The Sky's the Limit

Urban Churches Are Selling Properties and Air Rights to Developers

Holy Cross Roman Catholic Church in New York City sold its air rights and a vacant parking lot to a development company, and the company erected the 50-story residential building that now looms over the church. (By Michael Falco -- Religion News Service)

A crunch on open space in many cities has developers courting churches with multimillion-dollar offers to buy their property and sometimes even the air above their heads.

Finding the sky is the limit, many congregations are cashing in.

"In an urban area, air rights are just as much an asset as a piece of property," said the Rev. John M. Buchanan, pastor of Fourth Presbyterian in Chicago, which is working on a deal that could bring in $25 million.

From New York to Seattle, downtown congregations are striking deals worth tens of millions of dollars. Those willing to sell are often Protestant churches saddled with aging buildings, growing deficits and shrinking memberships.

Although the real estate market has cooled in recent months, industry veterans say the church trend remains strong, especially in revitalized cities where the supply of condominiums and office space has not caught up with demand.

In New York, where the only place to go is up, developers are willing to pay top dollar for not just land, but also the air above a church's roof.

On Manhattan's Park Avenue, the byzantine-style Christ Church United Methodist is dwarfed by high-rise apartment buildings on the corner of East 60th Street. The 70,000 square feet of "air rights" above the church is considered developable space that can be sold to the highest bidder, even though the church has no plans to build up.

Christ Church negotiated a selling price of $430 a square foot -- twice the going rate in New York's cutthroat real estate market -- for the unused vertical space. The November deal generated $30 million for the church.

The church's pastor, the Rev. Stephen Bauman, said the sale of an unused "vertical asset" will fund ministry programs, including a public school in the South Bronx that has been adopted by the church.

In Chicago, Fourth Presbyterian Church hopes to overcome neighborhood opposition to a proposed 60-story condominium tower that would bring the church $25 million for selling its air rights along Michigan Avenue. The money would allow the church to expand its tutoring programs and care for the elderly and to do more outreach in the city's housing projects.

Nearby, St. James Episcopal Cathedral has signed a 120-year lease worth more than $10 million to erect a 64-story tower that includes a 65,000-square-foot Canyon Ranch wellness center and restaurant.

In Seattle, an office tower will replace First United Methodist Church in a deal that preservationists estimate at $30 million. The money will be used to build a new church facility and fund a homeless shelter and feeding programs.