Wake-up call for City Councilman Dan Garodnick, who killed former Mayor Michael Bloomberg’s East Midtown rezoning proposal: The exodus of marquee-name companies out of your district is turning into a stampede.
The fabled Grand Central area threatens to deteriorate into a commercial backwater if zoning isn’t changed to allow construction of new buildings suitable for today’s sophisticated companies.
The latest to flee: law firm Reed Smith, expected to sign a big lease at 7 Bryant Park, a new office tower rising at Sixth Avenue and West 39th Street. Meanwhile, Twitter is ankling to 245 W. 17th St. — a building that, although more than 100 years old, is more “modern” than East Midtown’s collection of 1960s, “Mad Men”-era dinosaurs.
Those bailouts come on the heels of Citigroup’s decision to dump its longtime headquarters at 399 Park Ave. for 388 and 390 Greenwich St. downtown. Plus, law firm Jones Day is bolting East 41st Street for Brookfield Place in Battery Park City.
Each of these relocations will drain East Midtown of thousands of employees and dump hundreds of thousands of square feet of office space on the market.
Sitting atop commuter-train and subway lines linked to the region’s deepest and richest talent pools, blessed with unparalleled shopping, dining and cultural amenities, East Midtown ought to be every company’s No. 1 choice.
Some Fortune 500 companies still call the area home, but for how much longer? The momentum is overwhelmingly in the direction of flight for the glamour firms that pay the most taxes, draw the best and brightest employees and define the city in the world’s eyes.
Who else is gone or planning to go? Or, in the case of companies moving from other neighborhoods, which ones have chosen a new home anywhere but in East Midtown’s 73 blocks?
The roster’s sobering: Time Warner, Coach Inc. and L’Oreal are headed to Hudson Yards; Facebook to Greenwich Village; Sony to Madison Square Park; Conde Nast and ad giant GroupM to the World Trade Center, and IBM’s Watson Group from Armonk to 51 Astor Place.
Google set up shop at Eighth Avenue and 15th Street, Microsoft at Eighth Avenue and 42nd Street and Tiffany & Co. at Fifth Avenue and 23rd Street. Previously, Bank of America, Reuters, Ernst & Young, the New York Times Co., Grey Group and HarperCollins similarly shunned East Midtown.
Once, East Midtown could thrive on its reputation alone. When it came to choosing a corporate home, “it used to be location first, and the actual property second,” notes Mary Ann Tighe, the regional chairman for real-estate services giant CBRE. But today, “most companies will examine options all the way from the Battery to 59th Street,” she says.
What are they looking for? Features and amenities that don’t exist in East Midtown, whose buildings are on average 73 years old and lack state-of-the-art electronic and environmental features and what Tighe calls a “collaborative, tech-fueled environment.”
The area atrophied due to zoning rules written in 1961, which forbid not only larger towers than now stand but even replacements of the same size. Garodnick, whose 4th Council District includes East Midtown, says he wants to upzone it. Yet his insistence on infinitely extended “infrastructure” upgrades first means no rezoning may occur for years — especially since Mayor de Blasio and new Council Speaker Melissa Mark-Viterito have other priorities.
Garodnick recently framed the rezoning issue this way to the weekly Our Town: “It’s paired with improvements to the Grand Central subway experience — finding ways to move trains out of Grand Central faster, creating more space on the platforms, improving pedestrian flow, improving commuter flow.”
In other words, he views rezoning mainly as a means to “fix” supposedly dire crowding and related problems. Never mind that Bloomberg’s proposal required developers to pitch into a “district-improvement fund” for that purpose and that Mayor Mike pre-committed $100 million in city money to it — or that Grand Central subway matters are up to the MTA, a state agency.
Although he lost his bid to become speaker, Garodnick still has a lot of clout. He can yet redeem himself for last year’s blunder — or be remembered for letting his district deteriorate to the point of ruin.