On Saturday, Oct. 14, a CUNY law professor named Dinesh Khosla sent a very polite memo to the “law-school community,” titled, “Our New Building.”
The memo wondered why CUNY, a public university financed by taxpayers, is paying a decidedly above-market price ($155 million) for its new, 225,000-square foot home at Citigroup’s 2 Court Square in Long Island City.
The memo isn’t going to win Mr. Khosla (whose bio on CUNY’s Web site describes him as, “A passionate devotee of civil disobedience [who] spent months in Indian jails during the 1960s,”) any favors with the CUNY administration, headed by former DOT Commish Iris Weinshall, wife of Senator Charles Schumer.
Mr. Khosla did his research and his math. The price tag, for six floors of office space, boils down to $689 a square foot. In contrast: in March, 1540 Broadway, a top-notch skyscraper in Times Square, sold for about $392 a square foot. In July, another midtown Manhattan skyscraper, Worldwide Plaza, sold for about $375 a square foot. And in August, AIG sold its gorgeous 70 Pine Street and 72 Wall Street, in the financial district, for about $100 a foot.
“In my humble opinion, the price we are paying is beyond reason,” Mr. Khosla wrote. “We should not be spending public money to cover the mistakes of the likes of Citigroup. We should proceed with the acquisition but only pay what the free market determines to be the fair value.”
In response to a request for comment from CUNY, The Transom got a very long statement that argued, in part, that the $155 million “is far less than it would have cost CUNY to construct a new building for the Law School, which an independent architectural firm estimated would be $250 million.”
That is a question for debate. The New York Building Congress’ most recent numbers put the cost of erecting a prime office building at $290 a square foot. Land acquisitions costs aside, that would bring the construction of 225,000 square feet to about $65 million.
But a knowledgeable broker said replacement costs would likely be much higher, because it’s a law school, and because the city would have to build it.
“I think it’s a great deal for Citibank, obviously,” he said.
Follow Dana Rubinstein via RSS.