Wall Street Journal Alchemy and the Art of New York City Property Development by Josh Barbanel

Wall Street Journal
Wall Street Journal
Alchemy and the Art of New York City Property Development
Josh Barbanel
12/15/2016

A developer mixes a smattering of tiny building lots with a complex zoning law in hopes of winning approval for a Manhattan high rise

Like the miller’s daughter who spun straw into gold, New York developers have managed to turn complex zoning rules and a smattering of tiny building lots into lucrative high-rise apartments.

The latest example is a slender 521-foot-tall brick condo tower on the Upper East Side that is planned on a combination of lots on Third Avenue and East 88th Street. Together the parcels form an L-shape and wrap around several existing buildings.

To realize the project, the developers came up with a novel plan to sidestep strict zoning rules on the side street by carving out a separate four-foot-wide lot along East 88th St.

At first, the idea passed muster, and the city issued permits last year for the building known as 180 East 88th Street. But as soon excavation work began in May, local elected officials and preservationists complained, saying usage of the small lot was a ploy to allow for a taller, slender building. So the city shut down construction.

The developers have since consulted with the city and come up with a revised plan: a 10 foot wide lot along East 88th St. The city is reviewing the submission, but preservationists have filed another objection, and the stop-work order remains in place until a final decision is rendered.

Alchemy in transforming New York’s zoning rules has helped create New York’s tallest residential towers, such as the 1,550 foot Central Park Tower under construction on West 57th Street. But the fancy footwork by developers has also spurred a backlash, as neighborhood groups try to limit use of what they call zoning gimmicks.

At Central Park Tower, Extell Development Co. combined five lots and added in air rights from five other buildings to get the right to build so high, according to a report from the Municipal Art Society.

The developer boosted the height of the building by creating super-tall utility spaces that added hundreds of feet to the height, according to a filing it made with the city in 2013. The utility spaces don’t count against limits on floor area.

At 180 East 88th, construction workers have been locked out since May by the stop-work order. Sales of condos including a four-bedroom unit listed for $15.5 million have been halted. Construction remains idle, potentially jeopardizing financing on the project, real-estate experts said.

Manhattan Borough President Gale Brewer said developer DDG is to blame for its own mistakes. “This developer’s response to getting caught with its hand in the cookie jar is to just reach for the cookie again,” she said.

Michele de Milly, a spokeswoman for DDG, said the firm has been “highly responsive” and addressed all issues raised by the city. “We look forward to resuming construction” once the city completes its review.

A drawing of the planned high rise at 180 E. 88th Street, shown in yellow, with the 10-foot-wide lot shown in blue on the right. The drawing was provided by preservation group Carnegie Hill Neighbors, which opposes the project. PHOTO: CARNEGIE HILL NEIGHBORS

Experts said zoning maneuvers by developers are often practical solutions bridging the gap between generic rules and the reality of complex site-specific situations.

George Janes, a zoning expert hired by a preservation group, Carnegie Hill Neighbors, said the combination of small lots envisioned by the developers of 180 East 88th was some of “the most-amazing zoning gymnastics I have seen in a long time.”

He said that by creating a separate lot along East 88th Street, the developers weren’t required to follow height restrictions under a city rule that limits the height of narrow slivers of buildings between two low-rise buildings.

It also allowed the developer to designate space on the 88th St. side as a required rear yard even though the yard was part of what will be the front entrance to the condo building, Mr. Janes said.

Jesse Masyr, a zoning expert and partner at Fox Rothschild LLP, acknowledged that sometimes the results seem “wacky.”

“Every so often you confront a problem and you have to find a solution that meets the four corners of the zoning resolution,” he said.

Alexander Schnell, a spokesman for the New York City Department of Buildings, said the new plan for 180 East 88th St. increased the size of the separate lot to 10’x22’, a size the department considered “developable.”

It also creates two required building exits on the Third Avenue side, since that on East 88th St. didn’t qualify as a legal exit. The changes reduced the size of the new building by 1,200 square feet, Mr. Schnell said.

But community critics aren’t mollified. “Six feet doesn’t make a difference,” said New York City Council member Ben Kallos, a Manhattan Democrat. “An unbuildable 10-foot lot must not give rise to an illegal” skyscraper, he said.

Local groups continue to press for zoning changes in New York City to limit the heights of future buildings. But it isn’t clear if and when city authorities will respond one way or the other.

Write to Josh Barbanel at josh [dot] barbanelatwsj [dot] com

 

Issue: 
Land Use