Crain's New York - April 29, 2013 - (Page 11)

TUCKER REED Revise zoning code to boost public facilities N ew York’s next mayor will face a daunting challenge of budget deficits ranging from $2.5 billion to $3 billion annually. And as government dollars dwindle, our citizens and neighborhoods are seeing less and less investment in public facilities. At the same time, the city needs to upgrade its decaying infrastructure to remain globally competitive. There is a solution. For decades, our policymakers have neg- lected a potentially lucrative vehicle for generating new-built public infrastructure: the city’s zoning code. Changing zoning to encourage developers to include state-of-theart municipal facilities in their projects could create new libraries, health care facilities and schools, with little impact on the capital budget. All would be built with private-sector expertise that ensures both quality and fiscal management. One approach would be to offer additional development rights—a “floor-area ratio bonus,” in industry jargon—for every square foot of municipal space built for the city. This would generate millions of square feet of free space for public use. Pro- ject priorities could be determined with input from stakeholders such as community boards, City Council members and city agencies. This idea is not new. When developers seek zoning exceptions, communities demand public benefits in return. Forest City Ratner’s Beekman Tower project in Manhattan was approved after the company agreed to build a public school and ambulatory care center. At its Dock Street residential project in Dumbo, Two Trees is building a public middle school. These are examples of value created by rezoning being translated into built public facilities. The mechanism by which this process plays out is often unwieldy, Why good ideas from a lame duck don’t fly T he last year of a mayor’s tenure is always difficult. The fate of three good ideas from the Bloomberg administration shows this year is worse than usual—a toxic combination, I believe, of the administration’s single-mindedness and the dynamic of the mayoral race. None of this is a good sign for 2014 and beyond. The latest idea was unveiled by Deputy Mayor Cas Holloway, who said in early April that the administration would never agree to retroactive pay raises for union workers even though their contracts expired years ago. Citing the city’s budget problems, Mr. Holloway said future raises can be financed only if workers agree to a more sensible health care plan that includes the kind of contributions state workers pay. He’s right on every count—but the union leaders could not care less. “Deceiving, ’’ DC 37 Executive Director Lillian Roberts said of the idea. “A total disgrace,’’ said Harry Nespoli, chairman of the Municipal Labor Committee. Both rejected the pay and health care proposals and intend to wait for the next mayor, who they believe will be a Democrat elected with their support. The second idea is also a nobrainer.The NYC Housing Authority would allow private developers to build retail space and new housing— GREG DAVID 20% of which would be affordable— on vacant land in its complexes to generate more than $50 million a year. The authority could use the cash: Its capital needs could be as high as $6 billion, and money from Washington and Albany has been disappearing for years. and the standards inconsistent. The public-policy rationale, though, is solid. So why isolate this opportunity to the few sites where developers seek discretionary actions? Why not incentivize or mandate that every significant development provide some public benefit? Obviously, this would not work for every capital-budget need. Private developers typically cannot integrate roads, sewers and bridges into their projects. Some outerborough neighborhoods lack enough development opportunities for the idea to take hold. And in historic districts and low-rise areas, adding density to pay for community amenities would be unpalatable. But in mid- to high-density areas, the public would hardly notice increased heights. The benefits of new community space would almost always transcend the social costs of a slightly larger project. Such a policy could save billions of dollars over several years, enabling the government to focus its funds on needier neighborhoods. The city’s zoning code has not been significantly altered since the 1960s, when “incentive zoning” was introduced. Now is the perfect time to revisit it and unlock some of its hidden public value. Tucker Reed is president of the Downtown Brooklyn Partnership. In early April, at a forum dominated by tenant activists from the authority’s complexes,the four leading Democratic mayoral candidates said they would kill the idea. The third is the rezoning of east midtown to allow the construction of a few modern office towers, desperately needed to provide the technologically advanced and energyefficient buildings required to keep the city economically competitive. The administration has been fending off critics ranging from midtown’s landmarked cathedrals to the Municipal Art Society. City Councilman Dan Garodnick, who could derail the plan, has been increasingly vocal about what he calls a “rush”to a decision.He also prompted an Independent Budget Office report last week showing delays in the Hudson Yards project are costing the city hundreds of millions of dollars. He could use the report to argue that east midtown should be delayed indefinitely because it would compete with Hudson Yards. The administration’s unwillingness to go quietly into the night should be praiseworthy, except it is starting to backfire. Its top-down approach doesn’t work when no one fears what could happen to him or her next year. Worse, the Democratic primary is being dominated by those opposed to Everything Bloomberg. The candidates are being pushed to do the same.Whoever is elected will have a hard time embracing the good ideas he or she opposed during the campaign. And that’s bad. April 29, 2013 | Crain’s New York Business | 11 http://crainsnewyork.com/newsletters http://facebook.com/crainsnewyork

Table of Contents for the Digital Edition of Crain's New York - April 29, 2013

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
REAL ESTATE DEALS
SMALL BUSINESS
OPINION
GREG DAVID
REPORT: EDUCATION
THE LIST
FOR THE RECORD
CLASSIFIEDS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crain's New York - April 29, 2013