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East Midtown Rezoning Plan Unanimously OK'd by Council Land Use Committee

By Shaye Weaver | July 27, 2017 5:38pm
 Councilman Dan Garodnick (at podium) said the amendments to the proposal present regulations that will bring certainty to the real estate industry and to the community.
Councilman Dan Garodnick (at podium) said the amendments to the proposal present regulations that will bring certainty to the real estate industry and to the community.
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DNAinfo/Shaye Weaver

MIDTOWN — The plan to rezone a portion of Midtown East by bringing in bigger and newer skyscrapers and building more public plazas cleared another hurdle Thursday.

The City Council's land use committee voted 15 to 0 to approve the Midtown East Rezoning Plan, which will permit developers to build higher as long as they make required contributions to the public — like money for transit improvements, buying development rights from adjacent landmarks to help preserve them, and creating public plazas on their properties.

Now, all that remains is review by the City Planning Commission and a final vote by the full City Council.

"This rezoning will unlock the potential for 6-and-a-half million square feet of commercial development in East Midtown, bringing much top-of-the-line commercial space to the area," Councilman Dan Gardonick, who has been a leading proponent of the plan, said on Thursday morning before the vote. "East Midtown is back. It is open for business. This is a plan that will reestablish East Midtown as the crown jewel of our business districts."

► READ MORE: East Midtown Rezoning Plan: What You Need to Know

On Thursday morning, Garodnick announced new details of the plan that were voted on that afternoon.

The 78 blocks covered by the proposed rezoning — from 57th Street to the north, 39th Street to the south, Third Avenue to the east, and Madison Avenue to the west — includes a list of pre-identified transit improvement projects that Garodnick said ensure the public knows exactly what developers will be pitching in on in exchange for height bonuses.

"A developer of a building in a transit zone will know up front what transit improvements they need to build to build a larger building," he said. "Developers won't be able to occupy their buildings until transit improvements are made."

The hope is to lure developers and businesses back to the area, which has lost a lot of interest since the majority of its buildings are 75 years old, while making it a safe and open space for pedestrians and workers alike, city officials said.

With the amendments, developers who buy air rights from landmarks will be hit with an automatic 20 percent tax or will be charged a minimum price of $61.49 per square foot — whichever is higher.

The tax was agreed upon Wednesday night after officials removed land sales from their calculation of average air-rights sales, changing it from the city's original plan to charge $78.60 per square foot to $61.49, according to Deputy Mayor for Housing and Economic Development Alicia Glen.

A market study commissioned by the NYC Economic Development Corporation found that air-rights prices in the rezoning area averaged $301 in 2015 dollars, but the de Blasio administration is pushing for the fixed minimum price out of concern that without it, developers could artificially depress the value of air rights, according to The Real Deal.

The proceeds from the tax would be put into a fund toward public improvements that is expected to collect roughly $350 million, officials said.

"$61.49 gives us assurance that money will be coming into this fund," Glen said Thursday morning.

City Hall has already promised $50 million in seed money for the fund, which will go directly toward creating a 6,000-square-foot pedestrian-friendly block on 43rd Street, between Lexington and Third avenues, according to Garodnick.

Additionally, developers building projects larger than 30,000 square feet will be required to create these spaces. The city expects the new requirements to generate 16 new privately owned public spaces in the district.

Those who take advantage of the new zoning would have to have a minimum of 75 feet of street frontage as well. Several blocks in the Turtle Bay area will be excluded from the plan based on residents' arguments that their area is residential.

City Planning will review the plan next to ensure that it adheres to the agency's environmental review, after which it will go before the City Council for final approval on Aug. 9.