The Real Deal New York

City, union seek limit on hotels in rezoned Midtown East

Plan would require new lodging in rezoned area to go through special permit process
June 18, 2014 02:15PM

The city has written a limit on hotel development into its proposal to rezone five blocks near Grand Central. The proposed cap could help win support from the powerful hotel workers union and lawmakers.

Under the new rule, the City Planning Commission and City Council would have to grant a special permit for any hotel in the proposed rezoning area, Reports The Wall Street Journal. The permit approval process would make it more difficult to build hotels in the area.

City officials fear that new hotels in the area will undercut the goal of the Midtown East rezoning plan: adding office stock in New York. The Hotel Trades Council opposes new hotel construction because greater supply could push down room rates and ultimately suppress wages, according to the Journal.

Opposition from the union contributed to Mayor Michael Bloomberg’s inability to mobilize support for a broader 73-block Midtown East rezoning last year. Shortly before withdrawing his proposal, Bloomberg offered the union a concession that would compel hotel operators to hire organized workers within the rezoned area, Crain’s reported. [WSJ]Tom DiChristopher