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370 Jay Street - SOLD

Posted by Gold_12TH on Mon Apr 23 13:07:53 2012

NYU's Bklyn campus deal breaks 10-year gridlock
The Metropolitan Transportation Authority forges a $50 million deal with New York University, to clear the way for conversion of a largely vacant downtown Brooklyn office building into a new tech and science center.

After months of negotiations, New York University has struck a deal with the city and the Metropolitan Transportation Authority to turn an underused, run-down office building in downtown Brooklyn into an applied sciences research institute.

NYU will pay the MTA $50 million to gain control of 370 Jay St., a 459,000-square-foot office building which the school will convert to its Center for Urban Science and Progress. The MTA has a long-term lease on the city-owned building and houses communications equipment there. NYU's payment will cover the costs of moving equipment and staff to the basement of the building.

NYU will pay an additional $10 million to move the New York Police Department, which occupies a portion of 370 Jay St., out of the building. In return, the city agreed to provide up to $15 million in benefits to NYU, including public funds and tax and energy abatements to help offset some of the project costs.

“Over the next five years, 370 Jay St. will be transformed into a cutting-edge center for research and science that will give another huge boost to our city's economy,” Mayor Michael Bloomberg said in a statement. Brooklyn business leaders and Borough President Marty Markowitz have pushed the MTA for years to find a use for the building that would benefit the downtown area, which is the city's third largest business district.

The deal with NYU represents a largely expected bonus to the mayor's ballyhooed tech-campus competition. After the city chose Cornell late last year as the big winner in December, forking over $100 million in cash and prime land for the Ithaca-based university to build an applied sciences graduate school on Roosevelt Island, officials quickly turned their focus to NYU. Its proposal for a campus in downtown Brooklyn fit nicely with visions by the city and borough boosters to create a thriving tech hub in the area.

Money was the sticking point. The MTA controls the site via a master lease and has the right to stay in the building for $1 a year as long as it is using it. The negotiations hinged on how much it would cost to move or replace it. NYU was said to have initially offered about $20 million, but the MTA asked for more.

“Everyone at the MTA is proud that the building will be repurposed as…a new business and science incubator in downtown Brooklyn,” said MTA Chairman Joseph Lhota.

Under the deal, NYU will have six months to conduct due diligence to confirm the costs associated with renovating the property, which has been underused for about a decade. If all goes well, the MTA and NYPD will begin moving in the fall, and NYU will complete renovations by 2017.

In the meantime, the university will lease up to 60,000 square feet of space elsewhere in downtown Brooklyn and in September 2013 will accept its first class at the new center, which it calls CUSP for short. The school is a partnership between NYU and NYU-Poly and some of the world's leading academic institutions and private companies. It will focus on research and development of technology to address challenges facing cities, including infrastructure, tech integration, energy efficiency, traffic and public health.

“New York itself has always been part of the educational experience at NYU,” said NYU President John Sexton in a statement. “With CUSP, New York will also be a living laboratory, a source of research, a test-bed of new ideas, and the economic beneficiary of our researchers' discoveries.”

The university is teaming up with the City University of New York, Carnegie Mellon University, the University of Toronto, the University of Warwick and Indian Institute of Technology Bombay. Industry partners include IBM, Cisco, Consolidated Edison, Siemens and Xerox.

NYU named Steven Koonin—a theoretical physicist who was undersecretary of energy and science at the U.S. Dept. of Energy, a chief scientist at British oil giant BP and long-time provost at the California Institute of Technology—as CUSP's inaugural director.

With the NYU deal inked, the city can now turn its attention to other tech-campus proposals. A spokesman for the city's Economic Development Corp. said additional winners could still be chosen. Proposals by Columbia University and a team of Carnegie Mellon University and Steiner Studios are still in play.

--- http://www.crainsnewyork.com/article/20120423/EDUCATION/120429971#ixzz1sst1COzH

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