BPCA Negotiates to Boost Affordability at North End Residential Tower
The Battery Park City Authority (BPCA) has renegotiated its ground lease with rental landlord Glenwood Management (owner of the residential building at 450 North End Avenue) to preserve and expand affordability at Tribeca Bridge Tower, as the building is also known.
BPCA president Raju Mann said, “we’re proud to deliver this agreement to not only substantially deepen and expand the building’s affordability, but to also increase payment to Battery Park City’s Joint Purpose Fund, which helps create and maintain affordable units in underserved neighborhoods across the five boroughs.”
The agreement hinges upon the unusual nature of property ownership in Battery Park City, where landlords and developers do not own outright the land they occupy, but instead lease the space (currently through June 2069) from the BPCA, in exchange for yearly payments of ground rent. The terms of this ground rent are contained in a ground lease, which governs all aspects of the BPCA’s relationship with occupants of land in the community.
That document has been amended to require an additional 19 affordable apartments in Tribeca Bridge Tower, for a total of 31 units (up from the current tally of 12). The dozen existing rent-protected apartments are remnants of the building’s participation in the now-expired 421-a subsidy program, which provided tax abatements and lending on favorable terms to developments that set aside 20 percent of their dwellings for below-market-rate rents. (Tribeca Bridge Tower, which opened in 1998, has 151 apartments.)
These 31 affordable units will be set aside in tranches based on the income of the tenants, as gauged by a measure known as “area median income” (AMI), a federally determined metric used by housing advocates and policymakers to compare the costs of living in various parts of the nation. The BPCA’s agreement with Glenwood stipulates that ten apartments in Tribeca Bridge Tower will be reserved for families making 60 percent of AMI, with another nine units set aside for those earning 80 percent of AMI, and 12 units for households with an income of 120 percent of AMI. (For New York City, 60 percent of AMI is currently pegged to a range between $68,040 and $105,000 (for households between one and five people), while 120 percent is AMI is between $136,000 and $210,000 (also for families of one to five people). Rent increases for these apartments will be governed – and limited – by those allowed for rent-stabilized units throughout New York City.
Other clauses in the revised ground lease for Tribeca Bridge Tower prohibit Glenwood from converting the building to either a cooperative or a condominium residence, and require the landlord to invest in sustainability and resiliency upgrades.
In exchange for these pledges, Glenwood has avoided what might have been a financial catastrophe. The minimum base rent it owed to the BPCA in 2025 (for the fiscal year ending on May 31) was $1.011 million, according to its original ground lease. That amount had not increased since 2021, but this was due to be the final year of predictable costs for the building owner. Prior to being revised, the ground lease called for Tribeca Bridge Tower’s ground rent to “reset” as of June 1 to six percent of the fair market value of the land that the building occupies.
Estimating the current value of this land requires using a metric that real estate professionals call “buildable square feet,” which refers to the maximum bulk that current zoning laws would allow for a given site, multiplied by a dollar figure for recent, comparable sales. According to the real estate consulting firm Avison and Young, the most recent average price for land in Manhattan is $464 per buildable square foot. (For a fashionable area such as Lower Manhattan, this figure might, in fact, be significantly higher.) According to multiple BPCA bond prospectuses, Tribeca Bridge Tower contains 244,617 square feet of interior space. This appears to mean that the fair market value of the land occupied by the building is approximately $113 million. Six percent of that amount is $6.8 million. Thus, under the terms of the original ground lease, Glenwood might have seen its ground rent increase more than sixfold.
Another, more conservative way of calculating possible increase in costs that Glenwood has avoided is to rely on the Battery Park City Authority’s repeated estimate that a reasonable market rate for annual residential ground rent in the community is $10 per square foot. In this scenario, Glenwood’s ground rent could have jumped to $2.4 million, an increase of 141 percent.
Instead, under the terms of the new lease, Glenwood will pay $1.37 million for the fiscal year that began on June 1, with that amount escalating each subsequent year (through 2069) by the greater of either 3.0 percent or the rate of inflation, as defined by the Consumer Price Index (with the latter capped at 5.0 percent).
The revised lease terms between Glenwood and the BPCA require the building owner to pay either the minimum base rent described above, or 11 percent of “effective gross income” (essentially, revenue derived from rents, plus ancillary sources), whichever is greater.
The BPCA is also collecting a $4 million “restructuring fee” as part of this agreement, along with provisions that guarantee that the Authority will receive three percent of any proceeds in the event that Glenwood decides to refinance debt on Tribeca Bridge Tower, and two percent of the price if the developer ever decides to sell the building.
As new affordable units become available in Tribeca Bridge Tower, the BPCA says that the New York State Housing Finance Agency will handle applications for these apartments.