NEW YORK | Midtown East - Vanderbilt Avenue Rezoning

Continuing the discussion from NEW YORK | Midtown East Rezoning:

City Plans Midtown East Rezoning to Aid Tower

Rezoning of Five Blocks Would Spur Office Building by Developer SL Green

Updated May 29, 2014 10:20 p.m. ET

The de Blasio administration is proposing to rezone the five-block street that borders Grand Central Terminal, clearing the way for a 65-story tower in the heart of the aging office district, according to people familiar with the matter.

City officials have discussed rezoning Vanderbilt Avenue, which stretches from East 42nd Street to East 47th Street. That would allow SL Green Realty Corp. SLG +0.50% to build the 1,200-foot tower it calls One Vanderbilt, according to the people familiar with the matter.

The administration then would move forward with the rezoning of the rest of Midtown East, in a process that would include more community consultation. That effort would be led by City Council member Daniel Garodnick, who represents the area, and Manhattan Borough President Gale Brewer, people familiar with the matter said.

In the final days of his administration, former Mayor Michael Bloomberg withdrew a proposal for Midtown East to allow about a dozen new office towers. It had drawn vigorous opposition from community leaders, including Mr. Garodnick, who said the administration was moving too quickly. By carving out the least controversial project before broader changes are considered, Mayor Bill de Blasio is trying to avoid the political problems Mr. Bloomberg faced with Midtown East.

SL Green, which owns the block bounded by Vanderbilt and Madison avenues and by East 42nd and East 43rd streets, is in talks with Canadian financial firm Toronto-Dominion Bank about leasing a large amount of space at One Vanderbilt.

The new tower and other developments in the area would still have to seek approval from the City Planning Commission and City Council to build to the maximum height allowed under the new zoning rules, according to the people familiar with the matter. The decision would be based partly on the quality of transportation improvements that developers promise to make, the people said.

Administration officials are in the final stages of consulting with community leaders, real-estate interests and local politicians about the proposal. A formal announcement could come as early as Friday, according to the people familiar with the matter.

The rezoned area would also include former Metropolitan Transportation Authority sites at 341, 345 and 347 Madison Avenue, according to a person familiar with the matter. It also includes Yale Club of New York City, which occupies a 22-story neoclassical building.

Under changes initially proposed by the Bloomberg administration, Vanderbilt Avenue would have been made into a pedestrian plaza. Under the new proposal, the pedestrian area would cover just the portion of the avenue between 42nd and 43rd streets, according to a person familiar with the matter.

Under the Bloomberg proposal, the densest development would have been in the area immediately surrounding Grand Central, including Vanderbilt.

At an event last week hosted by the Citizens Budget Commission, Deputy Mayor for Housing and Economic Development Alicia Glen said that within a couple of weeks the administration planned to announce a time frame for the rezoning. She said the administration wanted to allow time to create consensus around the proposal, which would like take a year or two.

But she also said it was working with SL Green to ensure the developer’s project can proceed in a timely way.

“And that’s a project that they also have identified a very high quality tenant that we would very much like to see come to New York. And so we’re actively in discussions with them, with Councilman Garodnick and the planning department about how that can move forward to meet the timeline of that,” she said.

Stephen Green, chairman of SL Green, is a prominent political donor in the city who gave money in the 2013 election to mayoral candidates Christine Quinn, Bill Thompson and Anthony Weiner. He also donated to Mr. Garodnick. He didn’t give money to Mr. de Blasio’s campaign, according to campaign-finance records.

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