GlobeSt.com EXCLUSIVE: Lehman Seeks Zoning Amendment to Expand Entertainment District

NEW YORK CITY-Financial services giant Lehman Brothers will ask the City Planning Commission today to permanently amend the zoning regulations in its new neighborhood. If it gets its way, the Theater Subdistrict’s western border will effectively expand from Eighth Avenue clear over to 10th Avenue and all the way down to Herald Square. The immediate beneficiary of such a change would be the Alvin Ailey American Dance Theater, which stands to gain $5 million of Lehman cash for its new building at 55th Street and 9th Avenue in exchange for assuming Lehman’s entertainment-related-use obligation.

When Lehman bought the 38-story office tower at 49th Street and 7th Avenue from Morgan Stanley, it also took on the zoning responsibility of designating a portion of its space–roughly 38,000 sf–to entertainment-related enterprises. But while new buildings within the Theater Subdistrict core that are larger than 60,000 sf must devote roughly 5% of their available floor area to entertainment uses, owners need maintain only 25% of that space onsite; the remaining 75% can be located anywhere within the Theater Subdistrict.

Lehman, however, says Morgan Stanley looked high and low for offsite space within the designated area and came up empty handed. Its answer, which Lehman wants to adopt, was to expand the receiving area–the space within the Theater Subdistrict core where it is allowed to offload entertainment space. Currently, building owners who want to take their properties’ entertainment space offsite are bound by a rectangular area that runs from 40th Street north to 57th Street and from Avenue of the Americas west to Eighth Avenue. Lehman wants to expand the district south to 34th Street and West to 10th Avenue.