By Orlando Lee Rodriguez
Back in October, New York City Mayor Michael Bloomberg and the Department of City Planning put forth a proposal for the rezoning of East Midtown. Many felt the plans were rushed and needed to be looked at more thoroughly.
But the Bloomberg Administration has insisted that office buildings in the 70 blocks around Grand Central Station should be allowed to be built higher to keep up with office tenants demands, which by today’s standards require 5-9 people for every 1,000 square feet.
This, the administration says, will help the East Midtown district stay competitive.
However, speaking at a 92nd Street Y Master Class on Monday, developers William L. Mack, founder of AREA Property Partners and chairman of Mack-Cali Realty Co., and Stephen M. Ross, chairman of the Related Companies, predicted that the current move westward by office tenants will continue into the foreseeable future, regardless of any re-zoning attempts by the city.
“The use of office space is different than it was 20 years ago,” said Mack. “These buildings that exist don’t have the infrastructure to handle the new loads. They don’t have the elevators, they don’t have the column spacing. They are not as efficient as new buildings with all of the amenities.
“On the West Side, you have so much space. You’ve got the land, you’ve got the zoning and you can build those modern, open plans with elevator and bathroom facilities, floor loads, clear heights to be able to accommodate what the new office plan is,” he said.
Ironically, it is the open floor, bullpen style floor plan made popular by Bloomberg LP, that may create a significant lag in any new office development in East Midtown that Mayor Bloomberg desires.
Both Mack and Ross agreed that although building would eventually happen, it is probably “years away.”
One challenge to the Mayor’s proposal becoming an immediate reality is that despite the fact that many East Midtown office spaces are obsolete, they currently run at almost 100% capacity.
Ross felt that most investors would prefer an existing rental income stream, rather than borrow massive amounts of money for re-development.
“I don’t think you’ll find as much development occurring in any short period of time,” Ross said. “Those buildings today are all occupied; to empty out those buildings and create sites will take years. People today would buy those income streams at very high prices. Growth won’t occur in that area.”
Ross indicated growth is more likely to occur on the far West Side, where his company has begun construction on the first office tower for Hudson Yards. New construction has also begun to alter the landscape in the area surrounding Hudson Yards where the number 7 train extension is set to open in 2014.
In contrast, the Second Avenue subway service south of 63rd Street will not exist maybe for decades.
Another major obstacle to any grand Midtown East plan are the financial drawbacks a competing East Side mandate could cause the investment that the city and state have already made into developing the far West Side.
“The City of New York and the State of New York have made enormous financial contributions both in the form of tax incentives and subsidies to encourage the development of Hudson Yards,” said the Municipal Arts Society during their comments to the East Midtown Environmental Review in November.
“There is a possibility that if these areas develop or lease up less quickly than is expected, the public sector will continue to have to bear the financial brunt of the investment,” they said.
The MAS has also submitted a list of 17 East Midtown buildings to the Landmarks Preservation Commission, many of them along Lexington, Vanderbilt and Park Avenues, the core of the area.
Many East Midtown office buildings are from the Art-Deco era and cities like Miami Beach have protected Art-Deco era buildings, transforming the districts into national landmarks.
But what may be the biggest single obstacle to any quick East Side resurgence is the marker of change itself and what is new. Over the city’s history, this wave of change has shifted, first flowing northward in the 1800’s as the city expanded, and ebbing and flowing from neighborhood to neighborhood ever since.
And for now, from the Meatpacking District, to Clinton, to the Hudson Yards, the flow of change seems to have shifted steadily toward the West Side.
“With the up zoning of the East Side over a period of time, the land value will get valuable enough for them to demolish the buildings and build new office towers there,” said Mack. “But it’s a ways away.”