The East Side Airlines Terminal, the first stop in Manhattan for millions of travelers for more than 30 years, was sold yesterday for $90.6 million to developers who plan to build a luxury apartment house on the site.
The price for the property, which stopped functioning last year as a bus link to Kennedy International and La Guardia Airports, was believed to be the largest ever paid at an auction for a piece of real estate in Manhattan.
Officials of the Metropolitan Transportation Authority, which sold the property, said the money would be used for capital projects to improve its subways, buses and commuter rail lines.
A Joint Venture
The successful bidder was a joint venture whose partners are Bernard Spitzer, a leading developer of luxury apartments; Peter L. Malkin, a real- estate lawyer, and two privately held corporations whose principals were not disclosed.
Mr. Malkin said the terminal, which occupies the block between 37th and 38th Streets from First to Second Avenues, would be torn down as early as next year and an apartment house of about 50 stories would be built. The zoning permits the kind of building the developers envision.
Continue reading the main storyThe 850 apartments will likely be sold as condominiums, Mr. Malkin said, and the lower floors will be leased as commercial space.
21 Rounds of Bidding
The partners outbid seven other developers, each of whom had deposited $1 million simply to bid. The auction was held in the spectral atmosphere of the terminal's vacant main waiting room, where airline booths that once registered the baggage of departing passengers stood empty and where the escalator leading up from the street was frozen.
The bidding, which took three and a half hours, began at $55 million and moved up for 21 rounds until only the Spitzer-Malkin joint venture remained.
The stone-faced, two-story terminal, built in 1953, was largely abandoned last spring, when Carey Transportation Inc. decided to use the Port Authority Bus Terminal at 42d Street and Eighth Avenue as the main depot for passengers coming into Manhattan from La Guardia and Kennedy Airports in its buses or leaving Manhattan for those airports. Carey buses, however, stop at Park Avenue between 41st and 42d Streets to pick up and drop off East Side travelers.
According to Arthur G. Perfall, an M.T.A. spokesman, the terminal began to outlive its usefulness in the late 1960's and early 70's, when most airlines acquired facilities at the airports for ticketing and baggage handling.
Travelers no longer had to visit the East Side terminal to check in for flights, and so only those who wanted to take the less expensive buses to the airports would use the terminal. Carey soon decided to shift its operations to more convenient sites in midtown.
The terminal has since been used to accommodate administrative offices of the city's Transportation Department. The Murray Hill Racquet Club uses the roof for bubble-enclosed tennis courts, and there is a 346-car garage and a coffee shop.
Leases Expire in 1986
Mr. Malkin said all the leases in the property expire April 30, 1986. Demolition could begin soon afterward, although he said it might begin earlier if the leaseholders leave before their leases expire.
Yesterday's sale requires approval by the governing board of the M.T.A. at a meeting scheduled for tomorrow. The terminal is a facility of the Triborough Bridge and Tunnel Authority, but the M.T.A. is the parent agency of that authority.
The closing of the deal is scheduled for April 15, and Mr. Malkin said the developers would pay cash.
Mr. Malkin said the 81,173-square- foot site was an enviable one because by May 1986 there would be no occupants who must be relocated and because its C-1-9 zoning classification would permit the construction of a luxury apartment tower without the need for time-consuming variances. He said the eventual cost of developing the site would total more than $200 million.
Views of East River
The site is on a flourishing strip along First Avenue in which two other major apartment houses - Manhattan Place and Rivergate - have risen in recent years. The site, with views of the East River on three sides, is adjacent to the entrances to the Queens Midtown Tunnel, four blocks south of the United Nations and a seven-minute walk from Grand Central Terminal.
Mr. Malkin said he thought likely buyers for his condominiums would include officials at the United Nations, residents of Long Island who are seeking Manhattan pied- a-terres and the executives of the advertising companies that are sprouting south of 42d Street.
Mr. Spitzer has been an apartment developer for more than 30 years and built and owns apartment buildings at 800 Fifth Avenue, 985 Fifth Avenue, 1050 Fifth Avenue, 1020 Park Avenue, 200 Central Park South, 210 Central Park South and 220 East 72d Street.
Other Partners
Mr. Malkin, a senior partner in the law firm of Wien, Malkin & Bettex, is one of the partners in the recently announced acquisition of B. Altman & Company. The other two partners in the joint venture are the International Energy Corporation and Kriti Exploration Inc. Mr. Malkin described them as domestic, privately held corporations.
Other bidders on the terminal included the Glick Organization, whose Manhattan Place is catty-corner to the terminal at 37th Street; a joint venture of Lawrence Silberstein and Robert Olnick, a joint venture of Jacobo Finkelstain and the Progress Development Company, and Edward Millstein.
The M.T.A. will have another multimillion-dollar auction in a few months when it sells the New York Coliseum.
A much larger Manhattan parcel sold for almost the same amount in December, although that sale involved complicated financial and zoning issues. The 76-acre Lincoln West site - the old Penn Central rail yards running along the Hudson River from 59th to 72d Streets - was bought by the developer Donald J. Trump for $95 million.
The East Side terminal covers about two acres and sold for only $4.4 million less.
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