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Projects & Proposals > Manhattan > East Midtown Printer Friendly Version

East Midtown Rezoning
Background & Existing Conditions


Overview | Background & Existing Conditions | Proposal
"A" Applications | EIS | Public Review | Public Realm Visioning Process

 

Background & Existing Conditions
East Midtown Office District
East Midtown Office District - PDF Document View a larger image.

The East Midtown office district is one of the largest job centers in New York City and a premier business address. The rezoning area, generally bounded by East 39th Street to the south, East 57th Street to the north, Second and Third avenues to the east and Fifth Avenue to the west, contains approximately 70 million square feet of office space, approximately 200,000 workers, and numerous Fortune 500 companies.

This area is centered on Grand Central Terminal, one of the City’s major transportation hubs and civic spaces. Around the Terminal and to the north, are some of the City’s best known office buildings, including Lever House and the Chrysler Building, along with a mix of other landmarks, civic structures, and hotels.

The area’s transportation network is currently being expanded through two major public infrastructure projects: East Side Access, and the Second Avenue subway. The East Side Access project would, for the first time, provide Long Island Rail Road commuters one-seat access to East Midtown through the construction of a new below-grade station connected to Grand Central. Construction of East Side Access is scheduled to be completed in 2019. Additionally, the Second Avenue Subway project, whose first phase (from East 63rd to East 96th streets) is currently under construction, would alleviate congestion on the Lexington Avenue subway line which runs through the East Midtown office district.  Construction of the first phase of the Second Avenue Subway project is scheduled to be completed in 2016.


Current Status and Recent Trends
East Midtown is today one of the most sought-after office markets in the New York region. One of the key strengths of East Midtown has been the wide range of office space that can be found there, including buildings of different sizes and ages allowing the area to meet the needs of diverse tenants at varying price points.

Overall, East Midtown’s office tenants have historically been financial institutions and law firms, with some of the country’s largest banks headquartered there. Recent trends have both reinforced and altered this role. The area has become home to the City’s hedge fund and private equity cluster because of the area’s cachet and easy access to the Metro-North commuter shed. This has lead to a spike in rents for high-quality space in the area’s top-tier buildings. On the other end of the office market spectrum, the area has also developed a more-diverse roster of tenants as rents dropped with the economic downturn, accommodating tenants who were previously priced out of the area. Both of these trends have helped the area recover from the 2008 recession, with vacancy rates falling to the range of 7 to 8% percent.

Long-Term Challenges
While this area has historically performed strongly as an office district and continues to do so, the City has identified a number of long-term challenges that must be addressed in order for East Midtown to remain one of the region’s premier job centers. Primarily, this is in relation to the area’s aging office building inventory that over time is unlikely to provide contemporary space and amenities desired by tenants, which are crucial to competing on the global stage. Consequently, the area’s importance as a premier office district could diminish, and the anticipated economic benefits of new jobs and an expanded tax base from substantial investment in transit infrastructure (including the ongoing East Side Access and Second Avenue Subway projects) would not be realized. Long-term challenges affecting the East Midtown district include:
  • Aging office building stock
  • Current zoning and limited office development
  • Pedestrian network challenges
Long Term Challenges - Grand Central
Aging Office Building Stock
The East Midtown rezoning area contains approximately 400 buildings, of which more than 300 were constructed prior to the 1961 zoning, with the average age being 73 years old.  As a result, much of the East Midtown’s office building stock has low floor-to-ceiling heights and numerous interior columns that increasingly fail to meet the needs of corporate tenants. Without new office buildings that meet modern standards, the area’s competitiveness as a premier business district will be compromised.

Because these buildings are increasingly less competitive with the office building inventory in other global business centers,  the less marketable office buildings may convert to other uses, especially to residential or hotel uses. Recent conversions include hotel conversions such as the Library Hotel at 299 Madison Avenue and the Marriott Courtyard at 866 Third Avenue, and residential conversions such as the condominiums at 5 East 44th Street.  The continued trend of office space conversion combined with the aging office building stock will erode the commercial core, and the city would fail to capitalize on the considerable concentration of regional rail infrastructure in East Midtown and ongoing expansion of the transit network.

300 Buildings within the District were constructed prior to 1961
300 Buildings within the District were constructed prior to 1961 - PDF Document View a larger image.

Building within the District were constructed prior to 1961
Building within the District were constructed prior to 1961

Challenges of Current Zoning and Limited Recent Office Development
East Midtown Office District
Existing Maximum As-of-right FAR - PDF Document View a larger image.
Existing zoning regulations are not appropriate for East Midtown’s current needs and may impede the area’s continued status as a premier office district.

Current zoning has proven to be an impediment to reinvestment in East Midtown. In the past decade, only two office buildings, both of which are mid-sized, have been developed under existing zoning. In addition, many buildings that predate the existing zoning are built with more floor area than currently allowed, creating a deterrent for redevelopment of these older office buildings. As these older buildings become less desirable for office tenants, they become more economically attractive for conversion from office to residential or hotel use, which erodes the commercial core.

Existing commercial zoning in most of the area allows commercial density to an as-of-right Floor Area Ratio (FAR) of only 15 along the avenues and 12 on some mid-blocks.  While the permitted floor area in some locations can be modestly increased through special permits for subway improvements and landmark transfers, these special permits are subject to full public review (ULURP),  they have been rarely sought, and therefore, have not incentivized new development nor provided public benefits.

In the area immediately surrounding Grand Central Terminal, an FAR of up to 21.6 can be achieved by a City Planning Commission special permit established in 1992. The purpose of the special permit was to facilitate new development through the transfer of development rights from landmarks, chiefly from Grand Central Terminal, while also providing for improvements to the underground pedestrian network that links Grand Central to surrounding buildings.  However, use of the Grand Central special permit requires lengthy negotiations with the City and MTA regarding transit/pedestrian improvements, and a full public review (ULURP) of each transfer.  The only project to utilize this special permit, at 383 Madison Avenue, was completed in 2001. Over 1 million square feet of Grand Central Terminal’s development rights remain unused.

Pedestrian Network Challenges

East Midtown contains some of the City’s best known public and civic spaces, including the Seagram Building Plaza, Park Avenue, and Grand Central Terminal’s main hall. It also contains a below-grade pedestrian network which connects the Terminal to the Grand Central subway station at 42nd Street, and to surrounding buildings, allowing for a more-efficient distribution of pedestrians in the area. Along with the additional subway stations to the north, East Midtown is one of the most transit-rich locations in the City and the pedestrian network is one of the area’s unique assets. However, the area faces a number of challenges to creating a pedestrian network fully befitting the area’s role as one of the premier office districts in the world. These include:

  • The Grand Central subway station, a transfer point for regional rail and the 4, 5, 6, 7 and 42nd street shuttle subway lines, is one of the busiest in the entire subway system with nearly half a million daily users. This station, however, experiences pedestrian circulation constraints including platform crowding and long dwell times for the Lexington Avenue line (4, 5, and 6), which limits train through-put, creating a subway system bottleneck.

  • The sidewalks of Madison and Lexington avenues are narrow, approximately 12 to 13 feet wide, given the scale of pedestrian use they handle. The effective widths of these sidewalks are even narrower when subway grates and other sidewalk furniture are included. Side street sidewalks in the area are narrow as well.

  • While East Midtown includes a number of privately-owned public spaces, it contains no significant publicly-controlled open spaces. This situation would be somewhat ameliorated by the permanent development of Pershing Square into public open space.

map of area plaza and open spaces
map of area plaza and open spaces - PDF Document View a larger image.
  • Vanderbilt Avenue, the front door to Grand Central Terminal, is bleak and underutilized.

Long Term Consequences of Current Challenges

Absent intervention, East Midtown’s competitiveness as a premier business district will be compromised, and the huge public investment in its transit and regional transportation infrastructure, including East Side Access and the Second Avenue Subway, would fail to realize its full potential to generate jobs and tax revenues for the City. The introduction of new, state of the art sustainable office buildings, coupled with investment in the transit and pedestrian realms, can ensure the area’s continuing role as a premier business district and economic engine.





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