Push for School in Tower Planned for Site Next to Hospital by Etta Sanders Once the World Trade Center memorial is built, the next highest priority for the site is retail-about 1 million square feet In a pair of surprising developments, Pace University pulled out of a deal to occupy part of a towering residential building planned for the parking lot of NYU Downtown Hospital, and talks have begun about putting a new K-8th grade school there. The discussions took place in a meeting on Nov. 3 between elected officials and representatives of the community, the hospital, and the site's developer, Forest City Ratner, to explore a possible contribution by the developer to a community amenity. Within minutes of the beginning of the meeting, the news came that Pace had just withdrawn from a pending lease agreement with Ratner for 300,000 square feet of the proposed 75-story building, saying the developer had significantly increased the price. Community representatives quickly jumped in to suggest a school. "Immediately after that announcement, they launched into, 'Alright, you don't have Pace, we need a school,'" said Paul Epstein, a resident of 140 Nassau Street, a building that borders the site. According to Epstein and others at the meeting, the developers were open to the idea, but expressed reservations about the delays that could be caused by bringing the historically slow moving Department of Education into the process. Community representatives pointed to the relatively speedy creation of P.S. 234, P.S./I.S. 89 and the Millennium high school as a demonstration of the neighborhood's record for fast tracking schools. "We do have a precedent of circumventing the DOE," said Paul Goldstein, CB1 district manager. After the meeting, Ratner requested the plans for P.S./I.S. 89, which had been cited at the meeting as an example of how a school could successfully be worked into a residential building. Those plans have been given to the project's architect, Gehry and Partners. Another meeting is scheduled for Nov. 23r. "All in all a pretty positive development," said Marc Donenfeld chair of CB1's Seaport and Civic Center Committee. Madelyn Wils, chairwoman of CB1, said there were several incentives that could make the school an attractive option for Ratner. "The good neighbor incentive is that he's putting 1,000 people on that site and if they choose to go to public school they won't have public school," said Madelyn Wils. "The second incentive is that the school can pay for itself." The city has committed $44 million dollars in the School Construction Authority budget toward the creation of a new school. Wils said putting in a school could help the developer qualify for the millions of dollars in tax-free Liberty Bonds they have sought. "There would be no reason for them to get Liberty Bonds if they don't do anything that's good for the public." It is unclear how the changes could affect the eventual size of the project. Pace was expected to move its business school and student dorms into 300,000 square feet of the new facility. A K-8th grade school would likely need only about 100,000 square feet. The hospital will get 25,000 square feet for outpatient facilities in the building. The financially strapped hospital sold the development rights for the lot to Forest City Ratner in December 2003. Finalization of that sale is currently impeded by a lawsuit brought by residents who are contesting the city's determination that the site can be built on without going through a public approval process. Through that process, the height of the building could be limited. The building was originally proposed to be 50 stories high, but after complaints from Nassau Street residents that their light and air would be cut off, the plans were amended to set it back on the lot and create a plaza. In order to do that, Ratner said, they would need to increase the height of the building to 75 stories. That would make it the second tallest Downtown structure after the Freedom Tower, now planned for the World Trade Center site. In recent months, a parking lot at 250 Water Street near the South Street Seaport, owned by Milstein Properties, has been seen as the likely location for a new school. But that site is also encumbered with a lawsuit, this one brought by the owner against the city over zoning issues. The hospital parking lot was long favored by the community board as a location for a public school. The Department of Education (DOE), however, had reservations about school buses competing with fire trucks and ambulances on Beekman and Spruce Streets. "DOE was concerned about the very narrow streets surrounding the NYU/Beekman hospital," a spokeswoman for the department said in March. When Ratner entered into the deal with Pace last spring, the hopes for a school at the site died. Now they have been resuscitated. Said Goldstein, "We've gone a very circuitous route."