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St. Luke's School Plans Expansion in Deal With Local Church

 St. Luke's School signed a 49-year lease with landlord St. Luke in the Fields Church to keep its building.
St. Luke's School signed a 49-year lease with landlord St. Luke in the Fields Church to keep its building.
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Facebook/St. Luke's School

WEST VILLAGE — A long-running effort to secure the financial future of the Church of St. Luke in the Fields has ended with an agreement between the church and St. Luke's School, its tenant.

The parochial school signed a 49-year lease to stay in its home at 487 Hudson St., according to Stephen Powers, the broker who represented the church in lease discussions.

The deal was first reported by Crain's New York.

Powers said the school will grow by roughly 50 percent, adding 20,000 square feet of space across two additional floors on top of its current 40,000-square-foot building.

The expansion is expected to cost $25 million, Powers said, and will give the school a black box theater, a new gym and new classrooms.

Powers' firm, Denham Wolf, has been working with the church for about five years to help figure out how to use real estate holdings to get their mounting expenses under control and also ensure the church's future.

The firm has done similar deals for churches on the Upper West Side and in Carroll Gardens, but this was the biggest project by far because St Luke in the Fields owns an entire city block bordered by Hudson Street to the east, Greenwich Street to the west, Christopher Street to the north and Barrow Street to the south.

"They wanted to make sure they could be good stewards of the block and also ensure future opportunities for future generations," Powers said.

Preserving the church's beloved gardens and many outreach programs were paramount concerns, he added.

"They didn't want to do anything to jeopardize that, but they also had a bunch of expenses," he said.

Denham Wolf brought in architects "to see what was possible on the block and figure out the least they can do to solve their financial goals." They also issued a request for proposals from "developers that were sophisticated and could handle the process" of building in an historic district.

The developer, Toll Brothers, secured approvals from the Landmarks Preservation Commission and state Supreme Court, which is required for lease agreements in excess of 30 years that involve nonprofits, Powers said. 

The parties ultimately secured a 99-year lease of the parking lot on Barrow Street, along with four dilapidated townhouses next door that are being renovated. 

On the site, Toll Brothers will build a residential co-op building, which Crain's reported will be 75,000 square feet and will include 20 percent affordable housing. The townhouses will be market-rate rental units, according to Crain's.

"Annually, they're getting rent [in a] rental stream that goes up based upon the market," Powers said. "Ninety-nine years from now, there will be a new negotiation with the people that own those co-ops."

Powers likened the situation to a deal that occurred between Columbia University and Rockefeller Center back in 1985.

The school's lease was the last piece of the puzzle. Powers said all the kinks were worked out about two weeks ago, resulting in a lease that allows the school to grow and also stipulates that the church can continue to use the school's space after school hours and on weekends "so they can continue doing all their outreach and community work," Powers said.

The church is particularly well-known for its outreach to homeless LGBT youth that frequent the area around Christopher Street and Pier 40 in Hudson River Park.

Powers said the church's long-term plan is to build a community center on the corner of Hudson and Christopher, but that plan is "still in the early stages."