The Real Deal New York

Officials tout One Vanderbilt as model for Midtown East rezoning

SL Green held groundbreaking ceremony

October 18, 2016 04:00PM
By Kathryn Brenzel

One Vanderbilt groundbreaking and rendering

One Vanderbilt groundbreaking and rendering

Before tenants can move to the upper floors of SL Green Realty’s One Vanderbilt, the developer must deliver on its promise to make $220 million worth of public infrastructure improvements.

At a ceremonial groundbreaking for the project held Tuesday, Mayor Bill de Blasio cited this condition as one of the many reasons the planned 1.7 million- square-foot office tower is the “right kind” of development. The developer must complete a new train hall in Grand Central Terminal at 43rd Street, a pedestrian plaza on Vanderbilt Avenue, create additional access points to the Nos. 4,5,6 and 7 Subway lines and make other improvements before the building’s top tenants can move in, according to the mayor.

One Vanderbilt groundbreaking

Officials and real estate executives at a groundbreaking ceremony for One Vanderbilt

“This development is a great template,” de Blasio said. “We asked asked a lot of tough questions and made a lot of demands of the developer.”

The building’s only known tenant — thus far — is TD Bank, which is taking 200,000 square feet for retail and office space (though it’s not clear what floors it will be taking for the office).

City officials at the groundbreaking touted the project — which will rise 1,401 square feet high — as an important model for the future rezoning of Midtown East. Manhattan Borough President Gale Brewer said the discussions with SL Green TRData LogoTINY “set the bar very high” for future development in the neighborhood.

The city’s Midtown East rezoning proposal takes a similar approach in encouraging public improvements in exchange for development perks. Under the proposal, certain developers seeking to build out their properties beyond current zoning rules will need to contribute a yet-to-be determined amount to improvements identified by the Metropolitan Transportation Authority. Other developers will need to purchase air rights from landmarked buildings in the district, and a portion of the sales proceeds will be dedicated to public improvements. The city council approved rezoning the “Vanderbilt Corridor” in May, allowing SL Green to construct a bigger tower.

The larger Midtown East rezoning is aimed at encouraging the replacement of the neighborhood’s aging office stock with new Class A office space. Before the rezoning, Councilman Dan Garodnick said on Tuesday, Vanderbilt Avenue looked more like a “back alley than a vibrant business district.”

The groundbreaking followed a few recent victories for SL Green. The REIT settled a lawsuit in August filed by Grand Central Terminal’s then-owner, Andrew Penson. A month later the REIT closed on a $1.5 billion construction loan from a consortium of banks, with Wells Fargo leading the syndicate.

Tuesday’s event was capped with the “ground breaking,” high above actual excavation work at the site. The ceremonial dirt throwers included, among others, SL Green CEO Marc Holliday, Garodnick, de Blasio, Brewer and Real Estate Board of New York president John Banks.

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