Even though the proposed rezoning of Midtown East is still in the planning stages (and making its way through the approvals process), it’s already coming up against somewhat of a roadblock. The plan, which concerns about 78 blocks around Grand Central Terminal, would primarily involve the sale of air rights from existing buildings in the area to boost new office development. The funds from the sale would help the existing landmarked buildings with their upkeep, and would help the city carry out infrastructural improvements in the area to make it more marketable.
The city however wants to place a minimum price on the air rights, and the current property owners and developers aren’t too pleased about it, Crain’s reports. From the city’s perspective, if they set a minimum price, they can ensure that improvements to the streets and transportation will definitely move forward. The city could get up to 40 percent of the proceeds from the air rights sale.
Property owners however are concerned that a minimum price will deter developers from buying. They want to get the highest price possible as well, but they expressed concerns that faced with a dip in the market, developers would be deterred from paying a high minimum price.
St. Patrick’s Cathedral for instance has nearly one million square feet of development rights to offer, but they too are concerned that setting a minimum would eventually impact infrastructural improvements in the neighborhood due to a lack of funding.
The Department of City Planning’s proposal as it stands now, which was unveiled in August, envisions the creation of about 16 new buildings if the rezoning moves forward. While most of that will be new offices, there are also plans for about 119 apartments, and 600,000 square feet of retail. About 3.5 million square feet of air rights are at stake in the overall area proposed for rezoning, and developers will be able to increase the density of development in the area (build taller for example) by up to 30 percent.