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Members honor mandate to make city the best it can be.

Throughout the year, REBNY and its executive committee members have worked with the city on a whole host of issues aimed at imporving life for everyone who lifes here.

The following highlights just of few of the topics debated, discussed and deter mined ...

Greater East Midtown

The Greater East Midtown rezoning was enacted in August, establishing a plan to revitalize this premier commercial district by increasing allowable floor area for the development of new office buildings. The rezoning establishes a mechanism for landmarked properties that are landlocked to transfer unused development air rights to office buildings within the district, conditioned upon a contribution to a fund for the creation of public realm improvements.

These improvements will enhance subway stations and transit service in the area, while expanding public open space.

REBNY played an active role in this rezoning. We served as a member of the East Midtown Steering Committee, which established a framework for the plan, and continually advocated for modifications to the plan on issues including light and air rules, enlargements, and mid-block development. These modifications would ensure that the maximum floor areas permitted were achievable as-of-right, and that restrictions proposed by community groups and elected officials did not constrain development and the market for air rights.

The rezoning plan will enhance New York City's ability to recruit international talent and maintain our competitive advantage. Delivering a fully revitalized and competitive East Midtown in the coming decades will ensure that this area remains one of the world's preeminent business districts.


In February of 2017, REBNY partnered with Mayor de Blasio to launch the NYC Carbon Challenge for Commercial Owners and Tenants.

REBNY recruited new commercial owner and tenant participants to work together to identify strategies for the coordinated implementation of energy efficiency projects and the reduction of greenhouse gas (GHG) emissions from their buildings by 30% or more, within ten years.

In September, the de Blasio Administration announced intentions to bolster its effort to reduce greenhouse gas emissions 80% by 2050, with an ambitious plan to mandate fossil fuel use limits on commercial and residential buildings over 25,000 square feet. The plan will take effect in 2030 and mandate specific fossil fuel use limits based upon building typology. Those buildings exceeding the use limits will face severe financial penalties. Buildings with at least one rent stabilized unit will be similarly affected, but the fossil fuel use limits will not be mandated until 2035.

The breadth of this mandate will disproportionately affect multifamily buildings as these assets are predominantly powered by natural gas and oil. Many of these buildings switched to natural gas when heating oil No. 6 was phased out in 2015.

Throughout the fall of 2017, REBNY met with the Administration and City Council to stress the unintended consequences of these mandates. It's uncertain at this time how much of New York City's electrical grid will consist of renewable energy sources with the imminent decommissioning of the Indian Point Energy Center in 2021. Legislation to mandate such fossil fuel use limits was introduced in November 2017 and will be taken up in the City Council in 2018.

In the coming year, REBNY will continue to forcefully advocate for the industry on these issues. We will meet with relevant stakeholders to express our concerns over the unintended consequences of this legislation and the need to identify appropriate metrics to measure energy efficiency.

421-a Certificate of Eligibility

At the end of 2016, the Department of Finance (DOF) sent letters to approximately 3,000 owners of 421a projects, notifying them that they must receive a Final Certificate of Eligibility (FCE) from Housing Preservation and Development (HPD). Failure to receive an FCE would result in a suspension and revocation of the project's 421a tax exemption benefits.

Tax exemption benefits for new 421a projects commence when an owner completes a Preliminary Certificate of Eligibility (PCE), which includes a project's basic eligibility requirements. The project's tax exemption benefits continue upon completion in anticipation of the project receiving an FCE.

For a variety of reasons, FCE applications were not finalized in a timely manner and the processing effectively halted. With the resumption of the processing of FCE applications, REBNY has been working closely and diligently with its members, as well as the DOF and HPD, to ensure that the applications are completed and that no project actively pursuing an FCE will have their benefits suspended or revoked.

Commercial Waste Zones

Sanitation released the findings of a feasibility study to create geographic zones throughout the city where commercial waste could be collected by one waste management company in each zone. The study found that such a zone system could decrease pollution and congestion, promote worker safety, and stabilize costs across all consumer categories. Embracing the study, the Department embarked in late 2016 on a multi-year effort to implement such a system.

New York City abandoned a similar "franchising" system in the 1990s before it could be implemented. The concerns about stifling competition, soaring costs, and unmet service needs were overwhelming.

While REBNY supports the purported policy goals of the commercial waste zones, we believe that the goals can be achieved Without implementing

Construction Safety

REBNY believes that every construction worker should receive safety training.

In January 2017, the New York City Council introduced the Construction

Safety Act, a package of 21 bills impacting worker training, prevailing wages, site safety, crane safety, civil penalties, and reporting requirements. The Act was designed to address the increasing incidents of accidents and fatalities on construction sites.

Many of the Act's bills reflected construction safety best practices and recommendations identified in REBNY's Construction Safety Report issued in March 2016. REBNY supported bills requiring pre-task safety meetings, site-specific orientations, and site safety plans for all workers, personnel for smaller projects, and lift directors on crane operations.

Much focus was placed upon the Act's centerpiece bill, Intro 1447, which required workers on all major building sites of ten stories and above to be enrolled in, or graduates of, apprenticeship training programs. REBNY testified against this bill in January, at the only hearing that the Committee on Housing and Buildings convened on the Construction Safety Act. REBNY argued that Intro 1447 would throw tens of thousands of construction workers off of sites and out of work since apprenticeship programs are very difficult to access.

In the ensuing months, the City Council redrafted Intro 1447 to exclude any reference to apprenticeship training and require a minimum of 40 to 55 hours of training for every construction worker on sites of four or more stories.

The legislation ceded development of the training curriculum to a 14-member task force to be appointed by the Mayor and City Council Speaker. REBNY partnered with the Minority and Woman-Owned Business Enterprise (MWBE), small contractor, and civil rights communities to voice our continued concern over: the ability of workers, who are not affiliated with a specific contractor, to pay for the new training requirements; the capacity of current training providers to accommodate thousands of workers; and the lack of any third-party verification system of training cards that will be issued as a result of this bill.

Nonetheless, the City Council passed Intro 1447 in late September. The legislation was subsequently signed by the Mayor on October 16, as Local Law 196. Along with our partner stakeholders, REBNY will continue to monitor '* the implementation of Local Law 196.

Garment Center

REBNY, along with its owner members in the Garment Center, has been calling for the removal of the zoning restriction on mid-block buildings-called the preservation area-in the Garment Center. The zoning restriction in the preservation area mandates that 50 PERCENT of the space in these buildings be used by apparel manufacturers.

The zoning restrictions in place in the Garment Center have failed manufacturers and city residents alike. Since the zoning rules have been in effect, garment employment has declined 88% in the area. Meanwhile, tax revenue from properties in compliance with the zoning restrictions is 50% less than from buildings in the district without the restrictions.

REBNY publicly stressed that the city is forgoing tax revenue that could pay for basic municipal services like police, fire, and sanitation to support a zoning policy that has clearly failed. The Garment Center Steering Committee, chaired by Manhattan Borough President Gale Brewer, was created to seek ways to preserve the garment industry in this area. The studies that were prepared to inform the Committee's work showed that there is more occupied apparel production space outside the zoning restricted mid-blocks than . within them, and that 72 percent of the apparel production firms are outside of Manhattan.

To advance the goal of removing the mid-block zoning restriction, the New York City Economic Development Corporation (EDC), with the support of REBNY and the Garment Center Business Improvement District, has proposed a package of benefits for owners in the Garment Center in exchange for committing to keep their apparel tenants in their buildings for a period of up to 15 years. As of this writing, we are optimistic that we can secure commitments from enough owners to preserve a critical mass of apparel firms in the Garment Center.

SoHo Zoning Issues

We have been working on two separate, but related, issues in SoHo. Since the 1970s, SoHo has become a vibrant mixed-use neighborhood with a variety of retail stores and a growing residential population. This has happened concurrently with a consistent decline in the number of artists and studios in the area.

One problem is that SoHo is still zoned for manufacturing. This prohibits asof--right residential use, unless you are an artist certified by the Department of Cultural Affairs, and places strict size limits on retail stores.

Another problem is that the Department of Buildings (DOB) has moved away from their established 2005 interpretation that permitted large retail stores on multiple floors as long as each floor adhered to separate establishment requirements. The establishment requirements essentially meant that each floor could be its own store, with separate access, separate cash registers, and could close while the others floors remained open. Recently, DOB has issued fines to these stores that were approved under this separate establishment interpretation. We have initiated a discussion with the administration to rezone SoHo to reflect existing uses and to address community concerns that have arisen from the ad hoc transformation of this manufacturing district to a thriving mixed-use community.

Commercial Outdoor Spaces

In the spring of 2017, the Department of Buildings (DOB) began denying applications for passive recreation uses on roof tops and terraces of commercial buildings. Previously, approvals were routinely granted and the change presented serious problems for both new construction projects and lease renewals whose provisions included terrace or rooftop use. The reason frequently given for the denial was that passive recreation needed to be enclosed unless it was associated with a restaurant use. We consulted with the Department of City Planning (DCP) to confirm that this interpretation of the enclosure requirements was wrong. DCP concurred with, our position and worked with DOB to correct its interpretation. As a result DOB drafted a bulletin to address the problem that it shared with us. We submitted detailed comments on this draft. In the meantime, DOB has been approving passive recreation uses on terraces and rooftops in anticipation of the bulletin's issuance.

Commercial Rent Tax

REBNY supported a proposal introduced by Council Member Dan Garodnick that would raise the threshold for the imposition of the Commercial Rent Tax to $500,000 from $250,000. This bill was passed by the City Council and signed into law by Mayor Bill de Blasio in late 2017. This measure will be an important benefit to small retail stores.

Caption: Mayor de Blasio announces changes to the Commercial Rent Tax
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Comment:Members honor mandate to make city the best it can be.
Publication:Real Estate Weekly
Date:Jan 17, 2018
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