattan will likely lead to a new hotel and residential project, the firm that recently appraised the site told Real Estate Weekly.
“Site 5,” as it is known, will “likely be purchased for a mixed-use development project consisting of a hotel on the lower floors and upper level residential apartments and not for office development,” said Robert Von Ancken and Jerry Sanders, chairman and executive managing director, respectively, at Landauer Valuation & Advisory, a division of Newmark Grubb Knight Frank.
The agreement, first reported by major newswires on this year’s Sept. 11 anniversary, requires the Lower Manhattan Development Corporation, which acquired Site 5 from Deutsche bank in 2004, to complete a 2006 agreement and turn it over to the Port Authority.
In exchange, the Port Authority would give the museum the title to the eight acres of land that it and the memorial occupy on the 16-acre World Trade Center site.
A statement from Governor Cuomo called the agreement “another milestone in our work to finally complete the site as a place where people from around the world can come to work, visit and remember.”
The building — heavily damaged on 9/11 and later slated to become home to 5 World Trade Center — was dismantled in early 2011 after years of mishaps and delays, including a fire in August 2007 that claimed the lives of two FDNY firefighters.
Because apartment properties in the area typically command rents that average between $60 and $70 psf, the new development with a residential component could command rents north of $70 psf, Von Ancken and Sanders said in an appraisal statement.
Recent neighborhood land purchases for similar development uses have generally sold for prices ranging from $250 to $300 psf of Zoning Floor Area (ZFA), which is the allowable development size for an improvement after considering its land size and Floor Area Ratio (FAR).
The site, zoned in the C6-9 district, has a floor area ratio FAR (the ratio of total building floor area to the area of its zoning lot) of “15” for commercial use and “10” for residential use, but that could potentially be increased to a maximum of 21.6 by combining several methods of achieving bonuses, according Von Ancken.
The appraiser said, “A potential 20 percent FAR increase could possibly be achieved with a ‘Plaza Bonus,’ but although the zoning also permits a ‘Subway Station Improvement Bonus,’ that is not a realistic option for the site,” the appraiser said.
The land swaps entailed in the agreement were stalled in part due to a political standoff over the running of the Sept. 11 anniversary ceremonies at memorial plaza, with the Governors of New York and New Jersey, who run the Port Authority, demanding more control over the ceremonies.
The agreement gives the two sides six months to finalize the exchange.