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Land Use Committee Greenlights Midtown East Rezoning

Manhattan Skyline Gearing Up for a Major Makeover

The iconic skyline of Midtown East is gearing up for a major makeover. Landmarks such as the Chrysler Building are at risk of being overshadowed by megatowers – and according to Justin Davidson, architecture critic for New York Magazine, the danger is now more real than ever.

The long-awaited rezoning of Manhattan’s Midtown East was recently approved unanimously by the City Council subcommittee. The revised proposal is now complete with changes to air rights pricing and upgrades to the transit network area and pedestrian realm, according to The Real Deal.

The voting took place on July 27th, finally moving the proposal forward after months of being dragged through the land use review process. However, nothing is yet set in stone, as the full council is due to vote on Aug. 9—though the council typically abides by the subcommittee’s vote.

Changes regarding zoning and franchises were approved by the subcommittee early in the day on Thursday. According to The Real Deal, the adjustments included a decrease in the public’s cut of air rights sales.

In the case of development rights transferred from landmarked buildings, $61.49 per square foot (or 20% of the sale, whichever amount is greater) must be set aside for the public realm improvement fund. This places the price of the deals at a minimum of $307.45 per square foot, down almost $100 from the initially proposed price of $393 per square foot.

Catholic Church Might Cash In on Air Rights

Major landowners in the district, including the Archdiocese of New York and the Real Estate Board of New York, were not satisfied with the changes. They claim that the cut didn’t go as deep as it could have—REBNY had initially pushed for a floor price of $179 per square foot.

A New York Times report revealed that the Roman Catholic archdiocese is no stranger to lobbying.  City records show that in its effort to try and influence the rezoning proposal, the archdiocese sought the help of a specialized lobbying firm and has paid a total of $320,000 to Kasirer Consulting since 2014. The Archdiocese had been looking for greater freedom regarding the sale of its valuable air rights.

Other changes to the original proposal include the exclusion of five blocks along Third Avenue – 46th through 51st streets – from the rezoning. Turtle Bay residents insisted that the area be excluded from the rezoning plan, since most of it consists of residential space. Consequently, even if they won’t be able to build larger, building owners along this stretch of avenue can rebuild their properties to their existing size.

An additional 6.5 million square feet of new office space is expected to come online over the next two decades following the rezoning. By taking advantage of the 3.5 million square feet of landmarked air rights or by making specific transit infrastructure improvements, developers have a great opportunity ahead of them.

The rezoning proposal was initially shot down in November 2013 by the Bloomberg administration, which didn’t have the support of the City Council. At the time, council member Dan Garodnick stated that the proposal “delivered a lot of certainty to the real estate community, but not a lot of certainty to the public.” The new version is meant to correct that flaw and ensure that everyone benefits from the rezoning changes.

Roxana Poenar

Roxana Poenar

With a taste for learning, Roxana joined PropertyShark in order to expand her knowledge of all things real estate. Passionate about reading and travelling, if she's not at her desk or engrossed in one of her books, then she's probably packing her backpack for a new adventure.

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