City Council Land Use Committee Approves Midtown East Rezoning

Alerts / July 31, 2017

On Thursday, July 27, the New York City Council’s Land Use Committee approved a long-awaited change to the zoning rules for East Midtown. The amendment establishes the “East Midtown Subdistrict” and affects the area between Third Avenue and Madison Avenue from East 39th Street to East 57th Street, excluding five blocks along Third Avenue from East 46th Street to East 51st Street. The rezoning unlocks approximately 3.6 million square feet of unused air rights from 33 landmarked buildings in the rezoned area by permitting landmarked property owners to transfer them to landowners anywhere in the new subdistrict for office tower development. Under existing zoning rules, air rights are transferable only to adjacent property owners. The rezoning strives to spur development in an area where the average office building age is 75 years and only five new office buildings have been constructed since 2001. Additionally, the approved changes provide for transit infrastructure improvements and new public plazas and green spaces.

The amendment sets a minimum air rights transaction fee equal to the greater of (i) $61.49 per square foot or (ii) 20 percent of the total sale price (which is substantially lower than the fee that was originally contemplated by the mayor and City Council). Fees will be contributed to a newly established Public Realm Improvement Fund used to implement projects from the Public Realm Improvement Concept Plan within the East Midtown Subdistrict and its immediate vicinity. The fund will be utilized at the discretion of a governing group comprising nine local government representatives including five mayoral appointees from city agencies. The plan calls for numerous transportation, infrastructure and open space improvements. Projects range from new street-level subway exits and entries to new plazas and pocket parks.

The approved changes also provide for increased density. Existing zoning codes allow floor area ratios of 12 to 15 for the area. Under the approved change, maximum allowable density increases to floor area ratios of 18 to 27. Maximum density will depend on the proximity of the applicable property to major transit hubs in the area. Developers may take advantage of the new density rules by purchasing unused landmarked air rights or by making improvements to certain transit infrastructure more specifically set forth in the rezoning plan.

Mayor de Blasio lauded the approval, stating, “[T]his neighborhood will see major upgrades to subway stations, more expansive space for pedestrians, investments in its iconic landmarks, and a new generation of office buildings that will spur good jobs for New Yorkers and will keep our city the global capital of commerce. This is a powerful promise that will make our city stronger.” Indeed, the plan to rezone East Midtown has been years in the making. The Roman Catholic Archdiocese of New York reportedly hired lobbyists beginning in 2014 to garner favor for a rezoning plan. Given that the Archdiocese of New York owns an estimated 1.1 million square feet of unused air rights above St. Patrick’s Cathedral, the church could potentially gain substantial financial benefits from the rezoning. Nevertheless, the Archdiocese of New York has criticized the approved plan, predicting the required public improvements envisioned by the city may not come to fruition, as the minimum transfer fee on the sale of landmarked air rights imposed as part of the plan will prohibit rather than induce commercial development. The Real Estate Board of New York has shared this view in a statement on its website, dubbing the plan a “step backwards” and admonishing the plan’s reliance on new commercial development to fund public improvements.

The approved plan to change the zoning code is subject to full City Council and mayoral approval. Both parties are expected to approve the measure.

If you have any questions about this alert, please contact Gina M. Mavica at or +1.212.589.4672, Michael Iannuzzi at or +1.212.589.4651, or Barbara A. Hayes at or +1.212.589.4687.

Authorship credit: Gina M. Mavica, Michael Iannuzzi and Barbara A. Hayes

Baker & Hostetler LLP publications are intended to inform our clients and other friends of the firm about current legal developments of general interest. They should not be construed as legal advice, and readers should not act upon the information contained in these publications without professional counsel. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you written information about our qualifications and experience.