Nov. 12 (Bloomberg) -- The New York City Council failed to agree on a rezoning plan that would have allowed developers to replace office buildings in Manhattan’s East Midtown neighborhood with taller towers, one of Mayor Michael Bloomberg’s final initiatives before leaving office.
The proposal also would have allowed landmarks such as St. Patrick’s Cathedral on Fifth Avenue to sell air rights to developers across a broader swath of Midtown. Council Speaker Christine Quinn and member Dan Garodnick announced the lack of agreement after a caucus session.
“We remain concerned with the price, methodology and timing of the air rights to be sold by the city,” Quinn and Garodnick said in the statement. “We are also concerned with the certainty and funding level of the needed infrastructure improvements.”
The proposal, supported by developers and construction unions, would have rezoned a 73-block area around Grand Central Terminal with office and residential towers that Bloomberg said the city needed to remain competitive with London and other world capitals.
The mayor withdrew the application after the council decided not to take up the issue at a committee hearing scheduled for tomorrow, saying failure to act “will unfortunately cost the area hundreds of millions of dollars in badly needed subway and street improvements and $1 billion in additional tax revenue.”
The lack of agreement will cancel a financing agreement for $100 million in mass-transit and public-space improvements before any development would begin, Bloomberg said.
The mayor is the founder and majority owner of Bloomberg News parent company Bloomberg LP.
Mayor-elect Bill de Blasio, 52, who assumes office Jan. 1, said in a statement today that while he supported rezoning the area “to allow the creation of a world-class 21st-century commercial district,” the delay will “address the many unanswered questions about this plan,” including whether development rights had been “appropriately priced to create the best possible value for the city.”
The zoning plan would have required developers to contribute to a fund that would finance improved entrances, platforms, stairways, escalators and other enhancements to the area’s streets and mass-transit network. The account, known as the District Improvement Fund, would help the area accommodate additional people working in the larger office buildings.
“We believe this decision is costly to the city of New York,” Steven Spinola, president of the Real Estate Board of New York, an industry association, said today. Should de Blasio kill the plan, “it means hundreds of millions of dollars of transit and street improvements will not be made.”
A version of the rezoning plan will go forward, said Quinn, who leaves office Dec. 31, and Garodnick, a Manhattan Democrat who represents the Midtown district and will continue in the next council term.
“We want to see development in the area that is both responsible and encourages growth that keeps us competitive with other cities,” they said in their joint statement. “But, with so many outstanding issues, there is no good reason to rush the proposal through.”