Developers cite encouraging climate in city.

Two developers and a city official outlined recent private development efforts and city streamlining programs that are setting a new tone for development opportunities in the city. They spoke to a large gathering assembled for the Real Estate Board of New York's Spring luncheon at the Hilton Hotel last month.

Fran Reiter, deputy mayor for Planning and Community Relations, reflected on the Giuliani administration's first 15 months in office and its goals of getting things done.

Developer Howard P. Ronson outlined plans for the redevelopment of 383 Madison Avenue into a technologically sophisticated new building. He explained the deficiency of such space for financial services users and the need for incentive programs to bridge the gap between costs and rents.

Philip Aarons, a partner with Millennium Partners, discussed his successes with the mixed-use Lincoln Square projects in a stalled real estate market because his group was able to target the unfulfilled needs of end users.

Reiter, the lively deputy mayor who REBNY president Steve Spinola calls "a joy to work with," cooperated with the real estate industry to implement business - friendly programs. She admits the administration has an attitude "that government is here not to hinder but to help, not to build brick walls but to tear them down."

But Reiter cautions that if the city is to be compassionate and take care of all the people in need, "somebody has to foot the bill for that."

To do that, the city needs to be a place where business can get done and where jobs can be created. Permitting processes are being made easier through "one-stop" shopping that is already a success in the outer boroughs and is coming to Manhattan soon. The city is moving to reform the environmental review process and is trying to limit the placement of adult entertainment venues.

The administration is trying to implement as-of-right retail for up to 200,000 square-foot stores, lower the unincorporated business tax, lower the commercial rent and occupancy tax and create a level playing field as well as a new business environment.

In the Downtown Manhattan area, the Mayor's Task Force "has created a short-term program to address the Lower Manhattan economy and a long-term program that requires major investment to address the problems of an aging building stock."

The programs include residential and mixed-use conversion, tax abatements, commercial rent tax exemptions, and the extension of the Industrial and Commercial Incentive Program. "Not one problem with one answer but many problems with many answers that must work in concert with each other," Reiter explained.

Working together, Reiter concluded, the administration recognizes that "business must thrive for the city to thrive, we must have new jobs, new economic activity, new involvement for New York City to remain the word class city that it is today and it has always been."

The need to pay attention and improve the quality of the city's buildings is something that Ronson, international chairman of HRO International, agrees with. He said he is encouraged that the city now has an administration that recognizes the needs of business.

Ronson cited problems in older business districts, particularly Downtown, but noted there is a supply imbalance for those tenants - such as banks and intentional financial services - that must have modern, high-tech facilities.

He also described plans for 383 Madison that will include 16-foot slab-to-slab floors and clear, column-free space with redundant backup systems to maintain good life safety support as well as daily needs. Buildings have populations greater than small cities, he noted. Under new smart building requirements for the proposed ICIP, Ronson's plans would qualify for benefits.

The developers of Lincoln Square took advantage of other incentive programs as well as the needs of the end-users at a time when construction had come to a standstill and there was an extremely limited amount of debt and equity available to the real estate community.

"It wasn't a question of doing things radically new," explained Philip E. Aarons, a partner with Millennium Partners, the developer, "but putting them together in a new way."

The small development company worked with a "truly spectacular site," of 55,000 square feet just north of Lincoln Center. "Most people said we were stupid; we saw opportunity," said Aarons.

By assembling a development team to move the project forward, Aarons noted, "We were able to pull off the deal, but a lot of people were prepared to take a chance to work with us to see if we could do something that was a little unusual."

The group attracted Loew's theaters - now Sony - and gave them space above the second floor for theaters and the special 3D-Imax that takes up a 100 square-foot cube. The Reebok Sports Club committed to: six floors on the other side of the building.

To attract the Japanese, they created a block of apartments that began 450 feet up. "We had pre-sold over 210 of 300 units...before we started construction," Aarons recalled. But looking at today's strong residential market, he quipped, "Unfortunately, now I'd love to have them all back." In fact, the developers recently rented out the remaining apartments at $42.50 a square-foot, achieving among the highest numbers in the city.

To become a successful developer, Aarons advised, "be creative, meet the tenants' needs and speak to owners, talk to users, find out what they want and build what they want."

It's a great time to develop, he continued. "I think it's a time when things can get done," he said, and referring to the city's administration, Aarons added "I think there's a new mood to want to get things done."