The framework establishes height limits for the first time along the corridor. Vornado Realty Trust, Thor Equities LLC, both locally based, and Chicago-based General Growth Properties have all previously mentioned that they are going to bid on the project, but did not respond to queries by deadline. In order to ensure retail diversity, special regulations restrict the amount of the street frontage that may be occupied by banks and by office and residential lobbies. The zoning also requires the inclusion of arts and entertainment uses for developments over a certain size and it establishes an arts bonus--the first in the City--to promote the development of more than 90,000 sf of new non-profit visual arts and performance space. The rezoning is also expected to produce more than one million sf of office space and more than 7,000 jobs.
Hugh Finnegan, an attorney in the real estate group at Sullivan & Worcester LLP, tells GlobeSt.com that there will be a number of existing owners and future owners, in the whole rezoning area, who will benefit.
According to Shimon Shkury, managing partner with Massey Knakal Realty Services, tells GlobeSt.com that it is unusual for a rezoning to proceed without a developer, but not unprecedented "because city and the community would like to know the exact intentions of a developer prior to approving a rezoning." He adds that there are no disadvantages to this process. "Although the rezoning is almost a done deal, the rezoning has to go before City Council and a developer will be chosen before this vote is in. Moreover, Councilwoman Mark-Viverito backs the plan which tells us the community is behind it." He did say that there are many advantages to the process. "The developers who bid on the project can structure and tailor this significant transaction as close as possible to needs of the community and the city," he says. "Also, the developers can effectively project profitability leveland eliminate the uncertainty of the rezoning process, the the City and community ensure that the developers bidding on the project are highly informed regarding the zoning and community needs and there is little to no ambiguity there." He adds that "the actual development process can be expedited once the bidder has been approved with one less variables to worry about."
Shkury agrees with Finnegan that the area will greatly benefit from the mixed-use development, which should include retail, office, free market and affordable housing. The area will benefit "mostly because of its size and ability to have a 'spillover effect' to adjacent blocks," he says. "With respect to transportation such as the proposed Second Avenue Subway and the Harlem River Drive, this location is strategic."
Shkury explains to GlobeSt.com that the corridor's success will primarily depend on the city's ability to select a developer capable of building a project of this size and scale while remaining sensitive to the needs and demands of the community. "Lack of financing, be it from the private sector or government, has led to long delays for many similar projects in the past so it will be essential for the developer to manage costs and for the city to be ready to assist when necessary," he says. He further notes that success also depends on the Second Avenue Subway project being built on time, as well as the type of retail and office tenants who will occupy the space.
Although the City owns the majority of the land that will house the development, some landowners have reportedly complained that they have yet to receive offers for their property. The New York City Economic Development Corp. though is reportedly having ongoing discussions with property owners and note that "they will all be dealt with fairly." The NYCEDC did not return GlobeSt.com queries by deadline.
Shkury says that the process of eminent domain, which could happen, is inevitable at times, "but the hope is that the city will fairly compensate the current owners and maybe offer to part take in the project. Since there have been numerous transactions on 125th Street in recent years, enough comparable sales should exist for the city and landowners to determine a market price for the properties that pleases both parties."
In April, the City Council voted 47-2 to approve an often-controversial rezoning of the corridor. The rezoning of 24 blocks surrounding 125th Street also establishes height limits and restricts the street frontage that may be occupied by banks and by office and residential lobbies.
Council Member Robert Jackson previously said in a prepared statement that "the rezoning will protect the unique character of our Harlem neighborhoods while creating new jobs, supporting small businesses and the arts, and developing thousands of new units of affordable housing."
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
