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The Rezoning of Midtown East

Real Estate Developments

New plans to rezone Midtown East, Manhattan have recently been proposed by the Department of City Planning (DCP) and Mayor Bill de Blasio.  These plans incorporate many different development strategies in an attempt to revitalize business in the area, which has recently been emigrating to more financially and technologically-progressive areas of the City.  Workspace is tight in Midtown East, and the average office building is 75 years old.  Advocates of the rezoning plan believe it will allow the area to meet the needs of modern business and real estate interests.

The plan was originally introduced under Mayor Michael Bloomberg in 2013, but it was unable to gather support in the City Council.  In 2015, the plan was reintroduced by Mayor de Blasio, and tweaked with the help of City Council member Dan Garodnick and Manhattan Borough President Gale Brewer.  It is currently undergoing the Uniform Land-Use Review Procedure, which is a seven-month process incorporating environmental review and ending with a vote by the City Council.

If voted into law, the rezoning would bring with it many changes in local development policy.  Buildings would be able to increase their floor-to-area ratio (FAR) from about 15 to as high as 18.  Put simply, this means buildings could grow up and out to a greater extent than ever before.  Higher FAR may be purchased on the condition that any transit routes affected by greater building size be appropriately rerouted and upgraded in conjunction with the MTA, and paid for by the developers.  Sixteen new office and residential buildings are currently being planned in anticipation of this rezoning.

Under this new rezoning proposal, the air rights above city landmarks would be available for sale to private interests.  The law currently forbids (except with special permit) the air rights above structures such as Grand Central Terminal and St. Patrick’s Cathedral from being sold to any entity other than adjacent landowners.  This proposal would give developers additional building space while simultaneously funding these landmarks.  A minimum 20 percent of the sale price would be withheld by the City to pay for improvements in public infrastructure.

The price of air rights above landmarks has been set by the DCP at $393 per square foot.  This has been criticized by the Real Estate Board of New York, which believes this price is unrealistically high and should instead be negotiable between buyer and seller.  The New York Landmarks Conservancy also criticizes the air rights proposal, arguing that the high price and minimum withholding of proceeds would disincentivize prospective buyers.

In a move to modernize, Midtown East is proposing a zoning overhaul.  Certain aspects of the plan still need to be hammered out, but it is quickly moving through the review process and looks destined to pass.

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