Word began to spread yesterday evening that the Midtown East Rezoning would not have enough support to be approved by City Council when it was voted on later this week, and the Bloomberg administration responded by saying that they would withdraw the proposal. So, for now at least, the Midtown East Rezoning is effectively dead, with much of the credit—or blame, depending on where you're coming from—going to Council Speaker Christine Quinn and her possible successor Daniel Garodnick, who represents most of the area that would have been rezoned. There are a number of things to take away here, the main one being that this is a huge a blow to Bloomberg, both in terms of his remaining days in office and his legacy, which the Midtown East Rezoning would have cemented.
Real estate source, on death of Midtown East rezoning plan: "In some ways, the Bloomberg administration really ended today."— Andrew J. Hawkins (@andyjayhawk) November 12, 2013
Mayor-Elect Bill de Blasio said in a statement: "For the sake of New York City's long-term economic vitality, Midtown East should be re-zoned to allow the creation of a world-class 21st-century commercial district. But it needs to be done right." So, clearly, the rezoning is not "dead" in the conventional sense—it's more like it has been placed in a medically induced coma and will have some cosmetic procedures performed while it's under.
City Council rightly rejects East Midtown plan, which shouldn't close door on narrower rezone by De Blasio, w public realm upgrades first.— Michael Kimmelman (@kimmelman) November 12, 2013
The specific changes that will occur to the proposal have yet to be ironed out, but most speculate that they will have to do with extracting more in the way of community benefits from developers. Garodnick told the Observer that he "would like to see ... 'a more robust infrastructure and public realm program,' changing the fixed air rights pricing to pricing that 'addresses differences in geography or time' as well as further study of 'the proper level of density of Midtown East as compared to other commercial districts in the city.'"
Everyone, even Bloomberg himself, recognizes that the rezoning of the Midtown East is inevitable, with his statement reading, in part: "The inability to reach a consensus on the plan's details is regrettable, but it was encouraging that nearly everyone involved in the process recognized the need for the area to be rezoned ... We are glad to at least be leaving the next administration a blueprint for future action." Don't tell that to the Post, though, who had not one but two editorials condemning Garodnick and Quinn for squashing the proposal. "In a single craven stroke," begins Steve Cuozzo's, "lame-duck Speaker Christine Quinn and weak-willed City Councilman Dan Garodnick have likely consigned the once dominant Grand Central area to a permanent future as a back-office district."
Also instrumental in killing the rezoning was the umbrella union group the Hotel Trades Union and its president, Peter Ward. "The Bloomberg administration had rejected Mr. Ward's request that plans for hotels in the district go through a special approval process that has often allowed the union to secure guarantees on wage levels," writes the Times and Capital New York writes that the Hotel Trades Union's support "is arguably of more practical value [than that of the real estate industry] when it comes to Garodnick's speakership aspirations." Whether or not Ward really had that much sway, the fact that he is getting so much credit means that the delay is undoubtedly as good for unionized hotel workers as it is bad for the Real Estate Board of New York.
It's not bad news for the entire real estate industry, however. Crain's points out that, "Among the likely beneficiaries are the Related Cos. and Brookfield Office Properties, who are planning to put up multiple new office towers in Hudson Yards west of Pennsylvania Station. So too is Silverstein Properties, the developer which will open its first new tower at the World Trade Center site on Wednesday and has laid the ground work for two more towers nearby." With the city's demand for office space climbing, those projects just got a whole lot more attractive.
· Midtown East Rezoning coverage [Curbed]