Related’s role in Southtown development, from original leases to Building 9
Southtown is the largest residential development cluster on Roosevelt Island. Built in phases over more than a decade, it reshaped the southern half of the Island and altered the long-term fiscal relationship between the Roosevelt Island Operating Corporation (RIOC) and private developers.
At the center of that transformation is Related Companies, the primary developer behind the Southtown buildings.
This article provides a factual overview of how Related’s agreements with RIOC evolved over time, including the structure of the original ground leases, the subsequent amendments, and the final configuration of Southtown Building 9.
Who Is Related and How Did Southtown Begin?
Related Companies entered Roosevelt Island as the master developer of the Southtown parcel, a large tract of state-controlled land intended for phased residential development.
Under the Island’s unique governance model, RIOC retains ownership of the land. Developers do not purchase parcels outright. Instead, they enter into long-term ground leases, paying land rent and tax-equivalency payments in place of standard New York City property taxes.
The early Southtown buildings were developed under agreements that included affordability components and defined financial obligations to RIOC. Over time, however, those agreements were revisited.
Understanding the Southtown Ground Lease Structure
To understand the Southtown development, it is important to understand how Roosevelt Island land works.
Developers such as Related operate under:
- Long-term ground leases
- Annual land rent obligations
- Tax equivalency payment (TEP) structures
- Regulatory agreements governing affordability
Unlike fully private developments elsewhere in New York City, the land beneath Southtown remains publicly controlled. That structure gives RIOC leverage, but only if exercised during negotiations and amendments.
In the case of Southtown, several lease provisions were modified over time.
The Five Amendments to the Southtown Agreements
Between the original Southtown lease and the completion of Building 9, the agreements governing the development were amended five separate times.
Each amendment adjusted financial or structural components of the deal, including:
- Reallocation of affordability obligations
- Modifications to rent and tax-equivalency structures
- Changes affecting the sequencing and configuration of buildings
The cumulative effect of those amendments is documented in detail in our investigative review, The Five Amendments That Sold Out Roosevelt Island, which analyzes how long-term value shifted across the life of the agreements.
This article focuses instead on the factual timeline.
Southtown Building 9 and the Final Lease Structure
Southtown Building 9 represents the final major residential tower in the development sequence. It differs in structure from earlier phases in several important ways.
Building 9 operates as a fully open-market rental building. Rather than making annual tax-equivalency payments over a 35-year period, the developer made a one-time lump-sum payment in lieu of future TEP obligations.
The building also includes office space leased by RIOC itself.
The structure of that lease, along with the financial implications of the one-time payment model, are examined in greater depth in our analysis of the Southtown amendments.
Why Southtown Still Matters
Southtown continues to shape Roosevelt Island’s fiscal landscape. Ground lease terms, tax-equivalency structures, and affordability allocations influence RIOC’s long-term revenue base and the Island’s development trajectory.
As discussions continue regarding future development opportunities on Roosevelt Island, including potential additional buildings within the Southtown footprint, understanding the history of Related’s agreements with RIOC is essential.
Development decisions rarely hinge on a single vote or a single amendment. They evolve over time, often through technical modifications that reshape financial outcomes incrementally.
The record of Southtown provides a case study in how that process unfolds.
The Gag Order
We move back into the August 27, 2025 Governance Committee meeting at 680 Main Street where it felt less like a continuation than the quiet third act of a long play. In Part 1 (“A Pause Between Sips”), the conversation had drifted from ethics to ground leases, from principle to property, as if governance were something to be held but never quite grasped.
