Manhattan’s premier office district is increasingly obsolete — its buildings frozen in time by half-century-old zoning rules. But Mayor Bloomberg’s plan to finally up-zone the Grand Central area looks less like a fix than a way to set up a piggy bank to pay for future mayors’ “street improvement” follies.
The area, full of buildings up to 70 years old, urgently needs larger new ones than current zoning allows. (Except through a review process so arduous it’s only been used once, rules from 1961 don’t permit buildings to be replaced with new ones of even the same size.)
But the city isn’t making it easy for landlords to get rid of the relics. If Bloomberg really wants to kick-start Midtown East rebuilding, all he has to do is say: You can now put up larger structures, period — no strings attached.
Instead, he’s forcing developers to cough up big bucks on top of what are already the country’s highest construction costs — chiefly through something called a District Improvement Bonus, proceeds from which will go into a Pandora’s Box to fund future mayors’ political whims.
The city wants the dough to remedy such horrible “pedestrian realm challenges” as “narrow sidewalks and bottlenecks in subway stations.” Hello, slush fund?
The rezoning sounds good. In 78 blocks between 39th and 57th streets, new buildings could have up to 60 percent more floor space, depending on the exact location. (The plan is slated for a City Council vote early next year.)
But look at the catches:
* It won’t kick in until 2017. If change is as urgently needed as the city claims, why let East Midtown’s lousy buildings rot for five more years? Supposedly, the reason is so their redevelopment won’t conflict with the city’s Hudson Yards dream, but the areas are so different and remote that real-estate insiders say they’re not in competition.
* Although the rezoning is supposed to “streamline” things, the largest new buildings — the ones developers will most want to put up — still must undergo the city’s infamous land-use review procedure, a guarantee of delay and litigation. Maximum-size projects must also undergo micro-scrutiny over design and skyline impact.
* Worst of all, developers must kick back to the city to exercise their “right” to build larger. That’s what the DIB would be for.
In theory, in a tightly-drawn zone around Grand Central Terminal itself, builders can also buy some air rights from owners of a few nearby designated landmarks. But even there, they first must pay for a significant amount of their additional floor space in the form of a DIB before buying any private air rights.
And why would a developer choose the second option at all? The city mapped the zone in which private-development rights can be sold to cut out two properties that own big bundles of “air” — St. Patrick’s Cathedral and St. Bartholomew’s Episcopal Church.
That left one real-estate company, Argent Ventures, with 95 percent of saleable rights. With no meaningful private competition, Argent is said to want $500 a square foot.
But real-estate insiders expect the city to charge between $200 and $250 per square foot. That translates into shelling out from $20 million to $25 million to add just three floors of around 35,000 square feet each.
The pay-to-play scheme will do little to free Midtown East from its mid-20th century straitjacket. Bloomberg, who productively rezoned much of the city, waited too long to tackle the most important area of all — and then reduced an engine of renewal to a boondoggle machine.