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New York Developers and Unions Seek Eased Limits on Midtown Projects
Jan 31st 2013, 19:01

In recent years, the real estate industry has clashed repeatedly with unions in New York City over wages, work rules and its favorite development projects.

But now, prominent developers have forged an unusual alliance with labor and the construction industry to lobby for rules to allow a new crop of skyscrapers around Grand Central Terminal.

They are seeking to go further than the Bloomberg administration, which has proposed zoning changes that would enable developers to build office towers in some cases twice the size currently permitted. The new alliance is pressing the administration to loosen its proposed rules so that more skyscrapers can be built on more sites, at a quicker pace and at a lower cost.

Mayor Michael R. Bloomberg has said the densely built-up neighborhood's position as the city's premier office district has been undermined by zoning rules that curtail the height of buildings and discourage placing new towers where the average age of buildings now is 73 years.

Community boards, preservationists, elected officials and the Municipal Art Society have urged the city to slow down and do a rigorous assessment of the impact of more tall buildings on an already congested area. They say they fear that the proposal could lead to the demolition of historic buildings to make way for towers that would cast shadows over landmarks, like the Waldorf-Astoria and the MetLife Building.

In a letter dated Jan. 25 to Deputy Mayor Robert K. Steel, who is spearheading the rezoning effort, the alliance, called Midtown 21C: Coalition for a Globally Competitive NYC, vowed to "aggressively advocate for the passage of a rezoning plan for Midtown East, along with the proposed improvements to the plan that we have suggested."

The letter was signed by officials from the Real Estate Board of New York, the powerful lobbying arm of the industry; the New York Building Congress; the Building Trades Employers Association; the Manhattan Chamber of Commerce; and three labor organizations: Local 32BJ Service Employees International Union, the Building and Construction Trades Council of New York and the Hotel Trades Council.

No one involved in the debate disputes that there is a need for modern office towers in the 70-block area surrounding Grand Central. The discussion has been over the best way to encourage new development and how to pay for the improvements to streets, sidewalks and transit links that then would be necessary.

After meeting with real estate executives, the city's Planning Department unveiled proposed zoning changes last year and hopes to have them approved by the City Council in October. It is trying to complete the rezoning in less than half the time spent on the West Side's Hudson Yards rezoning, which was adopted in 2005 after five years' work, or the Hudson Square rezoning downtown, which is in its fifth year.

The administration's plan would allow developers, under certain conditions, to build taller, more efficient office towers. Developers would be able to buy development rights for the towers from the city and later from the owner of the development rights over Grand Central.

Planning Department officials have played down the impact, saying the new towers would go up over a long period of time and add only four million square feet of space and 16,000 employees to a neighborhood with 230,000 office workers.

At a breakfast forum on Tuesday sponsored by Crain's New York Business, City Councilman Daniel Garodnick, a Democrat who represents the district, said the city was on the right track. But, he added, new office space is only part of the equation. There is a need for $400 million worth of improvements to Grand Central Terminal today, he said, let alone when new towers are erected nearby.

The city's plans to raise money for those improvements are uncertain, he said. And there may not be enough time before October to calculate the full effect of the zoning changes. "Pace is an issue for us," Mr. Garodnick said. "The Council is not going to get boxed in here."

Nervous that the Council could scuttle the proposal and eager to make changes to the city's plan, the real estate industry decided to build a united front with unions representing construction, building maintenance and hotel workers.

Real estate executives credit Rob Speyer, a developer and the new chairman of the Real Estate Board, with the new strategy.  

"Business and labor have a lot of common interests," Mr. Speyer said. "We want to focus on our common ground. We're sending a strong message to elected officials that labor and business are united on a given issue."

 Mr. Speyer and Hector Figueroa, president of Local 32BJ, plan to jointly interview prospective mayoral candidates in the coming months about economic development, job creation, affordable housing and immigration reform. Thirteen months ago, the union and real estate owners were engaged in contentious contract negotiations.

"Both industry and unions have political clout for different reasons," Mr. Figueroa said. "To the extent we can identify issues that we can agree on, so much the better."

But he cautioned that the two sides "may not end up endorsing the same candidates."

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