Caveat to DeBlasio’s Grand Central Terminal Area Rezoning Would Require Special Permit for New Hotels

The impetus behind the rezoning plan allowing taller towers in the blocks surrounding Grand Central Terminal – specifically the five blocks of Vanderbilt Avenue from East 42nd Street to East 47th Street – is to keep New York competitive with office development in other major cities like London and Shanghai.

However, according to the Wall Street Journal, the hotel-workers union, which had a key role in the demise of a similar proposal under former Mayor Michael Bloomberg, has flexed its muscles once again, seeking a concession that would require any new hotels to receive a special permit from the City Planning Commission and the City Council.

The revised plan is more comprehensive with respect to the hotel component, requiring the special permit for hotels that are built, enlarged or converted from existing buildings; under the former administration’s plan it would have only applied to buildings that were at least 20% hotel space and were also taking advantage of the rezoning to build taller buildings than had previously been allowed.

Both the union and the city have their reasons for limiting hotel development in the area. Concerns that the surplus inventory caused by an uptick in new hotels would lead to shrinking room prices and diminishing profit margins, and thereby negatively impact the wages of its members are a top priority for the union. And as the city would prefer to keep that area primed for first class 21st century commercial space development, it has a vested interest in keeping those sites out of the hands of hotel developers.

While the proposal will make it more difficult for hotels to spring up in the rezoned area, it doesn’t restrict them completely. According to a spokeswoman for the Department of City Planning, the special permit will help to ensure that any hotels built will support the city’s objective by including “amenities and services that are complementary to a premier business district”.

[via The Wall Street Journal]