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Category ArchiveGale Brewer

Real Estate Board, Brokers Outraged About Vacancy Tax Talks

As Mayor Bill de Blasio jumps on the “vacancy tax” bandwagon, the Real Estate Board of New York and brokers are crying out in opposition.

Details on a potential vacancy tax—which would levy landlords that let their retail spaces sit vacant for long periods of time—have been scant, but Blasio said he would support one in an interview on the Brian Lehrer Show on WNYC last Friday.

“I am very interested in fighting…for a vacancy fee or a vacancy tax that would penalize landlords who leave their storefronts vacant for long periods of time in neighborhoods because they are looking for some top-dollar rent but they blight neighborhoods by doing it,” de Blasio said.

REBNY said the new tax, which originated with Manhattan Borough President Gale Brewer last year, is hogwash. The organization claimed that that’s not the solution when vacancies are coming as a result of economic issues that tenants face, rather than landlords, such as minimum wage increases, the paid sick leave requirement and the battle against e-commerce.

“The city’s retail environment is going through a transition primarily due to macro-market forces, like Amazon, and increasingly unfriendly local regulations,” John Banks, the president of REBNY, said in a prepared statement provided to Commercial Observer in response to the mayor’s comments. “Property owners take a substantial financial hit when they are unable to secure a tenant. A vacancy tax, premised on a flawed set of assumptions, will punish owners further and do nothing to address vacancy.”

Brewer’s office did a survey last May that identified 188 empty storefronts from the Battery to Inwood. While she didn’t didn’t provide the total number of storefronts, she said at the time that the “data will be the starting point in finding policy solutions to this problem.” In response, Cushman & Wakefield studied a slightly smaller area the following month. On Broadway between Bowling Green and 146th Street, the brokerage recorded 133 vacant stores out of 1,580 storefronts, representing a vacancy rate of 8.4 percent.

Brokers with whom CO spoke called allegations that landlords are leaving their spaces purposefully empty is erroneous, because it would result in landlords losing revenue.

“I have never met a single one of them that thinks like ‘let’s keep it vacant and I am confident that rents will go up in the next few years,’ ” said Steven Soutendijk, an executive managing director at C&W. “There is almost no justification for keeping your space vacant.”

He added later: “It’s not good for [landlord’s] buildings. It doesn’t help if you have 30 apartments that you are trying to rent and a vacant space on your ground floor.”

Other brokers said that ultimately tenants will be the ones that end up paying for any new tax, because landlords would have to raise rents higher to offset the cost.

But because of all of the vacancies—if there is no new tax—brokers expect rents will come down and subsequently deals will get done to fill those empty spaces.

In fact, asking rents for the top commercial strips in Manhattan were flat or down in the final quarter of 2017 when compared with the same period in 2016, according to C&W. (The 2018 first-quarter statistics were not available yet.)

The largest declines could be found in Soho, which experienced an 16.7 drop to $440 per square foot from $528 a year earlier. Also, there was an 11.7 percent slump in Herald Square to $691 a foot from $783 a foot.

Not only will rents continue to fall to meet the market demands, but also more tenants are taking shorter-term leases to test the market, such as one- or two-year deals, according to Chris DeCrosta, a co-founder of retail brokerage GoodSpace. Afterward, if sales are up, they’ll sign longer leases.

“[Tenants] are just trying to justify that the rents justify the sales. They are tired of landlords saying that this is market rent,” DeCrosta said. “They’ll pay market rent but they want to make sure that they can make money there.”

There are some legitimate reasons for keeping a space vacant, according to TerraCRG’s Peter Schubert. Landlords could be planning to redevelop or renovate their building or are currently in negotiations with tenants, which could last around six months but sometimes as long as two years.

He also explained that sometimes when a deal gets done, stores don’t open immediately because they are waiting on permits, like a liquor license.

“People complain about [vacancies], but they don’t know what is happening behind the scenes,” Schubert said.

To find out more about what is going on behind the scenes, Brewer has called on the City Council to establish a database of vacant properties, in which landlords would be required to report the space as empty and when a new lease is signed and when tenants begins to use it, according to her testimony at the City Council in December 2017.  

There would be a small fee for registration and a larger fine for owners who don’t adhere to the rules after a certain period, a spokesman for Brewer told CO via email.

“If we’re going to tackle vacant storefronts, we need to know what we are dealing with,” Brewer said via prepared remarks. “If we can get a handle on how many vacant storefronts there are, where they are, and how long they’re vacant, we’ll have a much better idea of what the problem is and how to solve it.”

Regarding the vacancy tax, Brewer’s spokesman noted that there is no specific proposal on the table yet and a vacancy tax would likely require authorization from the legislature in Albany.

Source: commercial

Delivering Amazon: This Is What’s Right and Wrong With the City’s Pitches for HQ2

Earlier this week, The Associated Press reported that Amazon received 238 proposals from cities and regions that want to house its second North American headquarters.

Indeed, Amazon has a lot to offer: a promised 50,000 jobs and $5 billion to spend. Everyone—including Gotham—wants in on the action.

In its attempt to lure Jeff Bezos to our city, New York hasn’t shown this much leg since The Deuce era.

More than 70 elected officials—from Public Advocate Letitia James, to Manhattan Borough President Gale Brewer, to City Council Speaker Melissa Mark-Viverito—signed a statement touting New York City’s accessibility to both Boston and Washington, D.C.; its commitment to sustainability; Citi Bike and the largest subway system in the world (wisely, nobody mentioned MTA’s “summer of hell”) and “affordability”—as in, the fact that the administration has promised 200,000 affordable housing units over the next 10 years. (Friendly advice: The word “affordability” isn’t something that really works to New York’s advantage in real estate matters. But too late now.)

“Companies don’t just come to New York,” Mayor Bill de Blasio wrote in his seduction letter. “They become part of New York.”

In its official presentation, the New York City Economic Development Corporation proposed four different neighborhoods that could conceivably do the job: Lower Manhattan, the Far West Side, Long Island City and Downtown Brooklyn.

And while everybody weighs in (Moody’s pegged New York’s chance of landing Amazon as sixth in the country—after Austin, Texas; Atlanta; Philadelphia; Rochester, N.Y.; and Pittsburg—as per a New York Times story), it’s worth considering the four areas up for consideration, what they all have to offer and what the NYCEDC probably won’t mention.—Max Gross

Lower Manhattan

Over the 16 years since the Sept. 11, 2001, World Trade Center attacks, Lower Manhattan has been transformed from a financial district to a commercial and residential hub.

It is this very evolution—plus its transportation network—that makes the neighborhood ideal for Amazon’s second headquarters in North America, Lower Manhattan boosters say.

Amazon wants 500,000 square feet of office space in 2018 with another 7.5 million square feet over time. And Lower Manhattan has the potential for over 8.5 million square feet of space, according to the city’s recent proposal to Amazon.

Granted, Downtown Manhattan would not be the cheapest option nationwide. But, “cost of space should be least of their concerns,” Marty Burger, the chief executive officer of Silverstein Properties, said in a survey for Commercial Observer’s upcoming Owners Magazine. (The landlord owns the majority of the World Trade Center buildings.)

“Most important is access to new talent,” he continued. “You want a place that has A) the best transportation, B) a great pool of people to draw from. When we look at the lower tip of Manhattan, it has the best access to all this talent—Brooklyn, Queens, Staten Island, Jersey City, even Long Island. There are 10 million people to draw that talent from.”

Lower Manhattan has a high concentration of mass transit with 13 subway lines and the PATH train, and those transit hubs have been upgraded with abundant retail and dining options as well as climate-controlled concourses, said John Wheeler, a managing director who runs JLL’s Lower Manhattan office.

Downtown Manhattan boasts access to the waterfront, more than 83 acres of open space and enticing dining options, from food halls like Hudson Eats in Brookfield Place to restaurants helmed by star chefs, like Jean-Georges Vongerichten, Nobuyuki “Nobu” Matsuhisa and Danny Meyer, to fast-casual chains like Chop’t Creative Salad Company and Dig Inn.

Burger has already figured out how to make it work for what’s being called Amazon HQ2.

“We could put together a campus for them,” Burger said. “They could take the top of 3 World Trade Center. We could work with Durst [Organization] to get them the top of 1 World Trade Center. We have a potential to build 2 World Trade Center and 5 World Trade Center. We could put together 7 million square feet.”

But there are also other options for Amazon.

Wheeler noted that, while the World Trade Center would be “part of the solution,” other candidates include Brookfield Place, 28 Liberty Street and Guardian Life Insurance Company of America’s headquarters building at 7 Hanover Square.
Lauren Elkies Schram

Long Island City

Long Island City’s relatively recent transformation from an industrial outpost to Queens waterfront hotspot has been mostly fueled by residential development, with more than 14,000 new units built since 2006 and another 19,000-plus in the pipeline, according to data from the Long Island City Partnership.

As far as commercial development is concerned, however, the neighborhood by most accounts has some way to go. Most of Long Island City’s new office stock has come in the form of repositioning existing warehouse buildings into loft-like spaces mostly of a scale smaller than what Amazon would demand.

But the city is floating LIC as a legitimate option for Amazon, citing the neighborhood’s “creative” appeal as “home to over 150 restaurants, bars and cafés” and more than 40 “arts and cultural institutions” including galleries, museums and theaters, according to the NYCEDC’s proposal.

While the proposal cites “over 13 million square feet of first-class real estate” available in the neighborhood, how much of that qualifies as office space that would suit Amazon’s needs is murkier. Per the LIC Partnership, the area has roughly 7.5 million square feet of existing, nonretail commercial space—which would already fall short of the 8 million that Amazon will eventually require—and another 4.5 million square feet on the way by 2020.

But projects like The Jacx—Tishman Speyer’s two-towered development that promises to bring 1.2 million square feet of Class A office and retail space to Jackson Avenue—hope to further enhance the neighborhood’s office chops. And perhaps the biggest advantage LIC has is its relative affordability compared to the other areas under consideration with the city citing “price points that compare favorably with commercial centers across the five boroughs.”

For developers like TF Cornerstone, which was an early believer in Long Island City and has helped facilitate its transformation via multiple large-scale residential projects, Amazon’s arrival would be a massive boon to the neighborhood’s economy—one that would fuel demand for the thousands of new residential units due to come online, attract needed retail to the area and heighten its profile as an office destination. In turn, LIC’s relatively central location within the five boroughs and robust public transit offerings would give Amazon what it needs for a viable HQ2.

“The north Long Island City waterfront offers the best location for a large user like Amazon,” Jake Elghanayan, a senior vice president at TF Cornerstone, told Commercial Observer in a forthcoming interview for Commercial Observer’s Owners Magazine. Elghanayan cited the neighborhood’s large “contiguous development area” and robust public transit offerings, as well as its proximity to the new Cornell Tech campus on Roosevelt Island.—Rey Mashayekhi

West Side of Manhattan

Those associated with the Hudson Yards megaproject like to say that “a new city” is being built on Manhattan’s Far West Side, and it’s hard to argue with the assessment. With tens of millions of square feet of new commercial space due to come online in the area over the coming years, Hudson Yards would most likely serve as the centerpiece of the city’s effort to get Amazon to commit HQ2 to Manhattan’s West Side.

Besides the sprawling 28-acre development being undertaken by Related Companies and Oxford Properties, there is also Brookfield Property Partners’ Manhattan West project nearby, where Amazon already has a sizable footprint. Last month, the tech giant committed to taking 360,000 square feet of office space at 5 Manhattan West, where it will house 2,000 employees and serve as the primary location for Amazon’s advertising division. (CO first reported that Amazon was in talks for the space in April.)

The city’s proposal for HQ2 also cites the nearby Penn Plaza district, where Vornado Realty Trust—the largest commercial landlord in the area surrounding Penn Station—has in recent years talked up a large-scale repositioning of its assets in a bid to capitalize on the West Side’s newfound appeal as an office destination.

In total, the city says the West Side offers Amazon more than 26 million feet of available office space to build its campus—more than triple the 8 million Amazon will need long term—as well as ample transit options for the company’s sizable workforce: 15 subway lines, plus access to the PATH, the Long Island Rail Road, the Metro-North Railroad and Amtrak, not to mention the Port Authority Bus Terminal and the Hudson River ferry service.

But the West Side could prove cost prohibitive; it is the most expensive of the four New York City submarkets being floated as options for Amazon. With the cost of living and doing business in New York already the biggest drawback in the city’s bid for HQ2, the likes of Related and Brookfield may have to look elsewhere to fill up all that office space.

Such cost concerns aren’t discouraging neighborhood stakeholders, however. “Manhattan’s always been expensive, but it gives you other things,” said Robert Benfatto, the president of the Hudson Yards/Hell’s Kitchen Alliance Business Improvement District. “It has its upsides and downsides, but it tends to be attractive to businesses.”—R.M.

Downtown Brooklyn

Out of the four neighborhoods New York City proposed for Amazon’s second headquarters, the “Brooklyn Tech Triangle” of Dumbo, Downtown Brooklyn and the Navy Yard might hold the most promise. Although the area doesn’t have much office space right now, several large projects are either under construction or in the pipeline. At the Navy Yard, Rudin Management and Boston Properties’ Dock 72 will bring 675,000 square feet of offices—anchored with a 222,000-square-foot WeWork—to a former dry dock on the East River.

Besides Dock 72, landlord Brooklyn Navy Yard Economic Development Corporation is leasing up a newly renovated 1-million-square-foot industrial and office building called Building 77, and there’s available space at Steiner Studios, the film and television production complex on the eastern edge of the yard. The closest subway stations are about a mile away in Dumbo (certainly its biggest drawback), but the yard has begun running shuttle buses that take commuters into Dumbo and Downtown Brooklyn for easy transit access. It’s also about to open a new ferry stop next to Dock 72.

TerraCRG Founder Ofer Cohen dispelled concerns about the Navy Yard’s lack of transit, pointing out that it hasn’t prevented hip companies from setting up shop there. New Lab, an innovative science and tech coworking space, recently opened in Building 128. And Building 77 hosts tenants like startup incubator 1776, a commissary kitchen for small food manufacturers called Tiny Drumsticks and fashion company Lafayette 148. He noted that Dock 72 would probably be the only project large enough to accommodate Amazon’s requirement of 500,000 square feet of office space in 2019.

“Downtown Brooklyn and the Brooklyn Tech Triangle are poised for significant growth,” said Downtown Brooklyn Partnership President Regina Myer. “There’s a huge demand for Class A space in Downtown Brooklyn. We have 1,400 innovative companies in the broader tech triangle. And we have an amazing pipeline of new talent for companies relocating to the tech triangle because we have 10 different colleges.”

Myer pointed to several sites in Downtown Brooklyn that could host Amazon. Rabsky Group could build an office building as large as 770,000 square feet on its vacant parcel at 625 Fulton Street, and RedSky Capital could develop a huge commercial and residential project on its assemblage bounded by Dekalb Avenue, Flatbush Avenue and Fulton Street. And Tishman Speyer is developing the Wheeler, a 10-story office building, on top of the Art Deco Macy’s department store at 422 Fulton Street.

CPEX Real Estate’s Timothy King, the brokerage’s managing partner, pointed out that Amazon would have convenient access to plenty of retail and amenities in Downtown Brooklyn, including hospitals, hotels, shopping, restaurants and bars. And when you consider Atlantic Terminal, the broader tech triangle offers 13 subway lines. “Short of going out in the desert somewhere and building some kind of utopian village,” he said, “I’d be hard pressed to find some place better for Amazon than beautiful Downtown Brooklyn.”—Rebecca Baird-Remba


Source: commercial

City Planning Holds First Hearing On Fate of Gamma Real Estate’s Sutton Place Development

The New York City Planning Commission yesterday held its first hearing on a revised rezoning proposal that aims to limit the scope of Gamma Real Estate’s planned project at 3 Sutton Place.

On October 2, the city certified the new proposal, which allows Gamma to move forward with construction on its planned 67-story, 800-foot-tall residential tower now called Sutton 58—located at 430 East 58th Street between First Avenue and Sutton Place—without the need for an affordable housing component or height cap.

The proposal, brought forth by the East River Fifties Alliance (ERFA), would force Gamma to follow “tower-on-a-base” requirements, which mandates that 45 to 50 percent of the building must be built below 150 feet. The initial rezoning proposal the coalition introduced last June called for a 260-foot height restriction and the inclusion of a significant portion of the tower to affordable housing.

“In their previous proposal, they alleged an affordable housing element. They ended up taking that part out,” Gamma Principal Jonathan Kalikow told CO. “This new proposal really shows their true colors.”

kalikow rally pic City Planning Holds First Hearing On Fate of Gamma Real Estate’s Sutton Place Development
Gamma Principal Jonathan Kalikow speaks in front of construction workers at a rally prior to the hearing. Photo: Mack Burke for Commercial Observer

Prior to the hearing, Kalikow organized and led a small rally in front of City Hall and marched to the Department of City Planning’s offices at 22 Reade Street with labor activists and roughly 20 construction workers carrying signs with messages such as “Preserve Jobs, Not Views,” “No ERFA Backroom Deal” and “Stop Spot Zoning.”

“At the end of the day, people understand this is not the New York City way,” Kalikow told CO while he and his group of supporters were en route to the hearing. “We had a viable process. The fact that we were railroaded, you know, no citizen should want to see that.”

The ERFA wrote in its revised proposal that “the combination of these [new] rules would more closely align future construction with the existing built environment, while still accommodating reasonable growth.” The community coalition consists of 45 area buildings and roughly 2,600 individual supporters who live in approximately 500 buildings in and outside the proposed area of rezoning; it was formed in 2016, shortly after the first announcements of the development, to oppose and combat the construction of Sutton 58. 

Mayor Bill de Blasio’s administration has championed the expansion of affordable housing throughout all five boroughs, but he, as well as the City Planning Commission, opposed the ERFA’s original rezoning proposal, which was backed by several community representatives, including Manhattan Borough President Gale Brewer and Councilman Ben Kallos, who represents the residents of Sutton Place. New York State Senator Liz Krueger has backed the proposal, and recently, New York Congresswoman Carolyn Maloney signed on in support of the ERFA’s mission, having already written and voiced concerns to the CPC on the organization’s behalf, according to an ERFA spokeswoman.

Opponents of the ERFA’s new proposal who testified at the hearing included construction workers from the two companies tapped to build the property—Lendlease, to oversee the project, and Urban, for the building’s foundation—charged with building the project, representatives of New York’s real estate industry, Gamma’s legal counsel and even some residents of the Sutton Place area, who claimed that the bill simply doesn’t benefit the public and only sets a bad precedent for rezoning efforts going forward. They argued that the plan is an effort to spot zone this one property, that it goes directly against de Blasio’s plan to expand affordable housing throughout the five boroughs and that it will also take work away from construction companies as well as inhibit the growth of neighborhood economies.

“The Mayor was very clear about it when he attended a town hall on the Upper East Side a couple weeks ago: [this proposal] would provide an opportunity for people who have the means to mount a challenge to try this method of spot zoning to go forward… it becomes a tool for people to use against any undesirable development,” Real Estate Board of New York President John Banks told CO. “We’re concerned that there is no comprehensive planning that would take place if this becomes more of a norm.”

Members of the ERFA and Kallos said that their efforts don’t constitute an attempt to spot-zone the property and that their rezoning application addresses the entire zoning area. The ERFA, backed by Kallos, wants to take its fight city-wide to stop super tall residential skyscrapers.

The proposal’s supporters at the hearing included elected officials and spokespeople for elected officials, ERFA representatives and residents of Sutton Place. They argued that the community is the victim of what Kallos called an “accident of history” in his official testimony, meaning the nine-block area is the only  residential area of the city zoned R10 without a tower-on-a-base standard or any type of contextual protection. 

“The Sutton area is uniquely vulnerable to the development of super tall towers, a building form that was neither contemplated nor feasible when the R10 district was created in 1961,” Kallos said in his official testimony. “By implementing tower-on-a-base zoning, we would prevent the construction of super-skinny buildings that get to heights of 1,000 feet, by requiring new buildings to pack roughly half of the building into a  base under 150 feet, leaving limited [floor area ratio] for a tower, thus restricting its height.”


Source: commercial

Port Authority Floats Idea of Rebuilding Bus Terminal—Right Where It Is

The Port Authority of New York & New Jersey might rebuild its much-reviled bus terminal on West 42nd Street rather than build a new one elsewhere, officials announced during a board meeting today.

If the bistate agency chooses to keep the bus station in its current spot in Hell’s Kitchen, it would add two floors to the existing four-story structure between West 40th and 42nd Streets and Eighth and Ninth Avenues. The authority could do the construction while maintaining “integral bus operations” and pedestrian access through the huge site, said Steven Plate, the chief of the Port Authority’s capital projects.

He explained that the build-in-place option was structurally viable as long as construction was conducted in phases—meaning that the Port Authority would be able to safely run buses and add extra floors to the building. Similar redevelopment projects have been conducted at the World Trade Center, the Hospital for Special Surgery on the Upper East Side and previously at the bus terminal, Plate said.

Although the terminal was first built in 1950, it was expanded first in 1963 and then again in 1979. The latter renovation added a north wing and a 70-store shopping mall, boosting the station’s size by 50 percent and expanding its footprint to two full blocks, as Commercial Observer noted in a 2015 feature on the terminal.

However, the agency is still considering several development options for the terminal, including seizing property elsewhere to build a new one, or moving it to another state-owned property, like the Javits Center.

A quarter of a million people and 8,000 buses pass through the station every day, and the authority expects that 100,000 people will use it by 2040. The agency has already earmarked $3.5 billion in its budget for redevelopment of the facility, where construction is not expected to begin until a two-year-long environmental review is complete.

This week, the agency issued a request for proposals for a consultant to conduct the environmental review. But many other details, like the expected completion date for the project, remain vague.

The renewed focus on keeping the bus terminal where it is comes after more than a year of controversy among West Side neighbors and elected officials. In October 2015, the agency launched a design competition to solicit plans for a new facility. But some of the proposals involved seizing property through eminent domain, which was a non-starter for local politicians. The eminent domain suggestion also angered nearby residents, who feared that the authority would displace homes and businesses.

Now the Port Authority—which has a new executive director, Rick Cotton, as well as a handful of new board members—claims it’s going to focus on a “robust public outreach program,” Plate said during the meeting. That isn’t surprising, after five elected officials who represent the neighborhood—including Rep. Jerrold Nadler, Manhattan Borough President Gale Brewer and Councilman Corey Johnson—penned a letter to the agency’s chairman last November slamming the design competition and the planning process up to that point.

“This type of large-scale project must be planned with an objective eye towards the communities it serves, both the surrounding residents and the passengers that are coming to New York City,” the politicians wrote.


Source: commercial

City Pushes Back Garment District Rezoning, as Brewer Demands Changes

The city has indefinitely delayed the controversial rezoning of the Garment District just as a steering committee led by Manhattan Borough President Gale Brewer has released its own plan to protect the area’s century-old manufacturing industry.

In March, the New York City Economic Development Corporation unveiled a proposal to lift rules that required property owners in the district to preserve manufacturing space as they converted buildings to offices. The current zoning in certain parts of the Garment District forces owners to maintain equal amounts of office and manufacturing space in their properties.

Essentially, the city wants to free up owners to rent more square footage to office tenants, who can pay much higher rents than clothing makers and distributors. The change would apply to the areas of the district that are currently zoned for industrial use, stretching roughly from West 35th to West 40th Streets and from Eighth Avenue to Broadway.

Newly released recommendations from the Garment Center Steering Committee fall along the same lines as the city’s proposal, with a handful of notable exceptions. The committee demands that the industrial preservation requirement be phased out over time, rather than all at once as the city wants. The city could then lift the preservation rule once the district preserves between 500,000 and 750,000 square feet of garment manufacturing space, the steering committee’s report suggests. However, the square footage target may shift, depending on whether it’s met within a set (yet-to-be-determined) time period.

“Whether the administration’s garment industry plans succeed or fail is up to them: what we’ve produced is the recipe for success, and the most important ingredient is the phase-in requirement,” Brewer said in a statement accompanying the plan.

Brewer and the committee—which includes the Real Estate Board of New York, Community Boards 4 and 5, City Councilmembers Daniel Garodnick and Corey Johnson and garment workers unions—-also recommend that the city create a custom New York City Industrial Development Agency program to retain garment production businesses in the neighborhood. The setup would offer deeper tax breaks and rent subsidies to owners who preserve more production space in their buildings. The proposed program would apply to properties between West 28th and West 42nd Streets and from Fifth to 10th Avenues.

Another proposal from the steering committee calls for city agencies and the City Council to band together to fund the purchase of a building in the district that would offer long-term, guaranteed space to garment makers. Brewer also backs restrictions on hotel development in the district, which has exploded over the last two decades. The city’s original rezoning plan included a special permit that would require developers to go through a full land-use review process in order to build new hotels.

Garment District Alliance head Barbara Blair blasted the steering committee’s plans, despite the fact that the non-profit was on the committee. She leveled particularly sharp criticism at the phase-out recommendation for the industrial zoning.

As repeatedly stated in the process, the GDA does not support any proposal that does not have a ‘date-certain’ term for the removal of the zoning restrictions,” Blair said in a statement. “While we are supportive of the IDA programs to incentivize owners, and we encourage the city to explore purchasing a building for the industry in addition to what they are already offering in Brooklyn, we do not support any phase-out provisions.”

In order to cushion the blow of removing the industrial preservation rules, the city has offered $51 million to help manufacturers move from the Garment District to the Brooklyn Army Terminal and Bush Terminal in Sunset Park. Asking rents in the two sprawling industrial campuses range from $16 to $25 a square foot, less than half of what typical manufacturing space rents for in the Midtown district, Blair told CO earlier this year.

Meanwhile, the city did not take a position on the steering committee recommendations. And it didn’t offer a new date for when the rezoning would enter public review, after telling the Wall Street Journal earlier this week that the City Planning Commission would certify the zoning on August 21.

“We have received the report released by the Manhattan borough president’s office and look forward to a more thorough review of its recommendations,” said EDC spokesman Anthony Hogrebe. “It became clear to us during the process of developing the recommendations that some were supported by all stakeholders while others were not. We’ll review the report and determine which recommendations are good policy and whether others can be adapted to support garment manufacturing and help grow good jobs for New Yorkers.”


Source: commercial

Midtown East Rezoning Clears Final Hurdle

The City Council today finalized new zoning for Midtown East that will allow private developers to build new office towers and require them to contribute funding for public improvements.

The new land use framework will boost the potential density and height of new commercial buildings along 78 blocks of Midtown, from East 39th to East 57th Streets and from the east side of Third Avenue to the west side of Madison Avenue. The city predicts that the zoning will pave the way for 6.8 million square feet of new office space and encourage the renovation of 6.6 million square feet of older offices into newer, Class A space.

The proposal has evolved several times since it was first introduced by the Bloomberg administration in April 2012 and subsequently killed by the City Council in November 2013.

City Councilman Dan Garodnick, who helped shoot down the Bloomberg-era rezoning, worked with Manhattan Borough President Gale Brewer to draft a new set of recommendations for East Midtown in November 2015. Their updated plan focused on ensuring that developers kicked in funding for key transit and street improvements.

“With this vote, we are breathing new life into New York’s most important business district,” Garodnick said in prepared remarks following the final vote this afternoon. “Not only will we see sensible growth, but the public will benefit from extraordinary new investments in above-ground public spaces and in below-ground subway infrastructure. Better transit, new jobs, top-of-the-line office space: East Midtown is back, full of optimism and open for business.”

The latest version of the zoning entered public review in January, but some new details were hashed out when the City Council’s Land Use Committee greenlighted the plan last month.

The city approved $50 million in capital funds for public spaces, including widening sidewalks and restricting car access on East 43rd Street between Lexington and Third Avenues, a revamp of Pershing Plaza by Grand Central Terminal, and street improvements along East 53rd Street and Lexington Avenue.

The new Midtown East zoning will allow developers to use extra floor area in new buildings via one of three avenues: tapping into a pool of 3.5 million square feet of unused air rights for landmarked buildings, funding transit or streetscape improvements, or redeveloping an office building that’s built larger than current zoning allows. The rules are based on the rezoning that city crafted for One Vanderbilt. Developer SL Green must perform $220 million worth of transit improvements around the Grand Central Terminal subway station before it can get a certificate of occupancy from the city.

Under the Midtown East plan, developers can only use landmark air rights if they pay 20 percent of the value of the sale of the air rights to the city. After the Real Estate Board of New York and owners of landmark buildings fought the city’s proposed air rights floor of $78 a square foot, the city agreed to lower the minimum contribution to $61.49 a square foot.

“East Midtown’s growth is now directly linked to real-time improvements in its public transit and public realm,” Mayor Bill de Blasio said in prepared comments. “In the years ahead, this neighborhood will see major upgrades to subway stations, more expansive space for pedestrians, investments in its iconic landmarks and a new generation of office buildings that will spur good jobs for New Yorkers.”


Source: commercial

Midtown East Rezoning End in Sight


Source: commercial

Deal Reached for Midtown East Rezoning


Source: commercial