Bloomberg withdraws Midtown East proposal on eve of vote

Midtown East (Inset: Michael Bloomberg)
Midtown East (Inset: Michael Bloomberg)

UPDATED, 9:48 p.m., Nov. 12: Just before the City Council vote slated for this week, Mayor Michael Bloomberg withdrew his application today for the controversial 73-block Midtown East rezoning, citing an absence of backing from legislators.

“This will unfortunately cost the area hundreds of millions of dollars in badly needed subway and street improvements and $1 billion in additional tax revenue – as well as tens of thousands of new jobs that would have been created,” Bloomberg said in a statement.

Steven Spinola, president of the Real Estate Board of New York, echoed Bloomberg’s regret over the forfeited jobs and new infrastructure. “We are obviously disappointed in this decision,” he said in a statement.

The City Planning Commission approved the plan by a vote of 11-0 in September. The rezoning sought to allow for taller skyscrapers in the neighborhood. But residents, local leaders and politicians pointed to potential issues with overcrowded subways and streets, landmark preservation, ugly high-rises, affordability, and light and air density, as previously reported.

Council member Dan Garodnick and Council Speaker Christine Quinn revealed today that they planned to vote against it, effectively killing the proposal.

“Creating new jobs in East Midtown — and across all of New York City — is essential,” Garodnick and Quinn said in a joint statement, cited by Capital New York. “We can and should do more with the commercial corridor around Grand Central. … However, a good idea alone is not enough to justify action today. We should rezone East Midtown, but only when we can do so properly. After extensive negotiations, we have been unable to reach agreement on a number of issues in the proposed plan.”

Sign Up for the undefined Newsletter

The rezoning is important for the industry, Seth Pinsky, former chief of the New York City Economic Development Corporation, told The Real Deal earlier this week when the proposal still seemed viable.

“It’s going to be impossible for us to maintain our standing as one of the world’s leading business centers if we’re not updating our inventory,” said Pinsky, who recently took a position with RXR Realty.

The rezoning, however, may still have a future, albeit in an altered form. Mayor-elect Bill de Blasio expressed interest in the project, but said the time is not now.

“I applaud the City Council for pressing the pause button in order to ensure these concerns are adequately addressed,” de Blasio said in a statement today. “We must continue this process in earnest upon taking office, and I commit to presenting a revised rezoning plan for the area by the end of 2014.”

However, it’s unclear what kind of impact this delay will have on the viability of the rezoning.

“Deferring Midtown East will send a bad signal to the market,” Pinsky said. “Even if this were a priority for the de Blasio administration, it would have to begin a very long march forward and so likely wouldn’t actually come to fruition for quite some time.

“Once you start reopening the issue, it’s likely it would go through substantial change,” he added. “It’s very hard to predict whether, once you start moving the pieces around, it would end up being successful or not.”