Some opinions on what this could or should mean for Midtown east...
http://forum.skyscraperpage.com/newr...te=1&p=7097080
Can One Vanderbilt be a Midtown East catalyst?
Rezoning could spark new era of office construction near Grand Central
July 01, 2015
By Ariel Stulberg
Manhattan office vacancies are low and prices keep rising. But while the fast-growing technology and media sectors colonize Midtown South, and new construction at the World Trade Center and Hudson Yards draws major corporations to Downtown and Midtown West, one traditional office center is lagging.
Midtown East, with its aging office buildings and infrastructure weaknesses, has seen little new development and few marquee tenants signing high-profile leases recently.
The Real Deal spoke to developers and brokers knee deep in the Midtown East market to suss out whether the new tack represents a path forward for the neighborhood, or a marginal one-off that won’t address larger issues.
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William Montana
Senior Managing Director, Savills Studley
What impact do you think SL Green’s tower will have on the surrounding area? What other development are you expecting in that five-block area?
The new tower will bring much needed modern office space to an area that has very old, outdated building stock. Larger companies, in particular, require large floors, efficient space and “green” space with light and air. The new tower will also add a shot of vibrancy to a stodgy, older area. With regard to other sites in the five-block area, the Milstein property at 335 Madison Avenue is a prime candidate to be redeveloped.
...Do you think any rezoning should allow for residential development?
This is not the place for residential development. This is a commercial area and needs to be preserved for that use. Grand Central is one of the main transportation hubs and it’s essential that modern office space be located near that hub, so that commuters can easily get to and from work. Residential development does not need to be so close to a transit hub.
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Eric Anton
Senior Managing Director, HFF
What impact do you think SL Green’s tower will have on the surrounding area? What other development are you expecting in that five-block area?
I think it’ll have a very big impact. I’ve spent 95 percent of my career within a two-block radius of Grand Central. I love Grand Central. But clearly, we need to upgrade the office space and the transportation access points need refurbishment. I think it will have a great impact in attracting more of the [financial, insurance and real estate] industry and hopefully, the TAMI industries too. There are two development sites that I know of. Both are confidential and in the site assemblage mode.
What do you think of de Blasio’s approach to rezoning and his timeline?
I think it is reasonable to request from the private development community a bigger payment for the additional air rights. That being said, we shouldn’t make it too onerous or too complicated. Even though we’re in a boom time, planners need to make sure the process is streamlined. Otherwise, we’ll delay and delay and delay, and may be out of the boom time before anybody can build something.
Do you think any rezoning should allow for residential development?
The current zoning allows for residential. If one wanted to build an apartment building right in the center of the Grand Central district, you could do that. I would like to see more residential, though the primary function of Midtown and Grand Central is office. I don’t see it as a future family-type neighborhood. But pied-á-terres and very high-end, luxury small apartments … would be an excellent compliment to Midtown’s 24/7 nature.
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Seth Pinsky
Executive Vice President, RXR Realty
What do you think should be done zoning-wise with Midtown East?
The administration and City Council should move as quickly as they can to clarify the direction in which they intend to proceed with respect to zoning. Additionally, to the extent that they propose changes (which I believe to be necessary to ensure continued investment in the area), the administration and Council should focus on how to keep this area, first and foremost, a commercial district, generating the jobs, economic activity and tax revenue that are so critical to the continued prosperity of our city.
Do you think any rezoning should allow for residential development?
While creating more housing in the city is, appropriately, a priority for the de Blasio administration, it should not be its only priority. It is becoming increasingly difficult for businesses in the city (especially small businesses) to find reasonably priced real estate. In the long run, the squeeze on businesses and the jobs that go with them will have as pernicious an impact on the ability of New Yorkers to afford to live in the city as the rising cost of housing. We, therefore, must focus — especially around our most important transit nodes — on preserving and expanding the overall supply of commercial space.
Do you think there’s tenant demand for more new Class A offices in Midtown East given all of the new and planned office space at the World Trade Center, Hudson Yards and Manhattan West?
New York City contains approximately 400 million square feet of office space. This total has not changed meaningfully in many years, due to residential conversions and the horrible events of 9/11. The projects Downtown and on the West Side only begin to make up for the dearth of modern supply that has come to market in recent years. Because of its incredible transit accessibility, regardless of what happens elsewhere in the city, there will always be interest in Midtown East, provided that there is modern office space in the area to accommodate demand.
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A. Mitti Liebersohn
Principal and President, Avison Young New York office
Do you think the “Vanderbilt Corridor” carve out for SL Green was justified and do you think developers at other nearby sites could make the case for getting on that same fast track?
The carve out is in line with prior plans for the area, and given that it delivers first-class office space to an area that has demand, the rezoning was appropriate. The only remaining “corridor” sites that would seem to have real “fast track” potential are located on the block between 44th and 45th Streets, where the MTA already controls half the block, and, to a lesser extent, the Roosevelt Hotel.
How many development sites do you think exist in the Midtown East district? How many new office towers would you like to see in the next 10 years?
There are approximately 18 potential development sites that have been identified. Given that most of those are buildings encumbered with commercial tenant leases, it will take close to 10 years just to gain occupancy of a typical site and to commence a project, unless significant buyouts occur.
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Dana L. Moskowitz
President, EVO group
What impact do you think SL Green’s tower will have on the surrounding area?
The new tower will definitely have a significant visual impact on the Vanderbilt Corridor, and will enhance people’s perception of the area. A successful leasing campaign of the SL Green tower with rents near and above the triple digits will spur additional development opportunities.
What do you think should be done zoning-wise with Midtown East in general and why? Are you concerned that not rezoning it, or doing it in pieces, could hold up development?
Zoning changes must allow for larger buildings to accommodate today’s tenancies. Doing it in pieces could work, as long as there is continuity. Not making any changes would definitely be to the detriment of the area.
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Chris Helgesen
Executive Vice President and Managing Director, DTZ
How many development sites do you think exist in the Midtown East district? How many new office towers would you like to see in the area?
The current main development sites in the Midtown East district are at varying stages. At 390 Madison Avenue, there is a $240 million construction project underway, which is an as-of-right development to add 8-10 stories at the top of the building and increase the ceiling heights. There are other potential development projects at 425 Park Avenue, the Solow site on the East River between 36th and 41st Streets and the Roosevelt Hotel site on Madison Avenue between 45th and 46th Streets. Clearly, a rezoning will add additional projects to the pipeline, and I would like to see as many new office towers in this area as the market bears.
Do you think there’s tenant demand for more new Class A offices in Midtown East given all of the new and planned office space at the World Trade Center, Hudson Yards and Manhattan West?
There is always demand for new Class A office space. Our research predicts that evolving market fundamentals in the near term will see supply diminish across Manhattan, despite new construction. Demand will be slightly greater year-to-year as an effect of job growth, and rents will therefore increase. This may justify the decisions to move to new or re-constructed office product. WTC, Hudson Yards and Manhattan West suffer from transportation issues. They’ve been resolved in part, but travel distance cannot be eliminated. Midtown East is convenient because it’s central, and will be improved with the Second Avenue subway line.
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Excellent idea!! 
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