Apr
01

One Vanderbilt — and GCT upgrades — inching closer to reality

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The Grand Central subway's mezzanine level will see more space as columns are narrowed. (Via KPF)

The Grand Central subway’s mezzanine level will see more space as columns are narrowed. (Via KPF)

When last we checked in with plans to rezone Midtown East and build up a new tower across the street from Grand Central, we delved into the fancy renderings of the transit improvements. The carrot of $200 million in badly needed upgrades to the Lexington Ave. IRT stop at Grand Central is a hard one to resist, and I’ve been supporting this project from the get-go. As my office is now a few blocks away, I’ve seen the Modell’s empty out, and the building be prepared to be replaced.

Now, the effort is one step closer to reality as the city’s planning commission has approved the necessary rezoning. The whole project isn’t out of the woods yet as it heads to the full City Council, and the Council is sure to push for changes. But it seems more likely than not that we’ll get a tall building across from Grand Central and a far more pleasant subway experience thanks to it. More platform space, better passenger flow and easier access from street level all funded through developer contributions are all part of the deal.

Ryan Hutchins had more:

The biggest obstacle for the so-called Vanderbilt Corridor remains: Passage by the City Council, which is likely to push developer SL Green Realty Corp. to alter its plans for a 1,400-foot-tall commercial skyscraper…While de Blasio’s [rezoning] pitch has not met fierce resistance from community board members and local elected officials, it has been repeatedly attacked by the relatively unknown owner of Grand Central Terminal, Andrew Penson.

His worry? That the rezoning, which will allow developers to fund public improvements in exchange for permission to construct bigger buildings, would devalue the air rights above the landmarked terminal. For example, SL Green would receive additional floor area for its tower, One Vanderbilt, by making about $210 million in improvements in and around Grand Central.

…Specifically at issue, [Council member Dan Garodnick] said, will be whether the $210 million in work SL Green has committed to is enough to warrant the bonus the company will receive. “We just have to throw that onto the scale against a 30 F.A.R. building,” Garodnick said.

To me, this is a potential model for future transit improvements, and the City Council shouldn’t ignore this reality. For the MTA, it’s a new model that encourages public-private partnerships and allows the MTA to fund work it wouldn’t otherwise have the money to perform. Especially at Grand Central — the second busiest station in the system — the dollars will have an immediate impact on a problematic customer experience.

We’ll know soon enough what the future holds for this project, but after Community Board approval and a planning commission okay, it’s likely to pass the City Council in some form or another. The station improvements alone will be a welcome element.



Categories : Manhattan

13 Responses to “One Vanderbilt — and GCT upgrades — inching closer to reality”

  1. lawhawk says:

    The GCT terminal owner’s concerns about devalued air rights seems misplaced. The value is likely to increase but this is more a bargaining tactic to increase the value of the GCT air rights so he can get more for it from any potential developers in the surrounding blocks.

    • Gary says:

      Definitely. Articles have already been written about my building on 43rd potentially being razed for a similar tower, using air rights from GCT.

      http://nypost.com/2015/03/03/v.....new-tower/

      In any event, I’m looking forward to the station improvements.

    • SEAN says:

      Agreed. GCT becoming less valuable do to a new office tower across the street is the most ridiculous statement until one realizes that it’s just an air rights play & Grand Central will get it’s turn soon enough.

      If you think about it for a second – how more valuable would the blocks in the west thirties be if Penn Station were still standing today? Not just upzoning mind you, but the Garden could still had been built in the same general area without hampering with Penn Stations functionality. And who knows – Hudson Yards could have been developed already with better transit access.

      Oh well – such as life in NYC.

  2. Thomas Graves says:

    Here I think you’re being pretty naive. Given what any transit work costs in NY, $200M won’t go very far in terms of improvements. A few wider staircases, new escalators, paint job, some new lights maybe. More importantly, pay attention to what the $200M WON’T buy: any more capacity. Same number of 4,5,6,7,S trains on the same platforms. But now across the street will be a towering office building with thousands more people than are in the old (but classic) building that SL Green will eagerly demolish. So the result of this “model for the future” will be a vastly more crowded Grand Central subway station (and just wait until the same happens with other old buildings around the station). The developer will get billions in additional rental income in return for a paltry $200M of renovations which do nothing to address the core problem of overcrowding. I’m surprised you’re taken in by this fraud.

    • The other realistic outcome is a tower without additional money for subway improvements. I don’t see how that’s better. Are you proposing extracting more money from developers here?

      • SEAN says:

        You could always try to extract more money from developers, but at some point those developers will take their balls & go home. The end result will be… no upzoning or transit improvements. If each developer pays about $250Million or so per project, the windfall could be quite substantial & benefit everyone.

        • Bolwerk says:

          That point is when the opportunity cost of foregoing other projects is no longer exceeded by the benefit of pursuing the PPP.

          In the midst of a building boom, it might be a bad time to finance these kind of station expansions since those types of developers probably do have other projects to pursue and can get away with charging premiums. OTOH, it’s a good time to borrow to finance new lines because financing costs are nonetheless rock bottom right now.

          Maybe when the current building bubble bursts, these types of expansions could be made cheaper as developers compete for the contracts to them – and maybe even would be willing to lose some money on them to keep themselves from being idle.

          • SEAN says:

            Fair enough. But at some point, the MTA will need to be able to extract value from real estate in some form & put it into service & station improvements. If they cant do it on their own, then they need to go via the PPP or do it in a similar way to BID’s such as the 34th Street Partnershipwhere all buildings & businesses pay an annual fee to add external value to there respective areas. In this case the entire MTA network. In a sense it does this already with a small fee on phone bills & real estate transfers, but direct real estate activity would draw greater revenues with direct tangible benefits.

      • Thomas Graves says:

        Exactly. Something on the order of several billion dollars from SL Green, Extell Development, Related and all the other developers planning similarly massive buildings at 341 Madison, Roosevelt Hotel site, and a bunch of others, which could be used for the 2nd Avenue Subway Phase III. Sure, a spruced-up Grand Central subway station is better than a filthy old one, but it’s the crowding that make that station both so unpleasant (maybe even dangerous on the platforms).

    • Eric says:

      If a private company is running it, $200M will buy a lot more than if the MTA is running it.

  3. JEG says:

    For an agency struggling to close a $15 billion funding gap, $210 million is not an inconsequential amount of money (1.4 percent of the gap). Indeed, it is easy to imagine seeing this a means of funding continuing phases of the Second Avenue subway. There has already been discussion of upsizing the buildings along Park Avenue from GCT through the East 50s. By extracting similar amounts from developers of those sites, could be used to fund phase three of the subway’s construction. This would solve, in part, the problem of handling additional commuters into this area.

    • SEAN says:

      I’ll also add, a redeveloped Penn station could have a similar effect on the west side. The moneys are there, you just need to structure the transactions the right way to get the deals done.

  4. Scott E says:

    I’m used to not believing anything written on this blog on Apri 1, but this one is quite plausable (though any word of improvements to the subway gets met with cynicism, if not skepticism). I’m not sure what to make of this one. I suspect it’s real, but I’m still a bit worried about getting played.

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