The rezoning of Midtown East to allow for larger office towers and public infrastructure improvements was approved by a City Council subcommittee on Thursday, Crain’s first reported, paving the way for what is likely to be an approval by the full City Council as well.
The rezoning concerns a nearly 78-block stretch, and will be roughly bound by East 39th and East 57th Street (south and north) and Third and Fifth Avenues (east and west). The rezoning will allow developers to use unused air rights from landmarked buildings in the area to build bigger projects.
In order to do so they will also have to make several concessions to the public. For instance, any building larger than 30,000 square feet will have to maintain Privately Owned Public Spaces (POPS), and the city expects that about 16 new POPS will be created.
Developers building next to subway stops will also have the opportunity to increase the density of their development by making transit improvements. These include creating new street-level exits, improving passenger flow, and widening staircases. The city expects that the rezoning will generate $500 million worth of transit improvements.
“With this rezoning, we are delivering a framework that will unlock development while delivering extraordinary benefits to the public,” City Councilman Daniel Garodnick, said in a statement. “We are not only enabling Class A office spaces, but we are also creating a Class A office district to go with them.”
Since it was introduced last August, the plan has seen some tweaks as it has moved through the public review process. Previously, Community Boards 5 & 6 had voted against the proposal due to the lack of space, but they have now come on board.
Previously, Turtle Bay residents were opposed to having new office buildings in their mostly residential area, so the rezoning has now left out about five blocks east of Third Avenue. The proposal also had the backing of Manhattan Borough President Gale Brewer, and the City Planning Commission signed off on it last month.
One of the major points of contention that remains has to do with the price of air rights. A portion of the air rights sale will go towards public improvements and the city has now set that at $61.49 per square foot or a 20 percent minimum contribution, whichever is higher. The city expects that this will generate $350 million for public improvements.
The Real Estate Board of New York, which had also previously been opposed to setting this minimum benchmark, was not pleased with the city’s decision despite the latter lowering the minimum amount.
“Today’s agreement is a missed opportunity to ensure more, rather than less, commercial development,” John Banks, the president of REBNY said in a statement to The Real Deal. “As a result, it is less likely that the public improvements that are needed in Greater East Midtown will be achieved.”