In hotel-condo debate, weighing tourism vs. industry

For now, hotel-condos are not permitted in manufacturing zones in Manhattan, but Donald Trump is betting the city will reconsider its zoning restrictions.

Hotel-condos, which allow people to buy rooms and live there part-time, are popular in the rest of the country but have made few inroads in the Big Apple.

In New York, only traditional hotels are permitted in manufacturing zones, such as the West 30s, an area where many projects are under construction. Residential projects aren’t allowed in manufacturing zones at all.

While the city’s manufacturing base is shrinking, tourists visiting New York City generate billions of dollars a year. Because many of these visitors have a hard time finding a place to stay given the city’s high hotel occupancy levels, insiders say a look at the city’s land-use policies is long overdue.

The Trump Organization has stepped to the front line of a pitched battle with the first hotel-condo planned for an area zoned for manufacturing, a 45-story tower at 246 Spring Street.

Critics say the Trump Soho Hotel Condominium New York will be more of a condo than a hotel. If the city approves a permit for the hotel-condo, it will set a precedent for allowing partially residential properties in non-residential zoning. Trump would not comment on the project.

While a permit was denied last month for the third time, excavation is under way despite a brief stoppage when human remains were discovered at the building site.

Some say that more allowances for quasi-residential development in manufacturing zones would be good for the city’s economy.

“The issue is bigger than Trump,” said Mark Levine, a real estate attorney with the law firm of Herrick, Feinstein. “The tourist industry generates close to $40 billion a year. In order to continue this part of the economy, there needs to be a variety of accommodations.”

According to Levine, the city is seeking to limit occupancy in return for permit approval.

“The city will find a way within zoning resolutions to describe what hotel-condos are and how they can be used to continue to meet market needs of an important segment of the city’s economy,” Levine said.

Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation, opposes the Trump project. He said the 45-story hotel-condo will push businesses out of manufacturing zones and encourage high-end high-rises in low-scale neighborhoods. If the city’s Department of Buildings issues the permit for 246 Spring Street, it will be circumventing the process without any sort of public review or vote, Berman said.

“They are negotiating a ‘restrictive declaration,’ which clearly shows they are going to give them a permit,” Berman said. “Manufacturing zones were not meant to be high-rise second homes for wealthy jetsetters.”

Mayor Michael Bloomberg recently announced an estimated 44 million visitors came to the city in 2006, exceeding the previous year’s 42.6 million and the 43 million projected at the beginning of last year. Those tourists are estimated to have spent $24 billion for the year.

All those tourists need a place to stay at night. With the occupancy rate for New York hotels at 90 percent, there is strong demand for more lodging, observers said.

It’s been more than 40 years since the city set the manufacturing and residential zoning for Manhattan. Times have changed since 1961, when the city’s manufacturing industry employed over 900,000 people; now the industry has leveled off at around 500,000 employees.

Currently, the 246 Spring Street hotel-condo proposal would allow individual units to be purchased for primary or secondary residency and rented out the when not in use. According to Jennifer Givner, a spokeswoman for the Department of Buildings, 246 Spring Street had already acquired a number of permits, but in order to receive the new building permit, it has to amend its plans to comply. Givner added that restrictive declarations are on a case-by-case basis.

New York City Council Speaker Christine Quinn voiced concerns that the Department of Buildings is pushing to make an exception for Trump. In a letter to residents of the area, she said, “the DOB is negotiating a ‘restrictive declaration’ with the developers that will specifically ensure that occupants may only stay in the hotel for a limited period of time.”

In another letter by Quinn, recommendations for owner occupancy restrictions included a maximum of 100 to 150 days of occupancy per year, a maximum of 29 to 30 consecutive days of occupancy, and a minimum of five to 10 days between maximum-length occupancy.

“Limiting the number of consecutive days per stay to fewer than 30 would prevent owner occupants from acquiring many tenants’ rights — preserving the integrity of the manufacturing zone,” Quinn said.

Current regulations define transient as a maximum occupancy of 30 consecutive days for residents. And practice dictates residential occupancy of a minimum of 180 days.

One feature that could improve the likelihood that the Trump Soho project will be approved is that the project’s plans lack a garbage chute and the units have no kitchens — implying the development will be more transient than residential.

It’s the gap from 31 to 179 days that leaves the city with a lack of clarity in terms of defining transient hotels and how they relate to hotel-condos, said Levine. With its decision on the Trump Soho Hotel Condo, the city will decide whether hotel-condos are residential or transient facilities, he added.

In what some see as an ironic turn of events, residents of the posh Trump building will be getting a 24-hour garbage garage only a few blocks away, proof that Manhattan’s industrial neighborhoods still haven’t entirely disappeared.

The Department of Sanitation proposes a new garage on a site bounded by Spring, Washington and West streets. According to the project description released last month, the new multi-story garage would operate all day, seven days a week.