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Broadway bonanza

Gotham's City Council OKs sale of 'air rights'

NEW YORK — Creating a potentially huge windfall of cash for Broadway’s theater owners, the New York City Council voted Thursday to allow the sale of 25 Broadway houses’ “air rights” for use in the Chelsea and Clinton areas, angering community groups who fear rising rents and a change in the character of their neighborhoods.

Air rights represent the difference between a theater building’s actual size and the size allowed under Gotham zoning regulations. As most theaters are not very tall, they’ve got stories to burn — and now, it seems, to sell to developers at $50 a square foot. The concession had long been sought by theater owners.

The resolution will allow the owners to sell rights to developers that will increase the size of buildings by as much as 20% without a permit, and as much as 40% with a special permit and review. While theater owners are thrilled, many in the Chelsea and Clinton communities in the affected areas aren’t.

“We’re entirely displeased,” said a resigned Pamela Harriman, chair of Community Board 4 in Chelsea.

The City Council elected not to demand an environmental impact statement for the proposal, which would have examined the effects of increased construction, pedestrian and auto traffic, noise and pollution in the area between 40th and 57th Streets, between Sixth and Eighth avenues.

“When you have an area where building could be increased by 20% or higher, that seems like a good reason to study it,” Harriman added.

Theater owners weren’t looking a gift horse in the mouth. They stand to make millions on the sale of the air rights.

“They are professionals, and who am I to criticize their decision?” asked Shubert Organization president Phil Smith.

Indeed, the Shubert Organization stands to gain most, with 12 of its houses affected by the ruling and an aggregate 1.1 million square feet now up for potential sale.

Defenders of the bill point to its potential as a booster of Broadway theater.

The Giuliani administration, which proposed the plan in December, sold it as a private sector means of preserving the Broadway theaters and increasing the number of productions per year.

As part of the legislation, the theater owners must contribute $10 per square foot of air rights sold (with the average selling price being $50 a square foot) to the Broadway Initiative, a nonprofit coalition that plans to use the money for audience development programs and for the funding of new plays and small musicals.

And the Broadway houses that sell their air rights must guarantee that they will always remain legitimate theater houses.

Some residents criticized the theater owners for contributions to Giuliani. In fact, the Nederlander Organization contributed more than $44,000 to Giuliani’s campaign in the 1997 election cycle, according to documents obtained by Daily Variety from new York’s Campaign Finance Board. Calls placed to Nederlander officials and execs at Jujamcyn, the city’s third major theater owner, were not returned.

Despite its ultimate victory, the legislation did see some changes en route.

The Manhattan Borough Board voted in April to temporarily derail the proposal and add some safeguards. First, the low-rise areas west of Eight Avenue between 45th and 57th streets would be exempt from air rights transfers. Second, a committee staffed by city government officials and arts representatives called the Theater Subdistrict Council will monitor the disbursement of these funds and make sure that theaters involved in rights transfers are inspected and maintained.

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