New York, New York (June 24, 2010) – New York City has opened a five-story, 80,000 square-foot middle school on E. 91st Street, the first new school built on the Upper East Side since the early 1960’s.

The $45 million new facility was built at zero cost to taxpayers, financed instead through a 75-year lease of the air rights above the building by the New York City Educational Construction Fund (the "Fund") to private developers.  The developers used the air rights to build a residential and retail building in addition to the school.Anderson Kill & Olick, P.C. represented the Fund in the transaction, negotiating the lease, development and construction agreements encompassing all facets of the project, including the financial terms, design and construction, insurance and indemnity. "This would be a great building if we had to pay for it, but for free, it’s off the charts," said Schools Chancellor Joel I. Klein at the June 17 ribbon-cutting, as reported in The New York Times.Jim Cullen, head of Anderson Kill & Olick’s real estate and construction practice, said, "It’s tremendously satisfying to witness the delight of schoolchildren and school officials alike as this innovative use of previously unused resources comes to fruition. These air rights developments perfected by the Educational Construction Fund since the 1970’s provide to the City new school facilities financed by residential and retail development that’s also beneficial to the City.  It is a win-win situation in the purest sense."Middle School 114 is the first new school building completed since the Fund was revived by the Bloomberg administration after a long dormancy. Established in 1967, the Fund created more than 18,000 school seats before falling into disuse by 1980.  The Bloomberg administration has revived the Fund as an integral part of its five-year capital program for delivering 63,000 new school seats. Under the Fund’s air rights lease program, ground has also been broken for two schools on East 57th Street, a new high school that will replace the existing High School for Art and Design with a state-of-the-art facility designed by Skidmore Owings & Merrill, and a new elementary school. In total, that air rights lease agreement has a capital value in excess of $4.2 billion.  Anderson Kill also represented the Fund in this transaction.