Last week’s City Planning Commission (CPC) hearing on the long-awaited rezoning of East Midtown demonstrated that the proposal is moving in the right direction – and that is something all New Yorkers should welcome.
There’s a long way to go before the City Council takes up the issue but the hearing marked an important step towards generating a new wave of Class A office space in East Midtown that will greatly benefit residents, commuters, businesses and our citywide economy.
The rezoning will affect 73 blocks within East Midtown, from 39th Street to 57th Street and between Madison Avenue and Third Avenue. It has the potential to create approximately 15 million square feet of new commercial space to the area over the next 20 years.
At a time when businesses are finding new homes in all corners of New York City, this effort will ensure that East Midtown retains its status as the city’s premier office district. New commercial development will also provide much-needed transit infrastructure improvements, critical funding for our treasured landmarks and essential funds for public realm improvements.
In their testimony before the CPC, Manhattan Borough President Gale Brewer and City Council Member Dan Garodnick showed great leadership by recommending important changes to the plan before it receives approval under the city’s Uniform Land Use Review Procedure (ULURP). Brewer and Garodnick essentially recognized that the initial proposal contained one major obstacle to ensuring the new development necessary to achieve real success in East Midtown.
Specifically, Brewer and Garodnick pushed for a change to the plan’s minimum price for sale of unused development rights. Many in the development and preservation community had been concerned about the proposal’s inordinately high price floor for air rights sales within the rezoned district. That proposal would have charged 20 percent of either $393 per square foot or 20 percent of the actual sales price – whichever was higher.
The reality is that a floor price based on a $393 figure would in fact impede development in East Midtown and stifle air right sales and much-needed economic growth. This could essentially undercut some of the important benefits of rezoning the area in the first place, including new transit infrastructure and public realm improvements. We must also remember that East Midtown serves as a major source of real property tax revenue that pays for vital city services. If we inhibit development there, we are just giving away revenue that benefits New Yorkers.
With that in mind, Brewer and Garodnick rightly argued that the $393 price floor figure was too high and said that a lower minimum price would be more appropriate and more likely to facilitate transactions. Based on the City’s own data and methodology, REBNY has suggested that a price floor of 20 percent of $179 per square foot is appropriate for the contribution for buying back overbuilt space and for ensuring development can move forward without impediment.
City officials have acknowledged these concerns and have now committed to revisiting that aspect of the proposal. We applaud the City for this wise decision. Deputy Mayor Alicia Glen deserves particular credit for listening to all stakeholders and taking every step to make the rezoning a success.
I am extremely pleased that this comprehensive, inclusive process has resulted in positive progress for East Midtown and I look forward to seeing it move ahead through the remaining ULURP approvals, which will culminate with a City Council vote. The rezoning of East Midtown would be a catalyst for a wave of new commercial development in that area over the next two decades. This action will safeguard the district from falling into obsolescence.
Our city’s economy will grow, millions of visitors and New Yorkers alike will reap a multitude of benefits from the new development spurred by the rezoning of East Midtown.
In other REBNY news:
Charles R. Bendit of Taconic Investment Partners, Michael Geoghegan of CBRE, Inc., Jonathan L. Mechanic, Esq. of Fried, Frank, Harris, and Shriver & Jacobson, and Neil L. Rock, Esq., Skadden, Arps, Slate, Meagher & Flom will speak on the panel at our Commercial Seminar, “Negotiating for New Construction,” to be moderated by Michael Laginestra of CBRE, Inc. on Tuesday, May 9 from 8:00 to 10:00 a.m. at REBNY. Visit rebny.com to register.
On Tuesday, May 16 from 9:30 to 11:00 a.m. at REBNY, Eric Barron of Triplemint will moderate our Residential Breakfast Club Seminar: “Top Agents Share Valuable Lessons Learned from their Coaches”. This FREE seminar is open to REBNY Residential Members. Register online at rebny.com
Join us at our free Uptown Open House Expo on Sunday, May 21st to view available cooperative, condominium, and townhouse listings for sale and new development rental exclusives in Harlem, Washington Heights, and Inwood. All listings will be shown from 12:00 to 4:00 p.m., following a breakfast Meet & Greet from 10:00 to 11:30 a.m. at Cecil’s/Minton’s Harlem (210 West 118th Street). Visit rebny.com to register for the Meet & Greet or contact rebnyresidentialevents@rebny.com for more information.
