Speculation Buzzes on Possible Sale Of Municipal Building in Manhattan

Speculation is heating up that the Municipal Building, the soaring limestone landmark that overlooks City Hall, could be among the government real estate assets to be sold off and converted to residential buildings as municipal employees prepare to move into a new, privately managed office building planned for ground zero.

The Municipal Building at One Centre St., the home of the Department of City Planning at 22 Reade St., and another large office building overlooking Foley Square at 2 Lafayette St. are among the assets whose sale is under consideration, according to a source familiar with the process.

In September, Mayor Bloomberg penned an agreement with developer Larry Silverstein to take 600,000 square feet in Tower 4 at the former World Trade Center site as early as 2013. Mr. Bloomberg said at the time that the city could sell off some real estate assets, which could be developed or converted into residential buildings. Mr. Silverstein has the right to cancel the deal between now and September 2008 if he finds a tenant that would pay more than the city's offer of $56.50 a square foot a year in rent.

The iconic Municipal Building, which straddles Chambers Street at its eastern end, was designed by the architectural firm McKim Mead and White and completed in 1914. At 39 stories and containing more than 1 million square feet of office space, the building houses many city agencies, including the Comptroller, the Landmarks Preservation Commission, the Department of Finance, and the New York City Marriage Bureau.

It is crowned with a cupola and a gilded statue by Adolph Weinman of Civic Fame. A giant Corinthian colonnade, modeled after Bernini's colonnade at St. Peter's in Rome, runs along its base. There is a subway station underneath, and it sits at the Manhattan base of the Brooklyn Bridge.

The City Council member representing Lower Manhattan, Alan Gerson, said that talk of selling the Municipal Building has surfaced from time to time in recent years.

"There have been rumors to that effect, but I haven't heard anything officially," Mr. Gerson said. "Tower 4 could be an alternative to the Municipal Building, without question."

Mr. Gerson said that the city should look at more than economics as it makes its decisions.

"There is something to be said about the government holding on to a great iconic civic building in addition to City Hall," Mr. Gerson said.

A spokeswoman for the city's Department of Citywide Administrative Services, the agency that oversees real estate decisions, Jennifer Blum, said in a statement, "Although the City is examining a number of real estate options relating to the agreement to lease space in World Trade Center Tower 4, there are currently no plans to sell any of the 18 buildings managed by the Department of Citywide Administrative Services (DCAS) in Lower Manhattan."

One city official familiar with the considerations said the sale of the Municipal Building is not currently part of any scenario for future space planning.

The president of the Municipal Art Society, Kent Barwick, said it was a bad idea to "sell off something that is such a core part of the city center."

"It is masterpiece of architecture, built as close to City Hall as you can get," Mr. Barwick said.

Previously a dark, deserted area after work and on weekends, Manhattan's civic center has become a more desirable residential neighborhood in recent years. In 2002, the former Arthur Levitt State Office Building at the corner of Chambers Street and Broadway was converted to condos, some selling for more than $7 million, and rental apartments.

An appraiser, Jonathan Miller, said it would be expensive to convert the Municipal Building to condos, but apartments would likely command top dollar.

"At the end of the day, it would make sense. It's a trophy property, it has a lot of history, and it has expansive views on three of the four sides," Mr. Miller said. "There would be a challenge; it requires extensive rehab and it is a large property and you would be bringing a lot of units to market at the same time."

The city bought 2 Lafayette Street in 1981. At 21 stories tall and containing more than 350,000 square feet, it is now home to the offices of the city's Department for the Aging. The City Planning building at 22 Reade Street, built in 1915, is seven stories tall, with more than 53,000 square feet of space.