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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... and toward a future where we #DefundNYPD and replace the approach to public safety that puts policing first w/one that puts communities first.
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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.
 
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