Investing in New York City
More Residential Space Included in Amendments to Midtown East Rezoning Proposal
After receiving a number of critiques against the Midtown East rezoning proposal, New York City’s Department of City Planning announced on Thursday an amended version of the plan which aims for an overhaul of the real estate scene between Second and Fifth Avenues, going all the way from 37th Street to 57th Street. In the newly released version of the proposal, care has been taken to address some of the concerns critics made about the original, which the city hopes will make the proposal’s passage a less painful affair.
was that it didn’t have enough space allocated for residential use. However, the new version proposes that developers should be allowed to have residential units take up 20% of the space in the new skyscrapers that they can build as part of the rezoning process—such a clause could serve as good incentive for developers to build in this newly available area, given that residential units are much more profitable than commercial units in the New York City real estate market.
But there’s more for developers to look forward to—if they receive a special permit, then they get to set apart up to 40% of the space they build for residential use. The city will also benefit from this arrangement since they will be selling the development rights and using the revenue from that to improve transit and infrastructure in and around Grand Central Terminal. Given that , it is almost certain that the city will be scoring a good profit through this venture.
Another major amendment in the proposal is to allow landmark structures like the Waldorf Astoria Hotel, St. Patrick’s Cathedral and Central Synagogue to sell off their air rights—currently, over 2 million square feet of air rights remain unused because the city bars landmarks and religious institutions from transferring their development rights. If this amendment is put into effect, the owners of these buildings, much like the city, will be making a huge profit, given the real estate development potential of this section of Midtown Manhattan.
One of the noteworthy critics of the original rezoning proposal was the New York Hotel Trades Council, who had demanded that any new hotels built should be subjected to an approval process. A third amendment does just that, by making sure every hotel project gets through a proper review process. to force rezoning critics to change their current stances, it now seems more likely that Mayor Mike Bloomberg will be able to realize his dream of being able to leave office with the rezoning of Midtown East underway.