University owned building on 60th Street sells for $24 million

by ZACH VEILLEUX

A four-story warehouse purchased by the university in 2003, which at one point was slated to be converted to faculty and postdoc housing, has been sold to a Long Island-based real estate developer. The sale was approved by the university’s Board in the spring and closed May 18.

The 400,000 square foot building, located at 409 East 60th Street between First and York Avenues, was acquired in July 2003 for $13.75 million. At the time, the university was projecting it would grow significantly over the coming decade and would need to find new housing to accommodate an influx of faculty members and postdocs. The 60th Street property was an unusual opportunity to acquire buildable property within a five minute walk of the campus. Preliminary plans were drawn up to replace the existing warehouse, an ice storage facility built in the 1930s, with a 15- to 20-story residential building able to accommodate around 130 residents.

But shortly after Paul Nurse became president in the fall of 2003 the plans were put on hold pending the creation of a new strategic plan for the university — the results of which suggested that additional housing would not be needed as urgently. The university retained the building, however, and over the past eight years it has been used to store furniture and equipment and, more recently, building supplies related to the construction of the CRC and Welch Hall.

The new owner, Steel Equities, based in Bethpage, New York, paid $24 million, and agreed to lease back two floors of the space to the university for a period of two years. “It has been useful to have this space available during the construction work on campus, and this arrangement will allow us to continue using it for storage until the current projects are complete,” says Jim Lapple, the university’s vice president for finance.

Although university administrators are still evaluating options, the proceeds from the sale may be used at least partly to pay off debt and/or stabilize the operating budget, which is projected to run a moderate deficit over the next few years.

“The property turned out to be an excellent investment for the university, and its sale comes at a time when the revenue can be useful in a number of ways,” says Mr. Lapple. “The feeling among the administration and the trustees is that if we need additional housing in the future there are several options both on and off campus that we can explore.”