Some big news from Katz’s Deli this morning. Co-owner Jake Dell just sent along word that the legendary restaurant at the corner of East Houston and Ludlow streets has “a deal in place for the sale of (its) air rights.” Here’s a bit more detail from Dell:
The most important thing is that the future of Katz’s is secure — at the end of the day, no developer can ever come in and knock us down to put in a high rise. At no point will anyone value the corner of Houston and Ludlow for anything other than Katz’s Delicatessen. A year after our 125th anniversary, this will help ensure that we can see our 150th, and hopefully many more to come.
More to come as soon as we learn more information. Dell said details of the deal cannot be disclosed, at least not right now.
UPDATE 11:19 a.m. A few (very few) details based on a phone conversation with Jake Dell. We asked what kind of deal had been made with the mystery buyer — Is it possible that the current single-story structure will be demolished and replaced with a new tower (with Katz’s on the ground floor)? — Or have the air rights been purchased so that they can be transferred to an adjacent lot?
Dell said he could not answer the question directly, but added that, no matter what happens, Katz’s would operate continuously and would “not be closed for a single day.” In the past couple of weeks, rumors have been circulating about a possible sale of the Lower East Side institution.
Dell said he decided to go public now to ease concerns that the restaurant’s future could be in doubt. Once the sale hits public records, the Dell family will presumably be able to discuss the future in more detail. Dell said all of the profits from the sale would be plowed back into the business.
Katz’s, as a business, and their air rights, are unrelated.
If the owners of Katz’s could sell the air rights, that means they own the property. (Right?) So when they say “at the end of the day, no developer can ever come in and knock us down to put in a high rise,” that was never a real possibility (as long as they didn’t sell).
Why are they selling the air rights now? My guess is they need the cash, which perhaps means the business isn’t doing so well.
Regarding the air rights, it’s possible they were sold to Magnum, or someone who may one day sell them to Magnum, in which case, Magnum could build directly over Katz’s.
All of which is to say, I don’t think Katz’s future is made secure by this sale.
Some day the current owners will no longer own Katz. Either they will sell it or they will die and the restaurant will pass to their heirs. If Katz has no air rights when this happens, then the future owners will be unable to raze the building and replace it with a high rise. By selling the air rights they make the future of Katz more secure.