Bob Knakal, chairman of New York Investment Sales at Cushman & Wakefield, is proposing a new bonus program that would allow Hudson Yards developers to purchase the right to build residential instead of commercial.
Under current zoning in the Hudson Yards area, most sites only allow developers to build about one-quarter of their total square footage as residential, while the rest must be dedicated to commercial use.
Knakal proposed the new rules in an op-ed in the New York Observer. He argued that many developers buying land in the area struggle to figure out the proper use for the required commercial space, because retail primarily works only at street-level, and office developers are hesitant to compete with those who secured space in the neighborhood years ago at lower land values.
Hotel use seems like the most logical for many developers, but with a massive influx of hotel rooms slated for the next few years, Knakal doubted that every new Hudson Yards building could sustain a successful hotel component.
“While I agree that the Yards will eventually be one of the most dynamic and exciting neighborhoods in the city, there may need to be some modifications to the zoning to allow for the maximum results from a development perspective,” Knakal wrote.
Under his suggested rules, developers would purchase the right to convert designated commercial space to residential, thereby buoying the goal of creating more residential affordability in the city, and also raising funds for the city to complete Phase 3 of the Hudson Yards development. [NYO] — Tess Hofmann