Air Rights, and What is Going On at the High School of Art & Design in Manhattan?

School of Industrial Art, 1959 (pictured at right).

See History of the school.

Have New York parents thought about the ban on cell phones as a result of the sale of air rights above some NYC public schools? If our air has been "sold/leased" to a company for $millions, the NYC BOE is certainly not going to want kids' cell phones to hamper the business deal, now are they. See the Telecommunications Act of 1996 which opened the way for cell towers on federal lands, compelling federal managers to consider them. Critics say there's no national policy that outlines when they may be rejected. (See "The Big Air Grab", TIME magazine, May 17, 1968: "In New York City, officials shrewdly plan to construct a number of future schools in air-rights developments. The schools are to occupy the bottom floors of highrise apartment buildings that developers will put up on airspace leased from the city. In some cases, the money received from the developers will more than pay the cost of building the schools" - emphasis added).

What happens to a community in need of new schools that are not in air-rights development areas? If this is the case, shouldn't the Bloomberg administration give money to construct new schools in an area where there is a need for seats rather than a need to get more money in return? Is Michael Bloomberg looking at school construction as a profitable venture only, as a business? Just asking.

Of course, the argument of parents that cellular antenae are potential hazards to the health of the children and adults in the school fall on deaf ears. (See also Dr. Kornhauser's report)

The Art Students' League sold the air-rights to Extell in 2006, and we are compelled to ask,if the rights are sold for $2 million or more, who gets this money if the air rights above a school are bought?? I looked at the lobbyists registered for Extell. Former NYC Deputy Mayor Mark Shaw seems to have made out well after he left the Bloomberg administration.

Private developers help squeeze in more desks for city schools
The Real Deal, January, 02, 2008

The biggest obstacle to building schools in New York City now is not money or political will – it’s simply finding the real estate.

Of the 63,000 desks proposed in Mayor Michael Bloomberg’s plan to construct new schools, the city has yet to find sites for about a fifth – nearly 13,000 – of them. The School Construction Authority has four real estate firms – Cornerstone, Newmark, Colliers and Cushman & Wakefield – under contract to scout potential school sites.

While in most cases the city develops schools on land it purchases or already owns, school construction officials are returning to an older strategy of joining with private developers to build schools as part of new residential projects. The model, pioneered during the fiscal crisis of the 1970s as a way to build schools at a lower cost to the city, has rarely been used since. But the Bloomberg administration revived the process, run through a public benefit corporation known as the Educational Construction Fund.

The World-Wide Group, for example, was tapped by the ECF in a 2006 deal to build new space for the High School of Art and Design and P.S. 59 in return for rights to build a 59-story residential tower at 57th Street and Second Avenue. Now with available space tighter than ever, some see the idea gaining more currency with developers and school construction officials alike.

“I thought way back in the late ’70s and early ’80s that this was the way to go for the future,” says John Caiazzo, former head of the Educational Construction Fund and now the director of real estate development for the DeMatteis Organizations, one of the city’s largest school builders (and the company cited for the crane disasters in NYC - Ed). “The city would probably want to develop as many sites as possible where they can develop a combined occupancy facility.”

That’s the framework that DeMatteis, in partnership with the Mattone Group, is using to build a new 32-story tower on First Avenue at 91st Street. The developers won a 75-year ground lease from the city to build on the site of an old, vacant school. Under the deal, they will build a new five-story, 72,000-square-foot middle school adjacent to their residential development, dubbed Azure.

The developers will pay the cost of both the $45.5 million school and the $103.5 million tower, which is set to be complete in 2009.

The tower will include 205,000 residential square feet and 4,000 square feet of commercial space. The deal will allow the developers to sell 127 co-op units starting around $1,100 per square foot. Leasing the property rather than buying it outright reduced their costs, Caiazzo says, giving the project a competitive price for the Upper East Side. They also benefited from buying the air rights over the school, adding about 23,000 square feet to the residential project.

“All the unused floor area above the school is transferred to the tower,” he says. “A lot of schools sit on valuable property, and they do not take advantage of all the floor area you can build on the site.”

The school plot is an L-shaped strip of land between 91st and 92nd streets in the middle of the block, next to the planned residential tower, which will front on First Avenue. While the desirable location may be a boon to developers, it also demonstrates the difficulty school builders are having in finding adequate space for their budgets. “It’s on an extremely constrained site,” says Paul Broches, (pictured at right) a partner at Mitchell/Giurgola Architects, which designed the school. “We were able to slide the school next to the apartment building.”

He adds, “what makes it complicated is the kinds of sites [we have] to work with.” He cited the small or oddly shaped lots, brownfields and other tough spaces that school builders consider. “They weren’t built on for a reason,” he says.

The space crunch is also evident at Millennium High School, which has occupied the 11th, 12th and 13th floors of 75 Broad Street in the Financial District since the city leased the space from JEMB Realty in 2003.

Reading, writing, renderings

Despite the scarcity of land, building schools is a booming business in New York City. The city’s current building plan calls for 110 new schools to start construction between 2005 and 2009. The capital plan, budgeted at $13.1 billion over the five years, is by far the city’s largest.

A large chunk of the spending, $4.7 billion, is slated for new school buildings. The rest goes to renovations, expanding existing schools and leasing space. The expansion outpaces what previous administrations had committed. The prior five-year capital plan, which covered 2000 to 2004, only spent $2 billion on building capacity, according to an assessment by the Independent Budget Office, the city’s fiscal watchdog. (Of that, $1.4 billion went to new school buildings.)

Bloomberg, who won direct control of the city’s schools from the Board of Education in 2002, proposed his ambitious construction plan the next year. The current plan has been expanded dramatically even since the first draft was released in 2003. Although the number of proposed seats remains at 63,000, the number of proposed new school buildings had ballooned from 76 to 110. That’s because many of the sites were too small to accommodate larger buildings. “We are committed to creating 63,305 seats,” says SCA spokesperson Margie Feinberg. “As locations are sited and the optimal number of seats is defined for each location, the number of buildings will fluctuate.”

The building plans come despite enrollment declines that school officials predict will continue into the next decade. New York’s public schools shed 49,000 students between 2000 and 2005, dropping from over 1.1 million to about 1.05 million, according to the SCA’s latest demographic data. In an annual document known as the Grier Report, demographers estimated that the public school population will drop below 900,000 by 2015.

The city is also in the process of closing schools that it says are failing; at least a dozen closures have been announced this year. Some of the schools will be phased out slowly. Others will be closed immediately and reconfigured in the same building – sometimes several smaller schools will share a building that once housed one large school.

Even with dropping enrollments, though, Feinberg says the current expansion is intended to relieve overcrowding that has persisted in many neighborhood schools for years. “While we project overall decline in enrollment, there are and will continue to be pockets of overcrowding and areas of enrollment growth,” she says.

Public/private partnerships may be the key to building schools in the future. Officials are already eyeing a 630-seat school near 37th Street and 10th Avenue in anticipation of the Hudson Yards redevelopment. The city is also reviewing the potential needs around developments on East 25th Street, Queens West and the Atlantic Yards, according to a memo in the latest version of the capital plan.

The school building boom isn’t exclusive to New York City. Nationwide spending on school construction projects completed in 2007 was expected to reach $21.8 billion, with $13.9 billion going to new schools, according to the annual School Construction Report by School Planning & Management, an industry trade magazine. The figure, up from $20.1 billion in 2006, eclipses school construction spending in any previous year.

“Educational facilities generally in a city are expanding due to the increased growth of a city. The city’s getting larger, [with] more people, more children, and it’s a number of seats the Board of Education has to provide,” says Robert Purcell, partner at Bostwick Purcell Architects in Port Chester, N.Y. His firm currently has four school designs under construction in New York City, including Gregorio Luperon High School at 165th Street and Amsterdam Avenue and three elementary schools.

The demographic pressures are evident in New York, but other factors have driven the school building boom as well. For Bloomberg to make his building plan a reality, the city needed an infusion of money from the state. That came in 2006, when the state agreed to pay for half the $13.1 billion plan as part of the settlement to a 13-year lawsuit that charged the state with shortchanging city schools for decades.

Another factor behind the flurry of school building is a reform that greatly cut the per-square-foot cost of new schools: In 2002, the city consolidated responsibility for such projects under the School Construction Authority. Before then, the SCA had shared its duties with the city’s Division of School Facilities. Work was plagued with cost overruns and delays, with no single agency held responsible for getting shovels in the ground, according to reports at the time. The merger, combined with more competitive bidding practices, cut the cost of building new schools (in 2007 dollars) from $590 per square foot in fiscal 2002 to $440 per square foot in fiscal 2007, according to the SCA’s Feinberg.

With available space as tight as ever, some expect the SCA to increasingly join with developers to incorporate schools into their projects. “The city is so in need of seats that they’re really open to any kind of collaboration where they can get land to put seats,” says Mark Lippi, a principal architect at RMJM Hillier, which currently has two city school projects underway. “They’re willing to sit down and work out the contracts and make these things happen.”
Author: John Tozzi
Copyright © 2007 – The Real Deal, Inc. , 158 West 29th Street New York, NY 10001 , 212-260-1332

Who are the De Matteis family? They are the owners of a construction company that was implicated in the NYC Department of Buildings scandal which cost Commissioner Patricia Lancaster her job. See the story "Corruption in NYC: Cranes Kill People in the City of Bribes".

From their website:
The DeMatteis Organizations is a family-owned and -managed group of businesses that provides construction services in New York and throughout the world. Its services include general contracting, renovation, and design/build delivery systems. The firm's portfolio encompasses work on luxury high-rise apartments, multifamily housing, office developments, landmark air rights towers, governmental and industrial buildings, combined-use structures, and specialty projects. Leon DeMatteis founded Leon D. DeMatteis Construction Corporation, the flagship business of the group that has grown to become The DeMatteis Organizations, in Brooklyn, New York in 1918. More from Hoovers »
820 Elmont Rd.
Elmont, NY 11003
USA
+1-516-285-5500 (Phone)
516-285-6567 (Fax)
Company website:
http://www.dematteisorganizations.com


School Overview (FAQ)
This report contains information about ART & DESIGN HIGH SCHOOL.
ART & DESIGN HIGH SCHOOL
Grade Span: 9th to 12th
District: NEW YORK CITY DEPARTMENT OF EDUCATION
Principal: MR SCOTT FELTZIN
Address: 1075 2ND AVE
NEW YORK, NY 10022-2801
Phone: 212-752-4340
Website: Click here to view website

I suppose some of you remember the story we posted on Parentadvocates.org previously about David Pakter in 2005. He was removed from his position at the NYC High School of Art & Design because he videotaped a music class for PS 59 elementary school kids; the Principal of the high school, Ms. Appell, had taken all the music away from the African-American/minority high school kids and made a deal to rent out the space to the mostly white students attending PS 59. David was one of the many whistleblowers of the High School of Art & Design, (there have been others, many others), many of whom held a rally outside of the school on June 10, 2008 to expose what they consider inappropriate policies implemented at the school by the current Principal Scott Feltzin. Mr. Feltzin is getting rid of the oldest teachers at the school any way he can, teachers there tell us.

One example of the ridiculous policies used by Mr. Feltzin and the NYC BOE is the case of "Ms. J", a tenured teacher with a perfect record. She started asking questions about the Principal and the curricula, and suddenly was told to leave her class and go to the principal's office. Mr. Feltzin told her that he heard that she was tearing at her shirt and babbling (none of this is true) and he ordered her to go to the Medical Office at 65 Court Street in Brooklyn and "have her head examined". She went, was seen by Dr. Ann Garner for 5 minutes, and declared "unfit" to teach. (I can tell you, she is one of the most sane people I know, and a very popular teacher at the school). Ms. J went to another psychologist who found her to be competent to teach and completely "sane"...but to no avail. In March Ms. J found out that as of January 1, 2008 she had been terminated, without any hearing or letter.

Rumor has it that the NYC BOE wants Scott Feltzin to remove the oldest teachers in order to make room for a new group, and if he does his "job" he will get his own apartment in the building that will house his school and PS 59, next door. Not a bad deal, if you can get it!

Then there's the strange matter of exactly what is going on after 5PM. Teachers have been told to leave the High School building before 5PM and not come back, due to "construction". Last week, after the June 10, 2008 rally, a teacher remembered that he did not turn off his computers, so he went back for a short time to turn his computers off. He was told to leave the school, and then a letter was put into his file. However, we located a complaint in April on the NYC DOB website for the High School of Art & Design, and found the complaint below:

Overview for Complaint #:1222095 = RESOLVED

Complaint at: 1063 2 AVENUE BIN: 1038593 Borough: MANHATTAN ZIP: 10022
Re: CLR STS THAT BUILDING CONSTRUCTION IS OCCURING ON THE WEEKDAYS FROM 7PM-11PM OR MIDNIGHT. NO SPECIAL VARIANCES ARE POSTED. WORK IS SEEN ON SAT & SUNDAYS AS WELL. PLS INVESTIGATE

Category Code: 04 AFTER HOURS WORK - ILLEGAL

DOB District: N/A
Special District: TA - TRANSIT LAND USE


Assigned To: EMERGENCY RESPONSE TEAM Priority: B
Received: 04/18/2008 11:52 Block: 1330 Lot: 13 Community Board: 106
Owner: BOARD OF EDUCATION

Last Inspection: 04/20/2008 - - BY BADGE # 1869 CAROPRESO DOMINICK EXECUTIVE
Disposition: 04/21/2008 - - I2 - NO VIOLATION WARRANTED FOR COMPLAINT AT TIME OF INSPECTION
Disposition Entered By: DBC 04/21/2008 15:37:29
Comments: NO CONSTRUCTION ACTIVITY

So, perhaps the inspection by Mr. Caropreso didn't look at the right area, or perhaps did not occur after 7PM? Who is getting the overtime pay???


If you visit CityRealty.com for Dec. 7, 2007, you can see the beautiful building that will house both the High School of Art & Design as well as PS 59 (see picture at right)

17-DEC-07
Tower at 250 East 57th Street will have high hour-glass waist
LINK

The latest wrinkle in angled towers in the city is the design by Skidmore, Owings & Merrill for a 59-story apartment tower for World Wide Holdings at 250 East 57th Street as part of the redevelopment of the High School of Art & Design and PS 59 at that location.

The tower appeared to have an extreme hour-glass pinched figure on its north facade based on a rendering that appeared yesterday in an article by C. J. Hughes in The New York Times. Another rendering obtained by CityRealty.com, however, shown at the right, shows the light-colored tower as seen from the East River.

The tower occupies the eastern portion of the large site on the west side of Second Avenue between 56th and 57th Streets. World Wide Holdings is leasing the site for 75 years and will make annual lease and PILOT (payments in lieu of tax) payments to the Educational Construction Fund that will cover the cost of both new schools, estimated to be $130 million, and generate additional revenues for other school capital projects.

The apartment tower and retail space and the 1,400-sear High School of Art and Design structures are being designed by Skidmore Owings & Merrill LLP and Ehrenkrantz Eckstut & Kihyn is designed the new PS 59, which will be expanded from 400 to 730 students.

Under the terms of an agreement disclosed in October, 2006, with the Educational Construction Fund of the New York City Department of Education, World Wide Holdings will build two new and expanded schools to replace the existing ones and the development will also contain about 170,000 square feet of retail space.

The high-rise 59-story glass tower over a retail base and according to the article David Lowenfeld, a principal of the World-Wide Group, the developer, said it will have 320 units, 60 percent of which will be condos priced at about $1,500 a square foot. Apartments will range in size from studios to three-bedroom units.

The first phase is expected to take three years and will involve the construction of the two new schools and during this phase PS 59 which is known as the Beekman Hill International School will be relocated to a new school facility in the boundaries of the existing school district.

The second phase involves the mixed-use tower in which 20 percent of the apartments available for rent will be affordable. According to the agreement, another 30 units of affordable housing will be built off-site in the boundaries of Community Board 6. The picture at left shows the new Art & Design High School on the left and the residential tower on the right.

The new development will also include community meeting places.
[more stats: 2nd Avenue; 50th street; 56th street; districts and zones in NYC.

The two schools will frame an expanded, mid-block, open space.

The fund leases air rights over schools to developers who build new schools and are able to use the air rights not used by the schools for their own purposes.

World Wide Holdings, of which Victor Elmaleh, a fine painter and former national champion handball player, is a principal, has developed more than 1,800 apartments in Manhattan over the last decade and its projects include 50 Murray Street, 53 Park Place, 88 Greenwich Street and the Milan on 55th Street and Second Avenue. It was a partner in the development of World Wide Plaza on Eighth Avenue at 50th Street.

The Educational Construction Fund was created in 1966 and it best known for its mixed-use developments such as the office-building/Norman Thomas High School on the southeast corner of Park Avenue and 34th Street and the apartment building/Robert F. Kennedy School on 88th Street between Park and Lexington Avenues.

From Betsy Combier: the NYC BOE website has the following information about "Educational Construction Fund":

The mission of the New York City Educational Construction Fund ("ECF" or the "Fund") is to build safe, secure learning environments. The Fund encourages comprehensive neighborhood development by constructing mixed-use real estate projects which feature new school facilities. The Fund increases the capacity of the New York City Department of Education to construct new school facilities, thereby increasing the number of seats for the entire school system.

The Fund was created by the New York State Legislature in 1967 and since that time has constructed projects that added over 18,000 school seats, 4,500 units of housing and 1.2 million square feet of office space in New York City.

ECF, as a financing and development vehicle of the New York City Department of Education, provides funds for combined occupancy structures including school facilities in New York City. The Fund builds combined-occupancy structures on City-owned land conveyed to the Fund by the City of New York. The school facility portion of the mixed-use project is financed via the issue of tax exempt bonds with a term of up to forty years. ECF uses ground rents, lease payments and/or tax equivalency payments from the non-school portion of projects to finance construction of its school facilities. Future revenues from the non-school portion(s) of the development are used to pay the debt service of the school facility

ECF-issued tax exempt bonds are backed by the credit of the City of New York.

State Environmental Quality Review Act
Negative Declaration
Notice of Determination of Non-Significance
January 30, 2008
LINK

December 16, 2007
Air Rights, Swapped for Schools
By C. J. HUGHES, NY TIMES

THE thought of shrieks from playgrounds during recess may till now have distanced developers from choosing sites near schools. But with buildable city lots in such short supply, they now appear willing to reconsider. (Azure building, picture)

Two Manhattan buildings are to rise close enough to schools that they will almost seem part of campus: the Azure, at 33 East 91st Street, and a condo-rental at 250 East 57th Street.

And if the schools and apartments end up looking similar, it’s because the same developers are to build both, under deals hammered out with city’s Educational Construction Fund, a division of the Department of Education.

Created in 1967 but dormant for some time, the fund works to ease overcrowding in schools by leasing unused air rights over low-slung buildings, in exchange for new classrooms.

In the past 40 years, the fund has added 18,000 school seats, said Jamie Smarr, its director, adding that the two new projects alone will create 2,700. “We’re getting $300 million of new construction out of this,” he said, “and none of it is going on the city’s books.”

The Azure, which broke ground in September, will be a “co-op with condo rules,” which means subletters won’t require board approval, said John Caiazzo, a vice president of the DeMatteis Organizations, based in Elmont on Long Island. It is a developer of the 32-story tower, along with the Mattone Group of College Point, Queens.

The Azure’s L-shaped lot had been home to Public School 151, which closed in 2000. The new structure, with 80,000 square feet across five floors, will serve Middle School 114, whose 350 students are now shoehorned into a nearby elementary school. It is set to open in September 2009, Mr. Caiazzo said.

The Azure’s 127 units will range from 600-square-foot studios to 1,970-square-foot three bedrooms, he added. Priced from $713,000 to $3.7 million, the units went on sale in October, though “only a few contracts have gone out.”

Mr. Caiazzo played down concerns about noise; the school’s 40-foot-wide recreation area will be away from apartments, he said.

In fact, proximity might be a plus. “We’ve gotten quite a few inquiries about people moving here, so their kids could attend that school,” he said.

The high-rise at 250 East 57th Street, as designed by Skidmore, Owings & Merrill, is an angular 59-story glass tower over a retail base. Its offering plan still requires state approval.

But David Lowenfeld, a principal with World-Wide Group, its Manhattan-based developer, envisions a total of 320 units, from studios to three-bedrooms. Sixty percent will be condos, priced at $1,500 a square foot, he said.

The 1.5-acre site now houses P.S. 59 and the High School of Art and Design, which faces Second Avenue. For the 2011 school year, the schools will have roomier new quarters. The elementary will triple in size, and the high school will grow 40 percent, Mr. Smarr said.

First, though, World-Wide Group must build P.S. 59 a temporary facility; It is currently under construction on East 63rd Street.

But what about noise from P.S. 59’s future rooftop playground? “This is the middle of New York,” Mr. Lowenfeld said. “People are used to noise.”

City OKed condo construction at collapse site to get free school built
BY CARRIE MELAGO, DAILY NEWS STAFF WRITER
Updated Friday, May 30th 2008, 9:30 PM
Proposed Azure building


The city green-lighted the construction of the condo tower at the site of Friday's crane collapse as part of a deal to get a new middle school built for free.

The L-shaped lot at the corner of E. 91st St. and First Ave. had been the home of Public School 151 until 2000.

Last year, the city leased the rights of the land to the DeMatteis Organizations and the Mattone Group for $111.9 million.

Under the agreement, the developers were allowed to build a 32-story residential tower in exchange for building the $45million East Side Middle School.

The school is housed in nearby PS 158. If the new building is completed, the school will be able to grow from 350 to 540 seats. It was expected to open next year.

Twelve city schools have been constructed with private financing under similar deals that swap unused air rights over lower buildings in exchange for the construction of new schools.

The process was created about 40 years ago, but this was the first time since 1980 that it has been used.

The deal was negotiated by the city Educational Construction Fund, a division of the Department of Education. It was announced last September.

SCHOOLS 'DEVELOP' $TRATEGY
By ANGELA MONTEFINISE, NY POST

October 15, 2006 -- Reading, writing, 'rithmetic - and real estate.

The city is looking to capitalize on a booming real estate market by leasing the air rights over schools in exchange for new buildings or the cash to construct them.

"We are actively looking at air rights all over the city," said Jamie Smarr, executive director of the Department of Education's Educational Construction Fund, which handles the leases.

The city has been leasing school air rights since the 1970s, but it wants to do more of it, at a higher price, in a hotter market.

Last week, the DOE announced its latest project under the plan - the reconstruction of PS 59 and the HS of Art and Design on Second Avenue and East 57th Street.

Developers World-Wide Group signed a 75-year lease and will pay a total of $320 million in that period. As part of the deal, they will also replace the schools with new, larger buildings and develop a 59-story tower with retail and 320 residential units.

There have already been 12 projects using the leasing of air rights, 11 in the 1970s. They created 4,500 apartments and 1 million square feet of office space, Smarr said. The projects have leases of 75 or 99 years and pump $20 million into the fund every year.

Steve Spinola, president of the Real Estate Board of New York, called the program "a natural," saying most schools are not built to the maximum size allowed, leaving leftover development space, or air rights.

Under the program, the city issues bonds to developers to rebuild and expand existing school sites alongside residential, commercial or office space.

The developers pay annual rent and fees to the city at a negotiated rate based on the market. The funds help pay back the bonds and, once the debt is paid off, go toward the DOE's capital budget.

angela.montefinise@nypost.com

Real Estate Maven Appraises New York Skyscrapers