NEW YORK CITY-As the industry continues to wait with bated breath for word on whether Midtown East will get rezoned—and how that process will be executed—REBNY president Steven Spinola outlined the latest plan put forth by the city, as well as REBNY's response to those plans, at a luncheon meeting of the Young Men's/Women's Real Estate Association of New York.
Under the city's plan, issued by the Dept. of City Planning, Midtown East will be rezoned to allow for greater as-of-right density and the city has created an “earned as of right framework,” whereby developers who contribute into a district improvement fund or buy for pedestrian and transportation improvements [or buy landmark air rights] can increase their building's FAR. Contributions, under the city's plan, will be at a rate of $250 per-square-foot, and the district's FAR ranges from 18 all the way up to 21.6 around Grand Central.
Sites that are qualify for such allowances must span at least 25,000 square feet with full avenue frontage, and the city has limited the types of buildings that are eligible to commercial properties. The plan is expected to add 4.5 million square feet of additional new office space, according to Spinola, and induce 15 million square feet of new office construction.
REBNY has several objections however, Spinola said. The organization feels $250 is “a little high,” Spinola says, although the association hasn't suggested an alternative price. In addition, “there's nothing magic” about that 25,000 square foot number, so REBNY would like to see that changed, though it's flexible on the number. The Real Estate Board also takes issue with the “commercial properties only” provision, so it has requested that hotels and condominiums—which are often built in tandem—be allowed.
Finally, there are numerous issues surrounding landmarks. There are disputes as to how many there are, which is significant because, under the proposed plan, landmarked properties in the District—such as St. Patrick's Cathedral and the Lever House building, to name a few—may only sell air rights to buildings in very restricted zones, generally those that are very close by. However, this could mean that a building right across the street from a landmark doesn't need to purchase anything before building, creating a disincentive for developers all around the area to purchase air rights.
Currently, 21 properties within the Midtown East rezoning district are landmarked but the city has apparently deemed a total of 32 sites in the area to be worthy of landmark status and, in fact, has set the wheels in motion for 8 of the properties to get that certification. REBNY, for its part, thinks the current state of affairs is right and doesn't feel the additional properties are worthy of landmark status, said Spinola.
“We can not allow the city to landmark away its economic future,” he said.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
