Mitchell Korbey, partner and chair of land use and zoning at Herrick
New York City’s zoning resolution includes many outdated and burdensome regulations, but the recently adopted City of Yes plan dramatically altered the zoning landscape by softening dozens of stringent building requirements, making it easier for developers to build apartments.
Initially proposed by the New York City Department of City Planning and then adopted with only minor amendments by the city council, the City of Yes targets not only housing affordability but also other obstacles to new construction, such as parking mandates, building height and yard requirements, and restrictions on office-to-residential conversions.
Herrick, Feinstein LLP, a law firm that has been in NYC commercial real estate for nearly a century, welcomes these changes that it regards as needed to accelerate new housing development.
“If you look at the zoning changes, each individual item may appear minor, but as a collective, this is a big deal for NYC,” said Mitchell Korbey, partner and chair of the land use and zoning practice at Herrick.
Bisnow’s New York Conversions and Adaptive Reuse Conference will be at the New York City Bar Association on Feb. 27. The event will explore how the changes in zoning regulations can move the needle. Robert Huberman, a Herrick partner for land use and zoning law, will moderate a panel on executing conversion and retrofit projects. Register here.
Bisnow spoke with Huberman’s team member and practice Chair Mitchell Korbey about conversion and retrofit trends he is seeing in NYC, what clients should look out for before starting construction, and how Herrick is helping them navigate the recent zoning changes.
Bisnow: What trends are you seeing with conversions and retrofit projects in New York City?
Korbey: The city has permitted conversions for many years, and we've seen a lot of them. One of the reasons why we have 30,000 people now living downtown is because older office buildings have historically been permitted to be converted — even though these buildings were never intended for housing and were not built with residential zoning compliance in mind. What the City of Yes zoning changes will do is permit those conversions for more recently constructed buildings throughout the city.
Bisnow: What will be the hot topic at Bisnow’s New York Conversions and Adaptive Reuse Conference?
Korbey: A critical zoning change that will complement the City of Yes is the proposed rezoning of Midtown South and Long Island City. These areas are presently zoned where manufacturing and housing are prohibited. There is little, if any, industrial use remaining, and the planning department has recognized it is time to allow for change, including new, high-density residential buildings. Since there are scores of older office buildings in these areas, the rezoning plan with City of Yes regulations in place will allow for many conversion opportunities.
The other topic that will be discussed is the property tax abatement program that's available for conversion called 467-m. The program will make several conversions viable that might otherwise be challenging economically because of the costs of converting to residential. Of course, using the program requires including affordable housing in the converted building, which is an added challenge.
Bisnow: Could you discuss the urban planning process in NYC today and how it affects build-outs?
Korbey: New York continues to be an “as of right” town where property owners simply follow the zoning rules and obtain a building permit. A discretionary site plan review, which is prevalent in many cities, is not required. Zoning changes that property owners seek can be challenging and time-consuming but may be necessary if a project cannot be viably constructed on an as of right basis.
When discretionary approvals are needed, the city can help expedite projects by working with owners to streamline the public review process. It is helpful that the city has a fast-track program for larger projects with an affordable housing component. Still, there exist many opportunities for rezonings to facilitate new housing, and these should be prioritized.
Bisnow: What advice do you have for clients to help them successfully execute retrofit or conversion projects?
Korbey: It’s important to have an architect on board who understands building requirements and how to creatively retrofit a building. This is particularly critical with larger floor plates when access to light/air is challenging. Further, many older office towers are designated landmarks, so working closely with an architect and preservation specialist is important.
Also, I recommend having a land use lawyer involved who can help coordinate and collaborate with the architect. Looking over each other’s shoulders is key because zoning rules remain very complicated, and it's easy to miss the small details. Finally, it's good to have someone on board who understands the 467-m program and can work with the client and owner on understanding the nuances of that program to see whether or not a conversion is viable. Herrick has specialists in this area.
Bisnow: How has Herrick been a part of these types of projects and helped its clients navigate through zoning regulations like City of Yes?
Korbey: Given the complexity of the new rules — as well as nonzoning requirements such as landmark designations — we work to educate our clients on the big picture and the small details while also navigating them through the process. Critically, Herrick has great relationships with city government and can reach out to the appropriate officials to answer questions when something might be ambiguous. This is important since the rules are complicated and were recently drafted, and there will inevitably be questions about interpretation. We help clients with resolving those gray areas.
When clients need a rezoning or when a project is not as of right and a special permit is required or if they have to work with the New York City Landmarks Preservation Commission, we can help strategize a plan and treat each project like a mini-campaign. We like to think holistically about a new matter. We aren’t running a person for office — we are running a project for office.
We also spend a fair amount of time working with our lender clients on zoning and land use regulations, since before lending money to a developer/borrower, it is important to appreciate the rules governing development.
Bisnow: How will Herrick continue to help clients in this rapidly growing sector?
Korbey: We try to anticipate the changes by letting clients know that a particular area is likely to be rezoned or if a particular property is a good candidate for rezoning. We also advise them to think about areas that might be good investment opportunities.
We keep our ears close to the ground, and we maintain close ties with the city so that we are aware of proposed changes and know when to warn folks or get them excited about future opportunities. One example of this is, long before the Gowanus Canal was rezoned, we were involved in understanding what might happen there and helped advise clients on how and where to invest.
I'm looking forward to witnessing how the City of Yes and the new rezonings transform neighborhoods, creating new density, new housing opportunities and hundreds of units of affordable rental units.
Click here for more information about Bisnow’s event in NYC on Feb. 27.
This article was produced in collaboration between Herrick, Feinstein and Studio B. Bisnow news staff was not involved in the production of this content.
Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.
