Real Estate Sounds Under Special Hotel Permits On A Citywide Scale


Gene Kaufman (Kaufman Architects, iStock)

Gene Kaufman (Kaufman Architects, iStock)

“Death knell” to hotels in Midtown. “Big Fu for the Rest of the World.”

These were just a few of the comments by real estate professionals on Wednesday about special permit requirements for new hotels across the city.

The Urban Planning Commission held hearings on a text amendment that would force hotel projects to issue a seven-month land-use survey. The proposal enjoys the backing of the hotel workers’ union and various elected officials, but has drawn the ire of land-use experts, developers and hoteliers. Urban planning representatives also raised doubts.

Gene Kaufman, an architect whose business is focused on working with hotels, said the move would effectively halt construction of hotels in the city, noting that a similar measure was already hampering projects in light industrial areas.

He called the app “New York’s big full for the rest of the world, saying ‘don’t come here,'” and said it would lead to an increase in the number of homeless shelters: hotels designed to temporarily accommodate homeless New Yorkers are tax-exempt … requirement for special permission.

This decision will shape the future of hotel construction in an industry devastated by the pandemic. According to a report by the American Hospitality and Housing Association, the city’s hotel market went into economic depression… In May, income per vacant room was $ 95, up from $ 249 in May 2019. State legislators adopted law this year to stimulate the transformation of hotels and office buildings into affordable housing.

At the start of the hearing, at least three city planners cite a lack of land use justification for the application. Commissioner Larisa Ortiz criticized the idea of ​​separating one type of use in commercial areas. Commissioner Alfred Cerullo III called this bad policy and said that “there is no evidence that there is actually a problem that needs to be corrected.”

Even if there was an excuse for land use, the devastation caused by the pandemic should take that off the table, Cerullo said.

“What kind of rational government would do this now?” in President of Grand Central Partnership the former city councilor asked.

Commissioners also suggested the possibility of creating a termination clause so that the city could allow it to terminate if it turns out to be problematic.

Several city councilors testified in support of the plan, saying it would provide community members with more information about what is being built in their neighborhoods. They pointed to quality of life issues such as noise and movement.

“I think having more community input is always a good thing,” said Brooklyn Councilor Justin Brannan, a running city council speaker. Councilman Antonio Reinoso, who was to become the next president of the Brooklyn area, said the explosion of new hotels “seriously affected the surrounding residential areas.”

Manhattan District President Gail Brewer, who objected to a previous attempt to restrict the construction of hotels in Union Square with a special permit, favored a citywide initiative. She noted that hotel unions are open to discuss Times Square reservations.

The union has supported Brewer’s campaign for the city council this year, as well as Reinoso’s bid for district president. Both won the Democratic primaries.

Ahead of Wednesday’s meeting, the New York City Real Estate Board presented a commissioned review of the plan. A study by planning consulting firm AKRF predicts a $ 37.8 billion contraction in construction-related economic activity between 2026 and 2035. The city will lose $ 8 billion in tax revenue and 75,000 permanent jobs during this period, the firm said. …

The analysis also warned that restrictions on hotel building could stimulate shorter-term rentals through Airbnb and other similar companies.

The city’s own estimates are that requiring special permits could cost the city $ 350 million in tax revenues by 2025 and up to $ 7 billion by 2035, according to the New York Times. According to City Planning’s final scope of work, the proposal will leave 47,000 hotel rooms in New York that are not meeting demand in 2035.

However, agency officials stressed the need for a “single zoning system” that ensures new hotels do not conflict with neighboring properties.

Chairman of the Urban Development Commission Marisa Lago

Chairman of the Urban Development Commission Marisa Lago

Off-screen, administration officials are more critical of the proposal endorsed by Mayor Bill de Blasio. In a note to City Hall last year, Marisa Lago, Chair of the Urban Planning Commission, reportedly warned that this “could be seen as contrary to economic recovery and sound planning.”

Some former city planning officials criticized statement for lack of justification for land use and posing a threat to industries that rely on tourism. Former urban planning spokesman Rachelle Rainoff denied the suggestion on Twitter on Wednesday.

Moses Gates, vice president of housing and neighborhood planning at the Regional Planning Association, testified that the proposal does the opposite of creating a single structure, instead establishing a “largely discretionary”, “ad hoc” approval process for new hotels.

He questioned the advisability of limiting the development of hotels, but not cemeteries, fertilizer producers, petting zoos, temporary carnivals and other purposes.

The mayor made the proposal a priority in what some see as a favor to the Board of Hotel Merchants, the only union backing his short-lived presidential race. Since special permits must be approved by the city council, the union will have leverage to facilitate new hotel mergers as a condition of approval.

Christopher Rizzo, a lawyer for the Board of Hotel Merchants, noted that commercial zones in the city are increasingly being used in residential areas, and said residents should be able to appreciate the design and quality of the hotel. He noted that he has a personal reason for supporting the restrictions on hotel development: he lives next to two “hot” hotels.

“There is a reason why hotels are not allowed in residential areas,” he said.

He called the city’s hotel market oversaturated and said that limiting new construction was critical to sustaining existing hotels.

The Board of Hotel Merchants funded a study by the Pratt Institute that supports the requirement for a city-wide special permit, arguing that it would allow officials to ensure that adequate social services are available in the event a hotel breaks down and is converted to affordable housing. income and homeless people.

The report warns that unrestricted hotel development could lead to an increase in “lower margins and less capitalized hotel operations,” which poses a “threat to the stability of the industry and its characteristic quality jobs.”

“The industry is already seeing a decline in revenues for available space,” the report says. “At some point, this decline will affect wages in the industry.”

Requiring additional permits could also help recruit local hotel staff and prevent land-use collisions, according to a union-funded report.

The city previously took a gradual approach to curbing hotel development by making special permits mandatory in certain areas, including Midtown East, the Garment District, and light industrial zones. The City Hall rejected a similar proposal for Union Square in favor of a city-wide version. Hotel owners and developers argue that special permits hold back hotel construction because special permits add months and costs to the project’s lead time.

Paul Selver, an attorney for Kramer Levin, who called the proposal “death knell,” said the cost of passing the project through the City’s Unified Land Use Review Procedure could be as high as seven figures. If this process leads to hotels with unionized personnel, operators will have to pay higher wages.

“You really don’t want to get involved in a process where you end up being voted for or against on issues that have nothing to do with land use,” he said during an interview. “And that’s what happened.”

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