Air Rights

When the ceiling of St. Teresa's Church came crashing down four years ago, the spirit of the parish on Manhattan's lower East Side did not fall with it. More than 60,000 pounds of plaster hit the church floor, breaking through to the parish hall beneath, and the future appeared bleak for the historic 150-year-old building, site of the city's oldest public clock.

The parish had few financial resources to rebuild, and all of that money was spent removing the remaining 90,000 pounds of plaster from the ceiling and refurbishing the basement parish hall, where Mass and other services have taken place for the past three years.

The pastor, Father Dennis J. Sullivan, and the parishioners were determined to get their beautiful Gothic-style church back into shape, however, and began exploring ways of raising money. Last year, the opportunity came when a real estate developer expressed interest in a parking lot adjacent to the church, at the corner of East Broadway and Rutgers Street. With help from the archdiocesan Real Estate Office, the parish sold the lot and air rights over the church for $2.1 million.

Construction of an eight-story, 83-unit apartment house for young professionals will begin soon on the site in a neighborhood dominated by old low-rise walk-ups on the border of the lower East Side and Chinatown. The building will be called the Crossroads, to reflect the ethnically diverse area, which some real estate experts see as ripe for residential development.

The money from the sale will finance the rebuilding of St. Teresa's interior and the pointing of the exterior, with some funds left over for the future of the parish.

"We searched out a number of options over the years to get us out of what you could call a financial quagmire," Father Sullivan said. "We looked at the deal very closely, because for very good reasons the Church does not want to sell off property without good cause. This sale will enable the parish to remain at the crossroads of this very vital and vibrant neighborhood and to serve the people here well into the millennium."

A number of other Manhattan parishes have sold land and air rights to developers in recent years as a way to clear debts, renovate or repair church buildings, expand facilities and services and build for the future. Among them are Blessed Sacrament on the upper West Side; St. Catherine of Siena and St. Jean Baptiste on the East Side; Our Lady of the Scapular and St. Stephen's in Kips Bay; St. Malachy's in the theater district; Our Lady of the Rosary in the financial district; Holy Family, across First Avenue from the United Nations, and St. Paul the Apostle, in the Lincoln Center area.

The sales reflect dynamics that have been at work over the past decade or more between development patterns in the city and the population bases of parishes. In many areas of Manhattan which are valuable to builders for business or residential use, a parish may hold one of the few undeveloped land and air rights parcels. Conversely, due in part to this consistent drive for development in the borough, some of these same parishes have experienced a decline in stable families, as large parish populations have been replaced by affluent single people who may have tenuous ties to the faith.

A strong residential real estate market has been fueling the process at a brush-fire rate in the past five years, as more and more people choose to live in or near midtown. According to David Brown, director of the Real Estate Office for the archdiocese, four more Manhattan parishes are set to make land or air rights deals within the year, and three others are ready to enter negotiations.

"You need a strong real estate market for this to happen, and in late 1994 the market began coming back and has been very strong since late 1995," he told CNY. "The parishes can't sell until there is somebody interested in buying, and when somebody expresses interest, we take the opportunity to maximize the assets of the parish."

Air rights are the height that a building may reach according to the zoning laws. If a building is lower than the law allows--as is the case with most churches in Manhattan--that building can in most cases sell the remaining space allowance to a developer of a nearby building. The developer can add this space allowance to build higher than zoning regulations would otherwise allow.

To most parishes, air rights are just so much empty space above church or school buildings--closer to heaven, perhaps, but of little practical use.

"We're not going to build a higher church or build new high-rise buildings," Brown stated. "There's also a chance that a parish can lose its air rights through changes in the zoning laws, so it's really only prudent care for the assets of the parish to sell them off when you have the chance."

Although the financial benefits are potentially lucrative, the archdiocese does not have a systematic policy for selling land or air rights.

"There is no program whereby we're trying to identify land or air rights to sell and then reach out to developers," said Auxiliary Bishop Patrick J. Sheridan, vicar general. "But if the circumstances come along in which a developer is planning to build near one of our parish properties and wants to obtain land or air rights to build higher, then certainly that particular parish would want to be in on the negotiations."

He added, "The financial benefits are obvious, and they will help the local parish extend its services to its own people and, through whatever percentage is given to the archdiocese, will go out to poor parishes in other areas which may not have the opportunity to benefit from such a sale."

When Father Sullivan announced the sale to parishioners last fall, he stressed the responsibility of the present generation at St. Teresa's to provide for the next.

"We look at the parking lot as a gift to the parish from those who have gone before us, who had the foresight to acquire this parcel of land over the years," he told CNY. "We feel a great sense of stewardship and hope to leave to the generations to come the same kind of gift."

For St. Paul the Apostle, creating more space rather than gaining more money was the motive behind the sale of a parking lot and air rights on the corner of 59th Street and Columbus Avenue. The income has helped pay for the construction of a three-story, $5 million parish ministry center to be completed in the summer on a portion of the former parking lot behind a residential high-rise now under construction. The center will have offices for priests and the lay staff and ministers, counseling rooms and meeting rooms for the many parish groups.

The project comes a few years after the completion of a $3 million restoration of the Old Gothic-style church, built in 1885.

The parish, administered by the Paulist Fathers, has been short on space since the 1984 sale of its school building on West 60th Street, where a high-rise apartment building now stands.

Father Francis P. DeSiano, president of the Paulist community and pastor of the parish when the school was sold, told CNY, "I had wanted to put up a ministry building even without the sale of property, so this project has been on the drawing board for 15 years. In the long run, it was better to wait until a sale sufficient to cover the costs."

Most of the sales have been in residential areas, but Our Lady of the Rosary parish, which houses a shrine where St. Elizabeth Ann Seton lived, sold air rights to an adjoining corporate skyscraper a few blocks from Wall Street. With few resident parishioners in the Battery Park area, the modest shrine church continues to serve the weekday financial district faithful.

In an area that has a mix of residential and corporate space tied to the presence of the United Nations, Holy Family parish sold air rights for $10 million over its church on East 47th Street to developers of the Trump World Tower, a luxury apartment building scheduled to rise some 90 stories at the corner of First Avenue.

The sale is another instance of the parish, celebrating its 75th anniversary, adapting to changes in the neighborhood. Founded as an Italian national parish, it lost many of its parishioners with the construction of the United Nations and now occupies some of the city's most coveted real estate.

"If you're in the right place at the right time, a parish has the opportunity to make a lot of money," Brown said. "This is more the case than us trying to go out and realize profits. If the market isn't there, we really can't do anything."

Alongside these million-dollar deals is the fact that the Church in New York has stayed in many poor areas where such transactions will never take place. In some cases, however, a neighborhood has rebounded--often with the stabilizing influence of the parish--and become desirable to developers.

This is true of St. Teresa's, Brown pointed out, where the parish parking lot lay empty for many years before a sprawling upscale housing market moved into the area.

Father Sullivan recalls the morning he opened the church to see the tons of plaster that had fallen during the night four years ago. In the days and months that followed, he saw living proof that a church is more than simply the four walls and stained glass. People pulled together for the parish, which celebrates Mass in English, Spanish and Cantonese (with Mandarin translation booklets). Others in the neighborhood helped out. During seven months after the accident, Sunday Mass was celebrated in the theater of the Educational Alliance, a Jewish neighborhood organization.

"It was a wonderful example of neighbor reaching out to neighbor. We even celebrated Christmas Mass there," he said.

The parish also has a good relationship with its new neighbor, the Crossroads. The developer is building a new handicap access ramp for the church and placing protective covers over the stained glass.

"This is working out well for everyone involved," Father Sullivan said.