Real Estate Weekly
Image default
Deals & DealmakersFeatured

Grand Central Station owner wants $1.1B for air rights

Real estate investor Andrew Penson, the owner of Grand Central Terminal, is suing the city and developer SL Green for $1.13 billion, accusing both parties of making the 1.2 million square feet of air rights for the landmarked train station “unsellable” and “worthless.”

In a complaint filed earlier this week, Penson said that the city violated his property rights by allowing SL Green to build the planned One Vanderbilt office tower.

Grand Central Station
Grand Central Station

Penson claimed that the rezoning of the area around Grand Central, which he said involved the Department of City Planning working “privately” with SL Green, effectively allowed SL Green to build a 1,501 foot tall tower without paying him for air rights.

The proposal first surfaced during the Bloomberg administration. It was later approved by both Mayor De Blasio and the City Council. According to the complaint, the rezoning amounted to the violation of Penson’s Fifth Amendment rights because it allowed the city and SL Green to take “the property of a private citizen for the benefit of another private citizen without any public purpose.”

Penson, who purchased the station for $80 million in 2006, has come out of the shadows to criticize the One Vanderbilt project.

The low-key investor has made multiple attempts to shoot down the construction of the massive tower, even offering $400 million to buy the land from SL Green.

Last May, the City Council approved the project, with an agreement that includes $220 million in infrastructure improvements such as subway entrances and a park. The complaint pointed out that under the old zoning laws, SL Green would have had to pay Penson for his air rights and contribute $220 million for building public infrastructure.

Rendering of the One Vanderbilt base
Rendering of the One Vanderbilt base

Wiley Norvell, the deputy press secretary from the Mayor’s Office, declined to address the lawsuit. However, he defended the project, saying: “This initiative, approved by the City Council, is critical to helping New York City compete as a global center of finance and business, and to improving the public transit and infrastructure used by hundreds of thousands of New Yorkers every day.”

Penson bought the air rights for Grand Central at $60 per s/f. According to the lawsuit, its value has shot up to $880 per s/f. Penson contends that the damages sought in the case amounts to the “fair market value of property” before the rezoning.

SL Green did not respond to a request for comment by press time.

Related posts

Tishman Speyer’s The Spiral Earns CoStar’s Commercial Development of Year Honors


Institute for Entrepreneurial Leadership Partners with TruFund Financial Services to Help BIPOC-Owned Businesses Acquire Commercial Property


Grosvenor Diversified Property Investments commits €40 million (£35.5 million) as it makes first investment after publishing expansion plans