120 Wall Gets Profitable; Tenants Exiting

The Association Center, the office building at 120 Wall Street once dedicated to nonprofit organizations, is getting more profit-oriented.

Two of the roughly 40 nonprofit tenants have announced that they are leaving in part because the building’s tax breaks, and the one-time cheap rents of the Financial District, are disappearing.

The 78-year-old, 600,000-square-foot office building, owned by Larry Silverstein, was designated the Association Center 14 years ago when the Dinkins administration was trying to revive Wall Street real estate. The city agreed to forgive nonprofit tenants real estate taxes, worth about $4 a square foot, but those original leases, and the tax breaks, are now expiring. The Guttmacher Institute, a reproductive research think tank, bought an office condo at 125 Maiden Lane this month, while the National Federation of Community Development Credit Unions moved to John Street in February. Together they rented about 23,000 square feet.

“We found that the prices for leasing were much more than we could bear,” said Robert D. Rosendale, the vice president for administration and finance at the Guttmacher Institute. “We were paying right around $23 [a square foot], and that was going to go to $35.”

He added that the institute needed more space because of a growing staff and that staying in 120 Wall would have required renting on non-contiguous floors.

Both Mr. Rosendale and the credit union association said that there were rumors that the building would eventually be converted to residential condominiums. Dara McQuillan, a spokesman for Silverstein Properties, said, “There are no present plans to operate 120 Wall as anything other than an office building.”

He added that the company had been renewing leases for as far ahead as 2017 or 2018, and the building’s 100 percent leased.

“The project was developed to stop the exodus of associations from New York and it did that,” said Joel Dolci, the president of the New York Society of Association Executives, which helped secure the tax breaks. “We are hoping that that does not recur. We are trying to make every effort to assist the organizations with other space.”

The city Economic Development Corporation, which last year established a separate desk to serve nonprofits, is talking with other priced-out tenants and encouraging them to consider places like Long Island City and downtown Brooklyn–which also happen to be areas where great hopes for satellite office districts have so far floundered.

“The Bloomberg administration is committed to helping New York City’s not-for-profits locate and expand in all five boroughs,” said EDC spokeswoman Yonit Golub.

- Matthew Schuerman