Rezoning failures? Is DeBlasio's Clout Gone?

David Goldsmith

All Powerful Moderator
Staff member

Will Gowanus be the next botched rezoning?
Mayor, local council member may be gone before vote on neighborhood revamp

Determined to avoid the divisive controversies that plague neighborhood rezonings, Brad Lander has spent years trying to build consensus for what Gowanus should become. Mayor Bill de Blasio, who preceded Lander as the area’s City Council member, was on board, directing city planners to add housing to the low-slung former industrial hotbed.
But now, with real estate worth hundreds of millions of dollars hanging in the balance, the two men are running out of time: They must leave their seats next year, and the rezoning process — stalled by the coronavirus pandemic — has a ways to go before it can begin the seven-month public review.

“If we don’t move forward on it at some point in the next few months, it won’t be able to be achieved in this term,” Lander recently told City Limits. “My term ends in a year and a half, and the mayor’s does, too. And so if we don’t move forward in the next couple of months, that means this will not happen.”

Gowanus was shaping up to be the last major rezoning of the de Blasio administration, and if the pandemic ends up torpedoing it, it would mark the latest in a string of zoning setbacks.
South Bronx Council member Rafael Salamanca effectively ended de Blasio’s effort to rezone Southern Boulevard when he announced his opposition to it in January.

The administration’s effort to rezone 300 blocks of Bushwick also hit a wall that month when local Council member Antonio Reynoso came out against it. Both politicians cited gentrification fears.
And although the mayor did get its Inwood rezoning through the City Council, a state judge annulled it in December, saying the potential socioeconomic consequences had not been examined enough. The city’s appeal could be heard next month.

The Gowanus rezoning was experiencing pushback as well, with residents demanding the city invest more in public housing and expressing concern about bringing 20- and 30-story buildings into the neighborhood. And Lander, whose vote would determine the fate of the rezoning, did not have the luxury of dismissing critics because he is running for city comptroller.

However, it was still widely seen as a fairly safe bet to pass. Lander, who once ran a nonprofit housing builder, sees the rezoning as a way to add affordable apartments and manage the growth of Gowanus in a broadly beneficial way. It would also be an accomplishment to tout on the campaign trail in his citywide race. Developers see a chance to build in a gentrifying area between pricey enclaves Park Slope and Carroll Gardens.

Then the coronavirus pandemic brought city life — including zoning reviews — to a near halt. And while some have started advocating to resume the process, known as Ulurp, the administration has been quiet on the matter.
“There’s no update at the moment on the Gowanus Neighborhood Plan,” the Department of City Planning said in a statement. “Per the mayor’s executive order, Ulurp remains suspended. Any next steps for the Gowanus proposal will be shared with the community and on our website.”
 

David Goldsmith

All Powerful Moderator
Staff member
What a toothless de Blasio means for real estate
Developers pull back as mayor’s political capital has been “obliterated”


“The most charitable assessment,” Neal Kwatra said of Mayor Bill de Blasio last week, “is that his mayoralty is currently on life support.”
The remark, made to the New York Times, was devastating not just for what it said but for who said it. Kwatra is a Democratic strategist steeped in New York politics who has worked for de Blasio and whose most important client, the Hotel Trades Council, is a de Blasio ally.

That Kwatra had reasons to downplay de Blasio’s problems but chose not to illustrates the magnitude of the moment. Police-reform backers were first galvanized by the killing of George Floyd, then infuriated by the mayor for defending the NYPD as it pummeled, pepper-sprayed and arrested protesters. The damage to de Blasio’s political capital was severe because the reformers were his base, leaving him with no clear constituency.
That’s bad news for real estate, industry insiders say.
“Developers are nervous,” said George Arzt, a publicist and political operative whose clients include Extell Development, Gilbane and Lendlease. Some are refraining from taking projects through the rezoning process, he said, “because they’re unsure of the politics in this city [and] unsure of the clout of the mayor, especially as he heads toward his lame-duck year.”
Others were even less generous.
“His political capital being completely obliterated certainly doesn’t help the real estate wheels go forward,” said one representative of a major developer, speaking anonymously because the firm has business before the city.
And development was not a priority for de Blasio in the first place, the source added.

The mayor’s office did not respond to a request for comment.
Indeed, de Blasio’s political demise dashes any hopes that he might rescue his housing plan, which began in 2014 with the goal of adding hundreds of thousands of market-rate dwellings, as well as 80,000 income-restricted ones. It hinged on $8 billion in subsidies and neighborhood rezonings that increased density, sparing developers from trudging through the city’s land-use review process for every large project.
The rezonings lost momentum first. Individual Council members in the South Bronx and northern Brooklyn claimed – in defiance of the laws of economics – that adding supply would increase rents. The mayor gave the members a pass, rather than call them out and risk his standing with their constituents.
That was an example of the lack of “leadership” that his former deputy mayor Alicia Glen, the architect of his housing plan, referred to repeatedly during a June 3 TRD webinar, albeit without mentioning de Blasio by name.
Then the subsidies vanished, a victim of pandemic-related, de Blasio-proposed budget cuts that Glen called “one of the most short-sighted things I’ve ever seen,” because the funding would leverage much more money from private sources. But given the mayor’s vulnerability, the council could pressure him into restoring some of those funds by making agency cuts elsewhere. The budget is due this month.
One neighborhood rezoning, of Gowanus, is still likely to pass because it is supported by the local City Council member, Brad Lander. But Lander now has even more power to dictate its terms, given that the public sees him as a champion of the protests. There are rumblings that the northern Brooklyn rezoning could re-emerge, but again, de Blasio would be subject to the whims of the local Council member, Antonio Reynoso.

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Normally, a mayor could use his administrative power, bully pulpit and control of funding to sway local lawmakers.
“There’s a lot of leverage that the mayor has in ordinary times,” said Arzt. “These are not ordinary times.”
Early in his tenure, de Blasio pushed major development initiatives through the council, notably Mandatory Inclusionary Housing, which depended on future rezonings to spur projects. Some rezonings were approved after the mayor promised hundreds of millions of dollars in community benefits. But his influence has been diminishing in recent years, and the pandemic has cost him $9 billion in tax revenue. Then last week happened.
By imposing a curfew in response to one night of looting, the mayor created the conditions for unjustified arrests and conflicts with peaceful protesters, largely from his base of African-Americans and white liberals. And when the police engaged in troubling actions that were amplified on social media, the mayor acknowledged only a few such incidents and continued to profess that his police were showing “restraint” and a “light touch.”
Six years of progress in police-community relations were undone in six nights.
His now-former supporters called for him to resign, despite his decision to kill the curfew a night early. It didn’t help that de Blasio deemed the curfew a success, drawing outrage from City Council Speaker Corey Johnson.
“Protests against police brutality were met with more police brutality,” Johnson said in a searing statement Sunday. “The results were predictable. The mayor and the NYPD doubled down on a flawed strategy, falsely conflating looters with protesters and imposing a misguided curfew.”
“The mayor and the NYPD doubled down on a flawed strategy, falsely conflating looters with protesters and imposing a misguided curfew” — City Council Speaker Corey Johnson
Council member Kalman Yeger said the mayor was already in a weak position with only 19 months left in his term. “This is typical of mayors in year seven of an eight-year term,” the Brooklyn Democrat said, recalling that Rudy Giuliani and Michael Bloomberg were not popular at the same stage. “But he’s still the mayor.”

De Blasio certainly retains administrative powers important to the industry, such as measures that require the Department of City Planning. If he wants to permanently devote a traffic lane to buses, as he just did on 14th Street, his transportation agency can do so unilaterally. (Some believe traffic calming helps residential property values.)
But Johnson’s City Council has been increasingly successful in pushing the mayor into such actions. It pressured him to rent more hotel rooms and close dozens of streets to traffic to facilitate social distancing. Johnson also demanded outdoor dining, and the mayor responded with an initiative that restaurants could employ as soon as June 22. In his latest concession, the mayor abandoned his proposed increase to the NYPD budget and vowed to divert some police funding to youth services, as Johnson demanded it.
And that was before the mayor — who has long been unpopular with ethnic whites, as political consultants call the predominant populations of Staten Island, southern Brooklyn and eastern Queens — alienated his last bastion of support with the curfew fiasco.
An aide to another big developer said the mayor’s loss of influence “creates a massive power vacuum in the city. That vacuum will be filled by the governor.” And Gov. Andrew Cuomo, the aide noted, is “is less reactive and more thoughtful on real estate issues than the mayor.”
Real estate insiders hope that de Blasio could still advance projects to help the city recover from the coronavirus shutdown.
“What’s more important to his legacy?” said Ken Fisher, a land-use attorney at Cozen O’Connor and former City Council member. “That he doesn’t get remembered as a gentrifier or that he’s remembered for leveraging real estate and construction for a swifter recovery and giving confidence in New York’s future?”
Johnson, too, will be motivated to amp up his development credentials, given that he’s running for mayor in 2021.
“In the next 18 months, he needs to build a track record on economic recovery,” noted the developer’s representative. “Having projects killed in the City Council under his watch during skyrocketing unemployment and severe fiscal strain is not a good look. There’s hope that Corey will adopt a pro-growth approach.”
“The legislature, City Council and governor are going to govern around him now. They won’t deal with de Blasio because they don’t need to.” — veteran Democratic operative
Johnson has gained from de Blasio’s fall from grace. Moreover, dozens of current Council members are term-limited and may be hoping for jobs in a Johnson administration, which could give him leverage with those who have big rezonings pending before them, such as Industry City’s in the Sunset Park district of Carlos Menchaca.

“Bill de Blasio is impotent now and a lame duck for all intents and purposes,” the operative said. “The [state] legislature, City Council and governor are going to govern around him now. They won’t deal with de Blasio because they don’t need to.”
 

David Goldsmith

All Powerful Moderator
Staff member
Inwood rezoning upheld by court
Appellate panel ruled unanimously to reverse decision to nullify rezoning

In a 5-0 decision, an appellate court reinstated the city’s rezoning of Inwood, reversing a lower court’s December ruling and delivering a key victory to developers and the de Blasio administration.
The five-judge panel ruled that the City Council “acted properly, and consistently” in approving the Manhattan neighborhood’s rezoning, according to a decision posted Thursday. Moreover, it endorsed the city’s rationale for the change: that the paucity of Inwood’s housing construction had pushed rents up by limiting the supply of apartments as the neighborhood became attractive to more New Yorkers.


“Under the proposed rezoning, various protections would be instituted to assuage the housing squeeze that Inwood residents were experiencing and would continue to experience without any intervention,” the panel wrote in its decision. “Thus, the planned rezoning and new residential developments would likely improve the rental situation, or at least ease the rent pressures that were already in effect.”

The City Council in August 2018 approved Inwood’s rezoning, which was projected to add 5,000 units of affordable housing and bring $200 million in city funds to the neighborhood. But in December, New York Supreme Court Justice Verna Saunders nullified the rezoning, ruling in favor of neighborhood groups that argued the city should have forecast the policy’s socioeconomic impacts. The city appealed, with developers filing an amicus brief.

“Today’s decision means public and private investments in affordable housing, parks, a new library and other neighborhood infrastructure for Inwood will move forward,” Taconic Investment Partner co-CEO Charles Bendit said in a statement. His company plans to build a 700-unit housing project at 410 207th Street, and another residential development at 4790 Broadway that includes a new library.

“But this case was always bigger than Inwood, and the ruling paves the way for exactly the sort of investments in affordable housing and other essential community benefits across the city that are needed as we work to recover from the current public health and economic crisis,” he said.

In their ruling, the appellate court justices noted that they understood the “desire to require the City to explore the potential impacts on racial and ethnic groups,” but the current land-use review process doesn’t mandate such analysis.
“The petitioners raise important issues of equity, but this case was not the place for them to be resolved,” the city’s Corporation Counsel James Johnson, said in a statement. “It is an important moment to move forward and dramatically address a housing shortage that overwhelms many families in this city.”

A hearing last month raised concern among some developers when Justice Rosalyn Richter said that members of the appeals panel were concerned that the city does not study the potential racial impact of land-use actions. Joy Construction’s Eli Weiss said his company and partner Maddd Equities would likely scrap plans for a 611-apartment building at 3875 Ninth Avenue if it seemed the rezoning would take years to resolve.

The unanimous decision makes it more difficult for Northern Manhattan is Not for Sale, the coalition opposing the rezoning, to appeal to the state’s high court, because the group must get permission from the court to do so.
A representative for the group was not available to comment.

Weiss, who was considering doing an industrial project as a fallback if his site were not rezoned for residential use, was ebullient at the turn of events.
“It proves two things: The rezoning was done properly from the get-go, and from a public policy point of view, that affordable housing and economic development are crucial to the city’s future,” he said.

The builder added, “This is the first time in the pandemic that I feel happy.”
 

David Goldsmith

All Powerful Moderator
Staff member
Industry City rezoning is effectively dead
Council member Menchaca says he will oppose the campus owners’ application

Plans to rezone Industry City are, once again, dead on arrival — should the developer decide to move forward.
Brooklyn Council member Carlos Menchaca said in an Instagram video posted Tuesday that he “strongly opposes” the rezoning. Under City Council custom, as the local member, he has the power to make or break the proposal.

“I made it very clear that I would not support Industry City’s rezoning unless certain conditions were met. Those conditions were not met,” Menchaca said, likely referring in part to the developers’ failure to remove hotels from the application. “Industry City’s rezoning will make it more difficult for working people to live in Sunset Park. And our city’s land use process? Well, it favors corporate developers as they profit off the displacement of working-class workers.”

Representatives for the development team — a partnership between Jamestown, Belvedere Capital, Cammeby’s International and Angelo, Gordon & Co. — had told Politico New York on Monday that it was considering pulling its $1 billion rezoning plans because of “a number of convergent factors” — that the concessions Menchaca was seeking were too steep and that the industrial campus is proving to be attractive to tenants under the current zoning.

But it is still unclear whether the application will be pulled, Lee Silberstein, a spokesperson for the developers, told The Real Deal Tuesday. Citing the economic downturn caused by the pandemic, he said, “Often, in times of great crisis, great leaders emerge. We are hoping that will be the case in our effort to work with city leaders to fully implement a plan to create 20,000 jobs and generate hundreds of millions of dollars in taxes.”

Silberstein may have been expressing hope that City Council Speaker Corey Johnson would negotiate a rezoning and marshall support from Menchaca’s colleagues to approve it.
Traditionally, the local member’s position decides the fate of a rezoning as the other 50 members fall in line, in order to be afforded that same power on applications in their own districts. But on rare occasions, a speaker will override that, generally on matters that affect areas beyond the local member’s district.

Menchaca clearly expects to decide the fate of Industry City’s rezoning application. In March 2019, citing concerns over displacement and gentrification in Sunset Park, Menchaca warned that the application would be “dead on arrival” if the development team did not delay entering Ulurp.

Back in September, after delaying the process, Menchaca said the rezoning application could proceed if the development team made certain concessions. The application to rezone the 35-acre complex, which would allow for more retail, academic space and offices, as well as a pair of hotels, at the Third Avenue site, began the city’s seven-month land-use review process in October. Due to the coronavirus, the process has been halted since March and is expected to restart in September.

Since entering Ulurp, the application faced opposition from local community boards, while Brooklyn Borough President Eric Adams supported certain aspects of the rezoning and opposed others. In a March letter to City Planning, Adams notes that Menchaca would lend his support to the rezoning only if hotels were removed from the application. Though Industry City CEO Andrew Kimball agreed to this condition, according to Adams, hotels remained part of the application.

For “technical, procedural” reasons, Silberstein said the plan was to remove hotels from the proposal once it moved to the City Council.
Typically, contentious negotiations between developers and the local member are decided at the end of the seven-month process, just before the vote. It is exceedingly rare for a member to declare an application dead midway through.
 

David Goldsmith

All Powerful Moderator
Staff member
Biz, labor call on Corey Johnson to save Industry City rezoning
Momentum for $1B plan after local Council member Carlos Menchaca opposes it

Organized labor and business leaders are pushing City Council Speaker Corey Johnson, who is expected to run for mayor, to save the controversial rezoning of Industry City.
In a letter to Johson, representatives from 17 groups, including the Real Estate Board of New York, the Building & Construction Trades Council of Greater New York and 32BJ SEIU, urged support of the rezoning, pointing to the project’s promised delivery of 20,000 new jobs. The proposal has met resistance from Sunset Park’s local Council member Carlos Menchaca.

“Industry City represents a model for the type of privately financed, sustainable development that the City Council must encourage in the post-pandemic era, when government resources are severely limited and the need for new job creation is enormous,” the letter states.

The letter indicates that the Industry City developers have won support from key labor groups in the city. Mayoral candidates traditionally vie for support from these groups, a fact that is not lost on Johnson, who is expected to run in the 2021 election.
Proponents of the rezoning already got a boost this month when Council members Ritchie Torres and Donovan Richards penned an op-ed in the New York Daily News arguing that an exception be made to the council’s tradition of member deference, in which the 51-member chamber parrots the local council member’s vote on land use decisions. A third member, Robert Cornegy Jr., then penned a similar op-ed, and Mayor Bill de Blasio, when asked about the project, said member deference is not a hard-and-fast rule.

Last week, Menchaca sent a letter to his colleagues urging them to vote against the rezoning. He criticized de Blasio for failing to fund affordable housing in Sunset Park as a condition of the rezoning.

He also noted that while Industry City developers agreed to eliminate hotels from their proposal to rezone the 35-acre campus and signed a community benefits agreement with Sunset Park residents, city law does not require them to abide by these pledges.

“There is nothing in the zoning laws that obligates landowners to deliver on any of the plans they offer,” he wrote. “This distinction between plans and their accountability is critical. Accountability is what separates serious projects from gambles on our constituents’ homes, jobs, and lives.”

In a separate letter released Monday, the Citizens Budget Commission announced that it is launching an “in-depth” study of the city’s Uniform Land Use Review Procedure, or Ulurp. President Andrew Rein said the group is concerned that at times the process “serves as an impediment, rather than as an instrument of improvement, to proposals needed to spur job creation and develop desperately-needed housing.”

“In its determination, the Council should carefully consider how best to balance community needs with citywide interests, which include the potential for job creation with no direct public investment required,” Rein’s letter states, referring to Industry City.

Unlike the Amazon campus proposal for Long Island City that was withdrawn last year, the Industry City plan does not call for subsidies. However, some Sunset Park residents fear it will trigger gentrification and they will not get any of the jobs Industry City creates.

The City Planning Commission is scheduled to vote on the rezoning Wednesday. The proposal then moves on to the City Council.
 

David Goldsmith

All Powerful Moderator
Staff member

DeBlasio recedes from development agenda as pandemic response consumes City Hall

A motley crew of New York City real estate executives with big plans for the Queens waterfront were frustrated but resolute.
After Amazon canceled a deal to build a campus on the site last year, the development team drew up a blueprint for housing, retail, schools and open space on a sprawling parcel in one of the trendiest areas of the city.
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Negotiations with Mayor Bill de Blasio’s team were inching along, and the developers had hoped to begin a public review process after the summer. But tensions flared when City Hall demanded they cover all infrastructure costs, including off-site investments developers contended were not their responsibility. After administration officials informed the group on a Zoom call in June that they would have to pay $75 million to relocate a municipal building on the site, talks fell apart, according to several sources involved in the negotiations. On Thursday the administration officially announced its opposition to the proposal.
Now, the fate of one of the city’s most lucrative swaths of undeveloped land is as uncertain as it was after Amazon’s dramatic departure.
Even in the high-octane world of real estate, where egos and money often clash with public policy, the episode surprised participants and underscored a shift in de Blasio’s attitude toward growth as he winds down his mayoralty. After six years pushing pro-development initiatives, anchored by his signature affordable housing plan, de Blasio had been quietly receding from that agenda before the coronavirus pandemic bulldozed projects across the city.
In addition to his reticence on Long Island City, which is ground zero for an anti-development political movement, the mayor has slowed his own plans to support private housing on land owned by the cash-strapped New York City Housing Authority. He has yet to begin a rezoning process for the Gowanus section of Brooklyn — an idea that has been bandied about since 2014 — to enable some 8,000 new apartments. And last week he basically acknowledged his 2016 pledge to support the creation of a streetcar connecting Brooklyn and Queens would not come together on his watch.
It was against this backdrop that de Blasio slashed capital funding for affordable housing projects, halted the city’s public land use process and redirected his economic development agency to work on medical supply procurement when Covid-19 hit the city in March and threatened the city's booming finances.
“It’s pretty clear to me that the administration has not prioritized development of their affordable, mixed-income housing or projects in neighborhoods that are about building a diverse, inclusive economy,” Alicia Glen, de Blasio’s previous deputy mayor for housing and economic development, said in a recent interview. “And that’s a shame, because if you want to be the most inclusive and progressive city in the country, you need to be growing and actually building into that vision.”
“Status quo means going backwards,” she added.
In more than 20 interviews with politicians, builders and administration officials, a picture emerged of a mayor worn down by community opposition to development, gun-shy from the Amazon debacle and preoccupied with the enormous crisis facing the city. Meetings are postponed; calls go unreturned; direction from city agencies is confusing, they say. A few people pointed out de Blasio is not running for office, further limiting his face time with real estate executives who funded his prior campaigns.
“It seems like the mayor’s office has decided not to weigh in on major economic development projects and has backed away from the original intent of rezoning multiple neighborhoods throughout the city,” David Greenfield, the City Council land use chair during de Blasio’s first term, said in a recent interview. “It’s both unfortunate and surprising because he’s really given up the ability to shape what the future of the city will physically look like for the next generation.”
The administration cut its housing capital budget by more than $583 million this year, according to an analysis by the New York Housing Conference, an advocacy organization. The city, which had been spending more than $1 billion a year on affordable housing, is relying on alternate methods to underwrite the mayor’s goal of building and preserving 200,000 homes by 2022.
As he looked to limit in-person government functions, the mayor issued an executive order suspending the city’s public land use process on March 16, delaying the timeline for every project that needs government approval to move forward. The process is resuming later this month.
Yet before the budget cuts even took effect, housing production fell 28 percent: 6,503 new units were financed in the fiscal year that ended on June 30, compared to 9,141 the year before. At the same time, the city reported an increase in the number of affordable homes it paid to preserve, with about two-thirds of that progress stemming from a single deal in the Bronx.
Glen, who tangled with unions, activists and politicians during her tenure, criticized the lack of progress on plans to raise $2 billion for the public housing authority by leasing its undeveloped land to private developers. She and de Blasio rolled out that proposal in December of 2018 as part of a $24 billion turnaround strategy for the agency.
Vicki Been, Glen’s successor as deputy mayor, had hoped to move quickly on a plan to demolish and rebuild two dilapidated public housing buildings in Manhattan by monetizing the property’s unused land. But de Blasio hit the brakes last fall and convened a working group of residents and skeptical politicians to mollify community opposition.
Nearly a year later, Been said she is awaiting a report from the group.
In an hourlong interview over the weekend, the deputy mayor disputed that the administration’s housing agenda has been held back by anything other than Covid-19.
“The pandemic certainly slowed us down for a few months, but we used that time to really think about, what should the priorities be? How should we respond to the inequities that were laid bare by Covid, the inequities and injustices that were highlighted by the Black Lives Matter protests?” Been said.
Every agency under her purview underwent “an intense prioritization exercise” for de Blasio’s remaining 16 months in office, she said. “It’s pedal to the metal for all of my agencies, but the priorities have shifted,” Been said.
She said the administration is still on track to reach its overall affordable housing goal, but acknowledged it would require “a push with the months that we missed.”
“There’s this notion out there that because some of the capital money was moved to later years that we’re not doing anything,” she added. “Believe me, we are burning the midnight oil to get these things done and to move them forward.”
June is typically a popular month for the housing agency to close on its projects, but this year it sealed the deal on just 22 small projects, Been said.
The delays include Bronx Point, a mixed-use project that includes more than 500 rent-restricted apartments and a home for the Universal Hip-Hop Museum, and a small facility in Corona, Queens, for low-income seniors and people in a nearby drug treatment facility.
The 30-unit housing facility delayed its plans when the city put off releasing a $1.2 million interest-free loan.
“It was terribly, terribly disappointing,” MaryBeth McNerney Matta, a consultant who worked on the project, said in a recent interview. Corona was among the hardest-hit neighborhoods in the city.
“When this first happened I just thought to myself, this is all going to be okay because people have to be housed,” she said. “It took me weeks to get my arms around the shock of it, that housing — permanent housing — would not be at the absolutely very top of the list of things that needed to be tended to.”
Budget cuts and project delays have also impacted the city’s Economic Development Corporation, whose top staffers were redeployed to respond to the pandemic.
The city shifted nearly $1.3 billion from the agency’s capital budget into the years after de Blasio leaves office — a move Council Member Brad Lander warned would lead to job losses at a time of soaring unemployment.
“Even before Covid, we weren’t seeing a real strategic vision for the city’s economic development in a way that matches our goals for a more equal, more affordable and inclusively thriving city,” Lander, who is running for city comptroller, said in an interview. “Those issues have changed dramatically in the last few months, but they've been urgent for quite some time and I have not seen a strategic vision large enough to rise to the moment.”
Lander represents Brooklyn's Gowanus area, where developers and city officials have long considered a rezoning to allow more development. He said his support of the project, which is all but required for its passage, is contingent on the administration investing more money in nearby public housing complexes. Been called it a “major priority.”
She also said the administration is moving forward on stalled plans to redevelop Willets Point in Queens and indicated a long-term, complicated plan to build a mini city over a rail yard in Sunnyside is not an immediate priority.
As for the recent Long Island City dispute, she said the developers were not willing to cover some $500 million to fortify the surrounding area for a massive influx of people and activity.
They insisted the city was attempting to offload public costs onto them, including moving a city building that another party was contractually obligated to pay for, according to several people familiar with the failed negotiations.
“It’s just a sideshow,” Been said. “They’re just trying to distract from the broader point. … You can’t have three private developers coming in and asking for a huge, huge project and not paying their own way, and I made that clear from day one.”
The development team, which includes the chief of staff to former mayor Rudy Giuliani, the powerhouse builder behind the Barclays arena and a family-owned plastics packaging company, declined to respond.
Hal Fetner, who runs a Manhattan-based development firm, spoke about the administration’s development agenda in a recent housing-focused webinar.
“I don’t know if there’s been another administration that has been more proactive and more pro-affordable housing,” he said. “So I don’t think that they’re planning on shutting the doors and saying we’re not going to do any more affordable housing, but at the same time, we are going to run out of time.”
 

David Goldsmith

All Powerful Moderator
Staff member
Where’s the mayor? Council members say de Blasio’s MIA on Industry City rezoning
Leadership lacking on controversial rezoning as deadline approaches

The City Council has until early November to vote on the proposed rezoning of Industry City, but support from some members could hinge on Mayor Bill de Blasio’s getting involved at the last minute.
So far, he has been missing in action, members lamented Tuesday.

During a hearing, Council members repeatedly asked why the de Blasio administration has not been involved with the private application to rezone the 35-acre Brooklyn campus.

Council member Carlos Menchaca, whose Sunset Park district includes the business campus, called on the development team — a partnership between Jamestown, Belvedere Capital, Cammeby’s International and Angelo, Gordon & Co. — to secure investment from the city. That, along with a vocational high school, was among the 10 requirements the council member identified as necessary to win his support for the rezoning.

Menchaca also demanded a community benefit agreement with a local coalition to guarantee that jobs created at the campus would go to area residents.
Last month, Menchaca disrupted the proposal’s path to approval by announcing that he would vote against it. Originally, in September 2019, Menchaca said the application could move forward only if the development team made certain concessions, including a legally binding benefits agreement.

When Menchaca asked Industry City CEO Andrew Kimball about the status of the development team’s discussions with a community coalition, Kimball declined to go into detail. The CEO also acknowledged that the school depends on the city’s Department of Education getting involved.

“This is the nature and the breaking point of this entire application,” Menchaca said. “The mayor’s not here. You don’t know when that’s going to happen.”
Council member Antonio Reynoso echoed this discomfort, saying that it is easy to be open to building a school but without an engaged administration, promises to deliver one are empty.

“I could commit to build a 2,000-acre park in Williamsburg — pending administration approval,” he said. “You could welcome everything, all the bells and whistles.”
Reynoso also said it was “naive” to believe that the development team’s projection that the rezoning will generate 20,000 jobs has not been affected by the pandemic.

When asked about Industry City at a separate press conference, the mayor deferred to the City Council and noted that the rezoning is being pursued through a private application.
“I think the important thing is to let the City Council do its deliberations for now,” he said. “And then if at some point I think it’s important to weigh in, I will.”

Roughly 200 people signed up to testify at the morning hearing, which continued well into Tuesday afternoon. The hearing, held by the City Council’s zoning subcommittee, followed the nearly unanimous approval of Industry City’s rezoning application by the City Planning Commission in mid-August. The commission almost invariably reflects the view of the mayor.

The development team is seeking to rezone the 35-acre waterfront campus to allow for more retail, academic space and offices. During the hearing, Kimball highlighted that the development team has made concessions, agreeing to nix dormitories that were originally planned for the project, as well as hotels and conference space. If the rezoning is rejected, the development team will need to pursue other options, he said.

“The alternative as-of-right strategy will create far fewer jobs and forfeit the dynamic academic collaborations we propose,” Kimball said, reading prepared testimony. “It will also force us to look more closely at the highest-return opportunities available in [manufacturing] zones today, namely pure office and last-mile warehouse distribution.”

Opponents have been unimpressed by Kimball’s promises of jobs, believing that the positions will not be available to most Sunset Park residents and would attract newcomers who would push longtime residents out of their housing.

Kimball pushed back, saying “there is no evidence linking the creation of jobs at Industry City to gentrification in the neighborhood.”

Kimball said the development team is willing to put off adding retail and new buildings “until we have demonstrated that jobs are going to local residents.” Under a benefits agreement, he said, the development team would also preserve manufacturing space.

Menchaca and Kimball briefly sparred over the evolution of the application, with the elected official criticizing the development team for moving forward with its proposal last October. Kimball emphasized that discussions have been ongoing since 2013 and the process has repeatedly been delayed.

Though the local member’s support for a land-use application is typically essential for securing approval, Council members Ritchie Torres, Donovan Richards and Robert Cornegy Jr. have urged their colleagues to defy that custom. At Tuesday’s hearing, Cornegy again voiced his support for the proposal. Some of the city’s most influential labor unions — 32BJ SEIU and the Building and Construction Trades Council of Greater New York — have also thrown their support behind it.

During Tuesday’s hearing, Menchaca said a rezoning isn’t needed to attract jobs to Industry City, calling the proposal a “threat” to thousands of working-class immigrant families in the area. He said the development team moved forward with its land-use application before a community coalition — formed as part of a required framework he laid out — was able to hire an attorney. Menchaca said the team refused to advance the rezoning discussions “on the community’s terms.”

“Promises by major developers are broken every day,” he said, adding that the proposal hasn’t reached “the level of accountability my community demands and deserves.”
 

David Goldsmith

All Powerful Moderator
Staff member

Call it Amazon – Take Two.
Industry City late Tuesday night announced they are withdrawing their rezoning proposal on Sunset Park waterfront property they own that had the potential to bring thousands of jobs, small business opportunities and much-needed tax revenue to the cash-strapped city.
Industry City is a sprawling 16-building property that leases space to small and large businesses in the light manufacturing, technology, retail and events business sectors among others. There is no housing in the complex and it sought rezoning to further convert and/or demolish and rebuild some of the either vacant or used for warehouse and storage space buildings.
But it pulled the plug after ten state and congressional representatives in Brooklyn earlier on Tuesday signed onto a letter opposing the rezoning just weeks before the City Council was set to vote on the controversial proposal.
“Rather than cede leadership to a private developer forging ahead with their application, the City should take the initiative to reassess the economic environment, its manufacturing needs (particularly with the new mandates in recently passed climate acts), the needs of the local community for jobs, and the future of the Southwest Brooklyn Industrial Business Zone,” the lawmakers wrote.
The letter was signed by U.S. Reps. Nydia Velazquez, Hakeem Jeffries, Jerry Nadler, and Yvette Clarke; State Senators Zelnor Myrie and Julia Salazar, and Assemblymembers Jo Anne Simon, Robert Carroll, Diana Richardson, and Latrice Walker.
Earlier opposing the rezoning was City Councilmember Carlos Menchaca (D-Sunset Park, Red Hook), who represents the area as well as City Councilmember Antonio Reynoso and Public Advocate Jumaane Williams. Among those in favor for the rezoning were City Council Members Robert Cornegy and Donovan Richards as well as a a number of unions, the Brooklyn Chamber of Commerce and small businesses in the area.
“In late July, it became clear that a number of convergent factors were forcing us to rethink our request to have the property rezoned. Now, despite strong support from a growing number of Council Members, the City Planning Commission, a broad coalition of Sunset Park residents and small businesses, and members of the clergy, as well as civic, business and labor leaders and many others who care about New York and its future, it is clear that the current political environment and a lack of leadership precludes a path forward for our rezoning proposal,” said Andrew Kimball, CEO of Industry City, announcing the withdrawal of the rezoning proposal:
“Over and over, we have heard from key decision-makers that while the substance of the project is strong, the politics of the moment do not allow them to support any private development project. Even the historic nature of our commitments – which significantly elevated the bar for future development projects – and a seven-year record of creating jobs and opportunity weren’t enough to overcome purely political considerations. Sadly, in the context of one in five New Yorkers losing their jobs and the City’s fiscal crisis spiraling out of control, the leadership needed to approve this development failed to emerge. Therefore, we have decided to withdraw our application and proceed with as-of-right leasing options,” he added.
 

David Goldsmith

All Powerful Moderator
Staff member
Rezoning Gowanus, de Blasio’s shot at redemption, is no sure thing
Mayor’s management, not NIMBY, is greatest threat to ambitious plan

Local opponents can’t stop the city’s next big rezoning — but Mayor Bill de Blasio could.
This time, Gowanus is the battleground. But the fight differs in crucial ways from the one the mayor let die in nearby Sunset Park.
Most notably, the City Council member who represents Gowanus, Brad Lander, is willing to approve a rezoning over the objections of locals, where Sunset Park’s Carlos Menchaca was not. Still, Lander needs action from the mayor, who did not lift a finger for Industry City as locals beat its rezoning plan into submission last week.

A transitioning neighborhood saddled by zoning for industrial uses, Gowanus is short on amenities but long on potential. It sits between pricey Park Slope and Carroll Gardens; a subway line runs under Fourth Avenue at its Park Slope border; and a plan to clean up the 1.8-mile canal, a federally designated Superfund site, is underway.

When insiders complain that de Blasio is distracted, indecisive or unmotivated, this is the kind of thing they are talking about.
In the wake of Industry City’s defeat, real estate interests are watching Gowanus intently. They know rezoning the underdeveloped area is not assured even though de Blasio likes the idea. The mayor also favored the Industry City proposal, as indicated by its full-throated backing by his planning czar, Marisa Lago, and the City Planning Commission, most of whose members are de Blasio appointees.

Industry City’s unraveling was the kind of thing that happens when a mayor lacks political capital — as de Blasio has since the spring when he outraged his political base and staff by defending the NYPD’s handling of George Floyd protests. His lack of interest in real estate’s priorities was another factor: “I didn’t get involved [in Industry City] because it was a private-sector company coming forward,” he said during a radio interview Friday.

“In some ways, rezoning has become just a dirty word”
— Brad Lander, City Council member
De Blasio-backed rezonings previously failed in Bushwick and the South Bronx, killed by local City Council members without the mayor so much as calling them out. And in Soho, Comptroller Scott Stringer, by virtue of a single tweet favoring rezoning, has been more active than de Blasio, whose planning department wants to move forward with a plan, according to a source close to the agency.

“In some ways, rezoning has become just a dirty word,” Lander said in an interview. “There’s a range of people who are suspicious of the idea of a rezoning, either because they fear displacing impacts … or they are skeptical of private-sector growth and development; or they don’t like change.”

Usually, when both the mayor and local Council member favor rezoning, a plan sails through the approval process. But among other complications for Gowanus, Lander insists that major upgrades to two local NYCHA projects — the Gowanus and Wyckoff houses — be included in the rezoning.

“That is the last significant sticking point,” Lander said. “It would be morally unacceptable to build this new neighborhood right around the housing developments … but leave almost all the low-income housing in unacceptable, dilapidated condition.”

Lander does not think that should be hard or time-consuming for a mayor who favors rezoning and fixing public housing. The fact that his request remains unresolved after about a year suggests otherwise.
Indeed, the entire process has been slow. Lander said he initiated community consensus-building for a rezoning in 2013 and brought a framework to the mayor in 2014 or 2015, only to wait about two years for a response. Now concern is building that rezoning will not get done before the mayor and Lander leave office in 15 months. When industry insiders complain that de Blasio is distracted, indecisive or unmotivated, this is the kind of thing they are talking about.

Put on the spot during a press conference last week, de Blasio insisted, “The Gowanus rezoning in Brooklyn is moving forward.” He added, “We are going to push hard to get good development that benefits communities.”
Still, the mayor has yet to choose from “a wide range of ideas” Lander said he offered for funding the NYCHA improvements. De Blasio could simply allocate tens of millions of dollars, but Covid has sabotaged city revenues. He could utilize a proposed NYCHA preservation trust.

Or he could raise funds for the Gowanus and Wyckoff houses by selling development rights in the rezoned area, a prospect that would appeal to the industry if the price were right. Before Covid, at least, the housing market there was strong: A two-bedroom apartment in a Lightstone Group building overlooking the polluted Gowanus Canal rented in January for $6,471 a month.

The mayor also needs to forge an agreement for accessibility upgrades at the Union Street subway station paid for by Avery Hall Investments, which plans to build as many as 200 apartments above it at 204 Fourth Avenue. The developer is willing to make a deal, which would involve the Metropolitan Transportation Authority. And the de Blasio administration is eyeing a more complicated citywide formula for transit improvements. That could delay matters further.

The city’s glacial pace is a concern for the industry, which has invested hundreds of millions of dollars in Gowanus development sites in the past few years. On the same day last week that the mayor claimed progress was being made, the Brooklyn Paper reported that a $1.3 billion city project to stop raw sewage from being released into the canal will not be completed for another 12 years — a timeline the de Blasio administration considers “aggressive.”

“We are going to push hard to get good development that benefits communities”
— Mayor Bill de Blasio
A spokesperson for the Department of City Planning said the agency “fully intends to complete the public review process for the Gowanus [rezoning] within this administration.”

But seven years into the effort, time is running out. More than half a dozen city and state agencies still must get on the same page. The public review process, which ultimately requires approval from Lander and de Blasio, takes seven months — and the mayor does not want to start the clock until they come to terms. Lander also wants a public engagement effort early next year to precede the review.

“We are waiting for the administration to agree to that process,” he said, in what has become a familiar refrain.
 

David Goldsmith

All Powerful Moderator
Staff member
The battle to rezone Soho is just beginning
Proposal is still in its infancy but already faces opposition

The fight over proposed rezoning of Soho and Noho is already taking shape.
Mayor Bill de Blasio announced Wednesday that rezoning, which would pave the way for an influx of housing in the well-to-do neighborhood, will enter the city’s land use review process sometime next year.

Though details on the city’s proposal are sparse, what’s known is that it could create 3,200 new apartments, 800 of which would be permanently affordable through the Mandatory Inclusionary Housing program. It would also address the need for “clearer rules to help retail stores survive,” the mayor said during a Wednesday press conference.

Much of Soho is zoned for manufacturing use with a limited amount of retail space permitted. A good portion of its well-known shopping district is technically violating zoning rules.

De Blasio’s support follows years of criticism from housing advocates that his administration has only targeted low-income neighborhoods for upzoning. On Wednesday, the mayor noted that “there’s a lot of support on the ground for the idea that there needs to be affordable housing in every community, including those that are upper-income.”

But it’s already facing fierce community opposition. The Greenwich Village Society for Historic Preservation argues that the rezoning is a giveaway to developers that will result in large-scale luxury towers rising in the low-slung, historic neighborhood. Andrew Berman, executive director of GVSHP, said the de Blasio administration is “conflating upzoning with affordability.”
“I don’t think Soho and Noho need more big-box retail or luxury housing,” he said. “And they definitely don’t need high-rises and skyscrapers.”

Jessica Katz, executive director of the Citizens Housing & Planning Council, which supports the rezoning, said that much of Soho is designated as an historic district, which will ensure that the character of the neighborhood is preserved. She said that with uncertainty surrounding the office market, as well as retail, the zoning rules in Soho and Noho should be made “as flexible as possible.”
Leveraging private investment to build affordable housing is especially crucial now, given the lack of public subsidies available and the gaping budget hole caused by the pandemic. It is not yet clear which developers stand to benefit most from a zoning overhaul in Soho and Noho, though a few sites are primed for development.

A map of the district published on the Department of City Planning’s website shows that a parking lot on Centre Street owned by Edison Properties is within one of the three “housing opportunity areas” identified by the agency. A representative for Edison declined to comment.
Last year, CB Development took over the ground lease of 358 Bowery, one of the few development sites in the district. Representatives for CB didn’t respond to messages seeking comment.
Valerie Campbell, a partner at Kramer Levin who represents residential and commercial developers, said the rezoning is long overdue, but expects the proposal won’t simply sail through the Uniform Land Use Review Procedure.

“The public review process is going to be quite intense, and certainly a test of the administration to realize its affordable housing goals,” she said.
It seems to have the backing of local City Council member Margaret Chin, whose support will be essential. In a statement, Chin said she is looking forward to charting “a path forward that brings more opportunities for desperately needed affordable housing while preserving and enhancing the artistic, cultural, and historical components that make these neighborhoods so special.”

A small portion of City Council member Carlina Rivera’s district is also part of the proposed rezoning, based on City Planning’s map.
“We have not seen this new proposal from the Department of City Planning and we were not alerted to the announcement from the Mayor until yesterday afternoon, nor has DCP involved us in any discussions on this proposal since the SoHo/NoHo Community Advisory Group last met prior to the pandemic,” Jeremy Unger, a spokesperson for Rivera said in a statement, adding that the council member will “review the application carefully” once additional details are released.

Perhaps crucially for the mayor, Soho and Noho would also boost de Blasio’s somewhat deflated affordable housing legacy. He set out to rezone 15 neighborhoods through the city’s MIH program, but has completed only six. Lawsuits and community opposition have delayed some of those plans and killed others entirely.
With a little over a year left in office, the mayor has committed to launching a rezoning of Gowanus in January and moving forward with the redevelopment of Governors Island (which will not have housing). De Blasio has every reason to want to complete these rezonings before the end of his term, given that the city will have not only a new mayor but a largely different City Council come 2022. Chin is term-limited, meaning the Soho rezoning could become a major campaign issue for those vying for her seat.

“The timeline is very tight,” said Katz. “It is definitely going to take some leadership to make it happen.”
 

David Goldsmith

All Powerful Moderator
Staff member
Flushing waterfront vote postponed as opposition mounts
Council subcommittee to consider $1B plan Dec. 7

With opposition to a proposal to transform Flushing’s waterfront growing among City Council members, a vote was called off Wednesday.
The Council subcommittee on zoning and franchises was to weigh in on the $1 billion private development plan, but tabled the matter until Dec. 7. The delay follows a statement issued by a dozen members, including subcommittee chairman Francisco Moya, opposing the Special Flushing Waterfront District project.

Moya tweeted out the statement Tuesday night, saying approval would be a “grave mistake.”
“We believe that it would be irresponsible to approve the application without deep community benefits like real affordable housing and commitments to provide good jobs for local community members,” the letter states.

In a statement to The Real Deal, Moya attributed the vote’s delay to ongoing “negotiations and conversations taking place to hopefully bring this project to a better place that will serve the community.”
The development team — F&T Group, Young Nian Group and United Construction and Development Group — said in a statement that Moya’s letter “ignores the many immediate benefits the Special Flushing Waterfront District will bring to Flushing.”
“Without approval of the district, there will be ZERO affordable housing if the owners choose to develop as-of-right according to in-place zoning,” the developers said in an emailed statement. “It is antithetical of the Council members to support affordable units and simultaneously fight against the very zoning enhancement that would allow affordable housing to be brought to the area.”

The opponents want more income-restricted apartments and are betting that the developers will add more rather than build the shorter project that current zoning allows. Normally those details are negotiated by the local member, in this case Peter Koo, whose decision would be echoed by the rest of the City Council.
But the dozen opponents, who would need 13 more votes to defeat the measure when it reaches the chamber floor, feel Koo has not demanded enough from the developers, who are seeking to create a 29-acre special district along the Flushing waterfront.

The companies would separately develop four sites, creating more than 1,700 residential units, a hotel, retail and public space. F&T is seeking to upzone its site as part of the city’s Mandatory Inclusionary Housing program and build a 304-unit building, with 75 to 90 apartments set aside as affordable. But the three other sites are seeking only to be taller than currently allowed, not to add units by increasing floor-area ratio.
The proposal has faced local opposition and drawn the ire of two powerful unions, 32BJ SEIU and New York Hotel & Motels Trades Council. The former has raised concerns that the project will accelerate gentrification and the latter has criticized the development team for not committing to hiring union workers.

The developers believe the community’s top priority — the waterfront access that the project would provide — is being lost in the conversation as critics focus on affordability.
The real test for the proposal will be when it heads to the full City Council, which it can do even if Council committees vote against it. Koo’s support for the project figures to carry the day, but the developers might not want to risk a close vote.
 

David Goldsmith

All Powerful Moderator
Staff member
“New York City zoning serves neither pro-development nor anti-development constituencies well, and both waste untold amounts of money and time navigating its arcane procedures. Once the leader in crafting zoning law, New York now lags behind Los Angeles, Miami and other cities that recently rewrote their codes.”

City zoning system rooted in racism and mired in inequality

Edward Basset might have complained about the impact of the 1915 Equitable Building and its shadow, but the lengthy report by the commission he led that paved the way for zoning law, focuses far more on protecting wealthy white enclaves from the intrusion of immigrant garment workers. The commission’s language is clear: “These hordes of factory employees … are doing more than any other thing to destroy the [neighborhood’s] exclusiveness.” Of those living in overcrowded slums, the report says there is no “practicable remedy” but that zoning “can prevent the repetition of these conditions in other parts of the city. A few comparatively small districts of the city are already spoiled.”
The 1961 rewrite of the zoning code did, as Sachmechi points out, establish a transactional element to zoning, in which public benefits such as open space can be used to “buy” additional development rights. But the ethos underlying this and other elements of the 1961 zoning is the same that created the slum-clearance programs that razed entire neighborhoods in order to create “towers in the park” housing developments: the belief that taller buildings with more space between them would “solve” urban ills such as poverty. The 1961 zoning code was openly modeled on the form of the “whites only” 1947 Stuyvesant Town development, which had displaced 11,000 residents of what was previously known as the Gas House District.

While urban designers today preach the value of mixed-use environments, our zoning code is still designed to keep uses from mixing. The separation of uses that is a core part of zoning law originated in a time before a slew of environmental and workplace laws protected neighborhoods from industrial toxins, and from a time that could not have envisioned manufacturing as something done at a desk with a computer and a 3-D printer. Historically segregation of uses went hand in hand with redlining and racial segregation. Today separating where we work and where we live impacts minority communities the most, as they face the longest commutes and spend a higher proportion of their income on those commutes. Zoning is designed to protect the value of property and the investments of property owners. What does that mean in a city where more than two-thirds of residents rent rather than own their home?

New York City zoning serves neither pro-development nor anti-development constituencies well, and both waste untold amounts of money and time navigating its arcane procedures. Once the leader in crafting zoning law, New York now lags behind Los Angeles, Miami and other cities that recently rewrote their codes.

We can do better. New York zoning is long overdue for a full-scale rewrite. Our next mayor should take on this much-needed reform by assembling a blue-ribbon committee to do the studies needed and to write a new zoning code. Maybe then we can have zoning laws that reflect our values today and help us to shape the city we want for tomorrow.

Jack L. Robbins, partner at FXCollaborative and adjunct professor at the NYU Schack Institute of Real Estate
 
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