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As noted in article as per terms of their lease MTA had to either buy GCT by 2019 or loose any exclusive rights to do so. That would have opened up the game to anyone with a large enough bankroll, and currently there are plenty of those in RE world over that $35 million is a rounding error.
This all goes back to the bluestocking movement spearheaded by Jackie Kennedy to save Grand Central Terminal from going the way of the old Penn Station head house.
Penn-Central RR was broke and going bankrupt; they wanted to plant a huge tower over GCT by selling off rights. Jackie Kennedy et al saw things differently and got the newly created LPC to landmark the place thus stopping Penn Central's plans in their tracks. Penn Central sued that NYC was preventing it from realizing value on the property by landmark designation; but the SCOTUS disagreed and sided with Mrs. Kennedy Onassis and NYC.
To prevent GCT from being basically demolished by neglect (and when you look at the old Penn Station head house before it was torn down, GCT wasn't that far off), with urging by same liberal/progressives the MTA stepped in and took a long term lease on the property.
Penn Central was broke anyway, so they wouldn't have had the vast funds required to maintain much less restore GCT, but the MTA has poured billions into the place.
Which brings us to today's actions. MTA must either s**t or get off the pot. If they didn't buy GCT in today's "world class New York City" someone else surely would have, then where would the MTA be?
It makes sense to buy given the cost for renting. It’s crazy that the air rights for Grand Central were recently sold for $240 million and MTA will be seeing none of that.
Does this mean that MTA also gets the revenues for renting out the concessions?
It makes sense to buy given the cost for renting. It’s crazy that the air rights for Grand Central were recently sold for $240 million and MTA will be seeing none of that.
Does this mean that MTA also gets the revenues for renting out the concessions?
Again, MTA has a long term *lease* on GCT, they do not own the place. A venture capital group bought GCT from American Financial years ago. GCT only had an option to purchase the station and tracks/ROI, but air rights were not part of that lease deal.
"Midtown TDR Ventures, LLC, an investment group controlled by Argent Ventures,[SIZE=2][109][/SIZE] purchased the station from American Financial in December 2006.[SIZE=2][110][/SIZE] As part of the transaction the lease with the MTA was renegotiated through February 28, 2274. The MTA pays $2.24 million in rent and has an option to buy the station and tracks in 2017, although Argent could extend the date another 15 years to 2032.[SIZE=2][109][/SIZE] The transferable air rights remain the property of Midtown TDR Ventures"
What is interesting is that one of the lead architects for the current GCT was the first to invent the concept of air rights and started that ball rolling. Mr. Vanderbilt/the New York Central RR was thrilled!
Long story short the architect proposed covering all the rail yards to east and west of GCT tracks (as well as burying the ROI under Park Avenue. The newly created land could be sold or leased for development bringing New York Central money for basically nothing.
Few people know just how far north GCT property goes. Basically up to Waldorf Astoria and or Saint Patrick's. Which is why all those office buildings on Madison or Park Avenues have direct access to Metro North/GCT. Ditto for the Waldorf Astoria hotel.
Unlike Penn Station, Grand Central Terminal is just that; a rail road terminal where trains arrive, are turned around, stored, some light repairs, switched, etc.... For Penn Station while there are some side tracks everything continues out to Sunnyside Yards where the above actions take place.
The merger of Pennsylvania Railroad and New York Central Railroad into Penn-Central also created a holding company which held all the RR real estate assets. Penn Central Transportation company remained solvent long after Penn Central RR went bankrupt.
It makes sense to buy given the cost for renting. It’s crazy that the air rights for Grand Central were recently sold for $240 million and MTA will be seeing none of that.
Does this mean that MTA also gets the revenues for renting out the concessions?
One would assume if the MTA then becomes "owner" of GCT, then they would get said revenue from the concessions. It is possible to legally arrange something where retail is carved out of a property sale and kept by previous owner. Don't think that is going to be the case, but we shall find out when the deal is done.
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