Continuing our leadership position in providing strategic real estate and land use counsel to some of New York City’s – and the world’s – most recognized brands, Kramer Levin recently partnered with The Walt Disney Co. in its quest both to rationalize its presence in Manhattan and to consolidate its operations into a single location. Always an innovator, Disney sought a long-term solution for the next century, a solution that would allow the multifaceted corporation to meet current and near-term needs while also providing long-term flexibility in one of the world’s fastest-changing cities.
For several decades, Disney and its ABC television network have operated from a cluster of buildings in and around West 66th Street on the Upper West Side of Manhattan. In working to anticipate its space needs and uses for the next generation, Disney explored a variety of alternatives. While it considered a new location, Disney sought a buyer for its Upper West Side campus. A Kramer Levin team composed of real estate, land use and tax lawyers helped prepare for and negotiate the sale to Silverstein Properties for $1.2 billion in July 2018, with a five-year leaseback provision.
For its new headquarters, Disney sought a location among other innovators in the technology and media fields. It settled on Hudson Square, an historic community in lower Manhattan that over the past decade has been transforming into a hub of innovation. (Google recently announced its plans to expand its presence in New York City, with a 1.7 million-square-foot campus in the neighborhood.)
Trinity Church owns vast properties in lower Manhattan, including the targeted Hudson Square location. Trinity proposed a long-term lease rather than a sale, but that was not a desirable option for Disney. Our team developed an innovative solution: an “estate for years” agreement that provides Disney with true ownership of the property for 99 years, after which it reverts to Trinity Church. Once again, our combined team of real estate, land use and tax lawyers helped structure a transaction to acquire the rights to develop 1.2 billion buildable square feet.
This unique real estate transaction contributes to Hudson Square’s — and lower Manhattan’s — burgeoning renaissance. Disney’s relocation to the community will serve as a catalyst for further development and expansion of commercial, residential and retail properties.