City drops bid to require special permits for Union Square hotels

Officials double down on a possible application citywide

Union Square and Mayor Bill de Blasio (Getty)
Union Square and Mayor Bill de Blasio (Getty)

The de Blasio administration is abandoning its plan to require special permits for new hotel construction in Union Square — but it remains committed to studying whether such a mandate would work citywide.

The city quietly withdrew an application to establish a 25-block area where any new hotel construction requires a special permit. The decision came at the urging of the City Council.

“The Commission approved this application just before the full impact of Covid and the citywide lockdown,” councilmember Francisco Moya, who chairs the body’s zoning subcommittee, said in a letter to Marisa Lago, the director of the Department of City Planning. “As we all know, the policy landscape has changed profoundly in the last seven months, and we believe it’s important to evaluate our efforts in a citywide context with respect to the regulation of hotels.”

Joseph Marvilli, a spokesperson for DCP, said that based on conversations with the City Council, the agency withdrew its application.

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“Evaluating our efforts on the regulation of hotels in a citywide context will help us craft a more responsive proposal to this new environment,” he said.

As part of broader rezonings, special permits for new hotels are now mandated in Midtown East and the Garment District. Since 2018, developers in light manufacturing zones have also had to obtain special permits.

Last year, the mayor asked DCP to study the feasibility of implementing the mandate citywide. Officials previously confirmed that the pandemic has not deterred the mayor’s support for the study, and the latest statement from DCP indicates that officials see the last eight months as further affirmation that citywide regulation may be necessary. It isn’t exactly clear, however, what that would entail.

The city’s hotels have seen occupancy rates plummet, and some have been forced to permanently close their doors. Last month, hotel occupancy in the city was less than 40 percent, according to data provider STR. According to the Financial Times, 80 percent of the city’s hotels that are backed by CMBS are showing signs of distress.

Erik Engquist contributed reporting.