1 Vanderbilt Place Update

Wednesday, November 18, 2015

After more than three years of work on the issue, in May 2015 the zoning subcommittee (part of the Land Use Committee) of the New York City Council voted unanimously to approve the creation of a special permit to increase the density of the buildings along the five-block Vanderbilt Corridor. The proposal was quickly approved by the City Planning Commission, and by the full Council. These zoning changes will allow a 67-story tower at 1 Vanderbilt Place and could allow other buildings of the same size along Vanderbilt Avenue from East 42nd to East 47th Street. Developers must get a special permit for each project that takes advantage of the zoning changes. To be considered for a permit, developers will be required either to fund infrastructure improvements or to buy air rights from other nearby landmarked buildings. Developers will still submit their projects to the city’s extensive ULURP process, which requires approvals from community boards, borough presidents and the City Council. As part of the plan, the SL Green Realty Corp., the developer for the One Vanderbilt project, will contribute $220 million for transit improvements at Grand Central. SL Green (NYSE:SLG) is New York City’s largest commercial property owner.

New York City Council Member Daniel Garodnick, of the 4th Council District was a key player in the approval of this plan, which ultimately involved city officials at all levels, including Manhattan Borough President Gale Brewer, City Planning Chair Carl Weisbrod, the NY City Council and Mayor Bill de Blasio. This plan is another example of the growing number of public-private partnerships which exchange zoning concessions for improvements to public spaces, amenities and infrastructure. In his letter of May 7, Garodnick noted that the One Vanderbilt plan includes $220 million to be be used to add entrances to mass transit and public spaces, and will reconfigure MTA subway platforms to move Lexington Avenue trains more quickly through the station. One more train per hour will be able to pass through during the peak rush hours. The infrastructure improvements will also allow better access from the Long Island Railroad to the 4, 5 and 6 subway lines, contributing to the the East Side Access project. The zoning changes make it more profitable for developers to upgrade the Midtown commercial office stock, a goal that goes back to the Bloomberg administration. Even if there are tax breaks for the owner, the super-tall office buildings are likely to make a significant financial contribution to New York City.

One Vanderbilt is bounded by Vanderbilt Avenue and Madison Avenue between East 42nd and East 43rd Street, across from Grand Central Terminal. When it is complete, the Kohn Pedersen Fox-designed tower will reach 1,400 feet and will hold 1 million square feet of office space, anchored by a 200,000-square-foot TD Bank. The developer’s press release of May 27, 2015 says they expect to start construction immediately, and plan to demolish the site’s current building as soon as possible. SL Green will create a new public plaza on Vanderbilt Avenue adjacent to the Terminal as well as two transit halls at the base of the tower. The full package of improvements is expected to be finished by 2021, concurrently with the completion of the building. Note: The original design called for a 1,500 foot tower and 63 stories.

But this is not the end of the story. In September 2015, the owner of Grand Central Terminal, Andrew S. Penson, sued the City and One Vanderbilt developer SL Green for $1.1 billion alleging that they have deprived him of his property rights when the city gave SL Green permission to build a 1,501-foot tall office tower, without having to buy any air rights from him. The city designated Grand Central as a landmark in 1967, partly to block a proposed office tower that would have risen overhead. An investment group led by Mr. Penson bought Grand Central for approximately $80 million in 2006. The terminal itself had little value, the lawsuit contended, because the building was under a long-term lease to the Metropolitan Transportation Authority for a relatively modest rent that declines over time. Mr. Penson’s secret negotiations with SL Green to sell his air rights collapsed after the developer concluded his price was too high. Mr. Penson’s lawyers argued in the suit that by granting SL Green the rights to build a tower “for free” that is twice as big as had been permitted by zoning, the de Blasio administration and City Council had rendered Grand Central’s air rights “worthless.”

In addition to the economic aspects of the zoning changes, which on the whole are positive, city officials and NYC residents should form their opinions of each project from the perspective of good city planning. How do we achieve a good balance between our history, represented by landmark buildings, and the needs of a modern city, represented by new development? Infrastructure, resilience, sustainability, sensible traffic patterns— including pedestrian, bicycle, automobile and mass transit, trees and green spaces, environment and reflections off glass towers, public plazas, light and air, views, a healthy mix of small and global businesses, lively retail, restaurants, and services, thriving neighborhoods, communities and work environments, cultural, civic and not for profit institutions, affordability, middle income and luxury, all should be considered in the mix. We need strong community values and participation to achieve this balance.

Sources:
May 5, 2015, New York Daily News, “NYC zoning committee approves luxury 63-story skyscraper One Vanderbilt,” by Erin Durkin.

May 5, 2015, Commercial Observer, “Vanderbilt Rezoning Takes Giant Leap Forward,” by Danielle Schlanger. 

May 5, 2015, Bloomberg Business, “SL Green in Pact With NYC Officials on Midtown Skyscraper,” by David M. Levitt. 

May 27, 2015, New York YIMBY, “City Council Approves One Vanderbilt And Midtown East Rezoning,” by Rebecca Baird-Remba. 

May 27, 2015, Businesswire, “New York City Council Grants Final Approval to SL Green’s One Vanderbilt Office Tower - SL Green to Provide $220 Million for Grand Central Terminal Infrastructure Upgrades.” 

September 28, 2015, New York Times, “Owner of Grand Central Sues Developer and City for $1.1 Billion Over Air Rights,” by Charles V. Bagli. 

October 12, 2015, ny.curbed.com, “1,400-Foot One Vanderbilt Joins the NYC Skyline in New Render,” by Amy Plitt. 

 

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