The Real Deal New York

No more rubber stamps: City Council is pickier about rezoning

Panelists discussed 100-year anniversary of zoning code

November 30, 2016 02:10PM
By Kathryn Brenzel

From left: Andrew Kimball, Vicki Been, Ron Moelis and David Greenfield

Industry City, where the Brooklyn Nets just opened a new training facility, may seem like an ideal spot for a sporting goods shop, but developers of the 16-building complex can’t yet capitalize on their new tenant when it comes to retail.

“At the base of the building, we can’t do a Dick’s Sporting Goods store. Why? Because under the 1960s zoning, you can do hard goods: You can do baseball bats. But you can’t do soft goods: baseball mitts,” Andrew Kimball, CEO of Industry City, said during a panel on Wednesday. “Doesn’t make a lot of sense.”

Industry City’s team of developers — Jamestown, Belvedere Capital and Angelo, Gordon & Co. — is seeking a rezoning of the Brooklyn building complex, most of which is restricted to heavy manufacturing uses.  The team has proposed a “special innovation zoning district” that would allow for two hotels, 600,000 square feet of academic space and retail. Kimball said rezoning could significantly speed up the $1 billion project.

“It’s going to take 25 years to get to our 16 buildings on 35 acres, but with a little bit of zoning flexibility, we can do it all in 10 years,” he said.

Kimball was one of four panelists at the New York Law School on Wednesday who discussed the city’s current zoning law and its future. Mayor Bill de Blasio’s Mandatory Inclusionary Housing (MIH) program was one of the biggest changes in how the city — and in turn, developers — handles zoning. In April, the City Council approved the rezoning of Brooklyn’s East New York neighborhood under the program, but other proposals in Inwood and Sunnyside have fallen flat, primarily due to lack of council support and community backlash.

“The good old days of the council rubber stamping projects are over, and I know developers don’t like to hear that but that’s just the reality,” City Council member David Greenfield said during the panel. “A lot more developers are turning to rezoning, and they come in and say, ‘Well, hold on, I’ve done this as-of-right, and I’m a really great person, and I’m building a big building that’s providing tax revenue, that’s providing jobs. Why isn’t that good enough? And the answer it’s not good enough. It’s good, but it’s not good enough.”

Greenfield, who chairs the city’s land use committee and wields considerable influence, said that rezoning proposals present a valuable opportunity to discuss the interests of communities, like East New York, that often go ignored. He also noted, however, that updating the city’s zoning code — a process that can take two to three years — is quickly outpaced by the ever-fluctuating real estate market.

“As soon as you print the newest edition or the newest zoning resolution or the newest change, essentially, it becomes outdated,” he said. “If you screw up the zoning, it’s probably going to have an impact on the next 50 to 100 years.”

Vicki Been, commissioner of the city’s Department of Housing Preservation and Development, noted the importance of the Zoning for Quality and Affordability (ZQA) text amendment that passed in March. She said the change allowed the city to reduce parking requirements in areas rich in mass transit options, making more room for affordable housing units. She cited Foxy Management’s planned senior housing complex in the West Bronx, which was able to bump up its unit count from 133 to 168 due to ZQA.

Ron Moelis, CEO and chairman of L+M Development Partners, agreed that the cost impact of parking requirements was dramatic in terms of unit count and design. As one of the top affordable housing developers in the city, Moelis is no stranger to MIH and ZQA. In fact, the City Council on Tuesday approved a plan to rezone a lot in East Harlem that will allow L+M and Tahl Propp Equities to develop a 400-unit apartment building at Lexington Avenue between 107th and 108th streets. The project is 100 percent affordable and fits its business model. But not all prospective projects warrant a rezoning, he said.

“There needs to be some sensitivity from the development community as well that not everything should or can be rezoned,” Moelis said. “It’s time consuming, it’s expensive and it’s grueling. There needs to be give and take in all these processes.”

The panel’s moderator, Ross Moskowitz, a partner at Stroock & Stroock & Lavan, rounded out the event by asking if the panelists thought 421a would be revived. A revised version of the tax break — often billed as a necessity for de Blasio’s affordable housing initiative — is expected to possibly go before the state Legislature next year (since a special session seems increasingly unlikely). All the panelists answered yes, except Been, who said “eventually.”

Correction: An earlier version of this story misstated the square footage of the academic space planned for Industry City. It’s 600,000 square feet.

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