At least one developer wants to build more housing at their Hudson Yards site.

With the 7 train extension set to see its first train at 34th Street and 11th Avenue next June, developers are rushing to line up financing and break ground on millions of square feet in new projects. The New York Times took a look over the weekend at the progress at Hudson Yards, but they buried some news deep within the story: at least one landowner—Silverstein Properties, which owns a 90,000-square foot site at 41st Street and 11th Avenue—wants zoning rules changed to allow it to build more housing and less office space.

For an area with poor transit links, the desire to shift from commercial to residential is not surprising. Though there will be a new subway station at 34th Street and 11th Avenue, successful office locations generally require not only transit, but redundant transit.

There are seven different subway stations, for example, along 42nd Street between Fifth and Eighth Avenues. Grand Central has three plus a regional rail terminal, and the Plaza District has around half a dozen, depending on how you define the ritzy submarket.

Hudson Yards, on the other hand, will have just one two-track subway, with Penn Station and the Eighth Avenue subway a few long avenue blocks away, at best. Commuters from Queens may have it easy, but there will be no one-seat subway rides from Brooklyn or any of Manhattan's residential neighborhoods.

While the desirability of housing in New York is also driven by proximity to transit, it relies mainly on access to midtown. Office tenants, by contrast, need transit links to the outer boroughs—a much taller order for out-of-the-way Hudson Yards.

And the market seems to be bearing this out: developers are in some stage of building or have already delivered 10,000 of the total 20,000 apartments that the city has planned for Hudson Yards since 2005, according to the Times, while only one office building has broken ground—Related's tower at 10th Avenue and West 31st Street, where they signed Coach, L'Oreal and SAP as tenants. Extell's building on 11th Avenue is on hold for want of an anchor tenant, and Moinian's mixed-use building doesn't have one either.

Office developers at Hudson Yards get much more space than those who build housing.

And while developers in today's market will throw up as many apartments as they can, builders have to work much harder to woo office tenants. The city has incentivized office space at Hudson Yards through tax breaks and more liberal zoning allowances, but office space at the World Trade Center is even more subsidized and has better transit access. Developers at Hudson Yards are understandably reluctant to throw up new towers while those in more natural locations—say, Vornado at 15 Penn Plaza—are shelving their plans.

More office towers will eventually join Related's first in the lower 30s between Penn Station and the new 7 stop on 11th Avenue, with Related aggressively courting tenants for its second, larger building. But it remains to be seen if there will be demand for the string of commercial skyscrapers that the city envisioned rising along Hudson Boulevard, on sites like Silverstein's which lacks the redeeming proximity to Penn Station. Could a potential request by Silverstein to build housing instead of offices be the first of many?

The city goes to great length to stimulate commercial development—both where there is demand, and where there isn't. At least for the moment, Hudson Yards seems to be a little bit of both.

Rem Koolhaas's 23 East 22nd Street: still not happening.

As some of New York's avid construction watchers have noticed, something is afoot at One Madison Park. Specifically, on the 22nd Street side of the site, where Rem Koolhaas and his firm, OMA, were once tapped to build a staircase-like 22-story tower, which was to rise from the townhouse-sized site and cantilever over the building to the east.

That plan is no more, done in by the recession and the original developers' spectacular bankruptcy. Something is, however, now rising from the site, and the neighbors are wondering, what's up?

Curbed published a tip in January suggesting that the building now rising will be six stories, which The Observer has confirmed with an executive from the Related Companies this afternoon. We also learned that the lobby, as the relatively squat structure is being called, will feature two full-floor duplex units, starting on the third floor and rising to the sixth. The architect, however, has not yet been named.

Meanwhile, back at the main tower on 23rd Street, it's been more of the usual weirdness from last cycle's most ostentatious blow-up—a number of in-contract units were taken down from Streeteasy last month, ranging from a $2.26 million one-bedroom on the 19th floor to a $13 million, 3,310-square foot spread on the 57th; two would-be buyers also just now got their deposits back, after nearly five years in escrow.

Still, we're guessing all of this will be forgotten once sales, to be handled in-house by Related, start back up again this spring—just in time to ride the latest condo boom, with two new units to boot.

"It was controlled by a bunch of rich developers," David Gunn once said of Moynihan Station.

David Gunn was never a fan of Moynihan Station. When he was president of Amtrak during the early George W. Bush years, he pulled the railroad out of the project, which seeks to recreate the glory of the old Pennsylvania Station in the James Farley Post Office across Eighth Avenue. At the time, costs were the stated reason: Amtrak was expected to contribute to its new home, and Mr. Gunn said that the railroad had more pressing needs.

Current Amtrak President Joseph Boardman picked the project back up in 2009, and though it's largely unfunded, Amtrak still intends to go through with the move. This, Mr. Gunn told The Observer this afternoon from his home in Nova Scotia, would be a mistake.

"From a transportation point of view," Mr. Gunn said, "it makes no sense." For passengers coming from the 1/2/3 trains, "what the Farley Building does, is make you walk from Seventh Avenue all the way across Eighth Avenue. You'll have to go under the Eighth Avenue subway, then climb up to the [new] head house, which is to the west of Eighth Avenue, over towards Ninth Avenue. And then, you walk back to where the train is! The trains are still going to be between Seventh and Eighth avenues." For passengers arriving at Moynihan Station via the IRT Seventh Avenue Line, Mr. Gunn said, "they've gotta walk almost a mile." (By our estimates, a mile might be a bit of an exaggeration, but the schlep across Manhattan's long avenues won't be negligible.)

"Now the swells"—Mr. Gunn's term for the real estate interests backing Moynihan Station, including the Related Companies and Vornado Realty Trust—"they told me, 'But people come by cab!' No they don't—Amtrak passengers, a lot of them, come by subway. They're normal people."

Mr. Gunn, who has managed transit agencies in Washington, Philadelphia, New York, Boston and Toronto, noted that New Jersey Transit built a concourse in 2002 that empties out on Seventh Avenue, reflecting its closer proximity to Manhattan's center of gravity and most of its north-south subway lines.

One way to accomodate the head house at the old Farley Post Office, Mr. Gunn said, without forcing travelers from Seventh Avenue to double back across Eighth Avenue, would be to simply continue to allow passengers to board at the current station. "But they didn't want us to let people on at the old Penn Station, because I think the real estate developers had shops they wanted people to patronize at the Farley head house." (Since then, Related and Vornado have themselves wavered on the retail plan, citing a lack of demand.)

"You ask the swells why it makes sense," continued Mr. Gunn, "and they'll immediately talk about the experience of walking through the [Moynihan] head house. Real travelers—they know the back alleys. Some of the really experienced travelers, they never even go up the mezzanine. They just want to get on the train."

"Related? Hahaha, get it?!"

New York City public advocate and Democratic mayoral candidate Bill De Blasio added his voice to a growing chorus of commentators (including The Observer) who have noted similarities between Council Speaker Christine Quinn's affordable housing platform, announced in her State of the City address earlier this week, and a plan proposed by the real estate industry in 2011. The proposal would cap property taxes for whole buildings if they agreed to set aside a certain percentage of their units to let at below-market rate rents.

"Chris Quinn's so-called affordable housing plan," Mr. De Blasio said at a press conference earlier today, "is obviously a giveaway, a very big giveaway, to powerful real estate interests. It's such a big giveaway that even Michael Bloomberg thought that it was unfair," he said, likely referring to a story in The New York Times today, which claimed that advisors within the Bloomberg administration were surprised at how closely Ms. Quinn's plan hewed to that of the Real Estate Board of New York's plan (a plan strongly supported by the Related Companies' Stephen Ross):

Aides to Mr. Bloomberg said they were surprised, even startled, to see the tax cap proposal prominently featured in Ms. Quinn’s speech.

When the real estate industry sought a similar set of tax incentives through a bill in the New York State Legislature in 2011, Mr. Bloomberg’s office singled out the tax cap for criticism. In a memo, a top aide said the plan was “not, fundamentally, an affordable housing program,” but “a large tax break dressed up as a housing policy.”

"I've had my ups and downs and downs with the mayor," Mr. De Blasio told reporters, "but when the mayor says it's fiscally irresponsible to give so much money to the wealthy, you know you've got a problem."

Mr. De Blasio also singled out Related's living wage exemption on the Far West Side, which was negotiated by Ms. Quinn. "And in that case we weren't even talking about affordable housing," he said (although Hudson Yards does have a below-market rate housing component). "We were talking about people trying to make at least $10 an hour so that they could feed their families."

When a reporter mentioned a "related question," Mr. De Blasio joked, "Related—get it?!"

Asked for his alternative to Ms. Quinn's plan, he said he would like to "use the city's own resources from that same tax base"—that is, the one that the speaker's tax breaks would eat into—"to create affordable housing." This bears a resemblance to Ms. Quinn's first idea in her State of the City, though he did not pinpoint a funding source (Ms. Quinn wanted to finance her 40,000 new affordable units through a combination of government efficiencies and new borrowing).

Mr. De Blasio also spoke of wanting to "hold developers' feet to the fire, bargain harder, demand more, because they're getting extraordinary value" out of the rezonings during the "Bloomberg and Quinn years," as he called them.

Below is a video of Mr. De Blasio's remarks on Ms. Quinn's housing plan.

Could development finally be coming to the long-stalled project?

The planned conversion of the Beaux-Arts Farley Post Office on Eighth Avenue into Amtrak's "Moynihan Station" has always been more about real estate and architecture than transportation, spurred by the city's desperate search for atonement after the destruction of the old Penn Station. Former Amtrak President David Gunn didn't mince words when he told Bloomberg News in 2011 that the project is "controlled by a bunch of rich developers."

And Related Companies doesn't seem to be doing anything to disabuse us of that notion. The New York Times reported that Stephen Ross has yet another trick up his sleeve to revive the stalled project: he wants the Borough of Manhattan Community College to move into Moynihan Station.

But Related isn't just looking for an anchor tenant for Moynihan—it also wants BMCC's land in Tribeca.

"Under the proposal by the developer," The Times writes, "the community college would move 3.8 miles north of its current location downtown to 1.1 million square feet of space in the post office building," where it would serve as the would-be complex's anchor tenant.

This would be an upgrade from BMCC's 780,000 square feet between Chambers Street and North Moore Street fronting on West Street, but this extra space would be dwarfed by Related's haul, should the plan pan out: BMCC's site sits on nearly a quarter of a million square feet of land, the majority of which has an unimpeded view of the Hudson River. With a 20 percent bonus for affordable housing or a public plaza, the current zoning would allow the site's owners to build 2.7 million square feet of space—slightly larger than 4 WTC, as a comparison.

Related may be able to count on the support of New York's civic elite, who are eager to see Moynihan Station come to life—Robert Yaro of the Regional Plan Association seemed to endorse the deal if it would get Moynihan back on track—but BMCC doesn't appear to have much interest in the project, especially since it would mean leaving their $325 million, newly-built Fiterman Hall. Plus, there's a slight legal barrier to overcome: "It was also unclear how the school could legally swap the land without going through an auction," The Times writes. Unnamed "government officials" told The Times that Related should stick to retail and office tenants, suggesting Google as a possibility.

But Mr. Ross remains undeterred, and Related is reportedly taking the issue directly to Governor Andrew Cuomo, perhaps seeking to appeal to his edifice complex.

ssmith@observer.com

What're you lookin' at? (Visualhouse/Related)

Party on the skyline. (Visualhouse/Related)

Earlier this week, the Related Companies announced it had found backers to begin building the first tower of its Hudson Yards project (at the same time that it is trying to get a break from the MTA for payments on the entire 16-acre complex). Should the project get off the ground, it will have a long way to go.

Sure, in terms of time, as it will takes years, if not decades, for the entire 12 million square feet of office, residential, retail and cultural space to be built. But there is also a long way to go in terms of distance. As the design team puts the finishing touches on the first phase of the project, it turns out the other office tower on the site, which has yet to find an anchor tenant or an announced start date, will become the second or third tallest building in the city when it is completed, surpassing the Empire State Building.

At 1,300 feet, the tallest of the Hudson Yards towers (designed by KPF) will fall just short of 1 World Trade Center (sans antenna, er, spire) and the even taller 432 Park, CIM and Harry Macklowe’s new luxury tower at the corner of 57th Street and Park Avenue, which reaches a spindly 1,397 feet into the skyline.

But this is not the only place where Hudson Yards will surpass the Empire State Building. It will also boast both a observation areas closer to heaven than at the Empire State Building, both indoors and out.

Perhaps you noticed an unusual shard jutting out from the side of the tallest tower in the latest set of renderings, first revealed a few weeks ago in New York magazine? That is an open-air observation deck located at 1,100 feet. That puts it 50 feet above the Empire State Building’s famous outdoor terrace, that iconic movie set and marriage proposal destination.

And above Hudson Yard’s outdoor observation space will be a veritable playland of attractions reaching to the top of the tower, and by extension beyond the Empire State Building’s topmost observation room, at 1,250 feet, the place where zeppelins were once meant to dock.

"It's more akin to the Rainbow Room to be honest," Related spokeswoman Joanna Rose explained. "We have a ballroom, restaurant and bars above the observation deck that offer panoramic views. And yes, we are looking at locating some of those above the 1250 mark."

They are just going after all the landmarks—not just the Empire State Building but Rockefeller Center, too. And it will be hard to compete, since as previously reported, that master of hospitality Danny Meyer will be running the show way up in the clouds.

Gateway Center 2, no longer wanting for Walmart. (Real Deal)

Walmart just sent out another cryptic release about a store it will not be opening in New York. Last time, it was an outlet at Willets Point. This time, we learn it is an even more serious non-event: the big box bogeyman's long-sought beachhead in Brooklyn is not happening.

According to Walmart spokesman Steve Restivo, the company could not reach an agreement with The Related Companies to anchor the developer's Gateway project in East New York. Despite this setback, the company promised to keep trying.

Walmart today announced that we were unable to agree upon economic terms for a project in East New York. We remain committed to bringing new economic development and shopping options to New York City, especially in the neighborhoods that need them most. Two things remain constant: most New Yorkers want us here and we remain interested in providing more convenient access to Walmart for local residents.

We appreciate all our supporters –the Mayor’s office, Borough President Markowitz, Reverend Youngblood and countless others in and outside East New York – who helped us strengthen local relationships and build bridges with the community. In addition to providing good jobs and  affordable groceries, residents want a retailer in Brooklyn that would hire and buy local, and look to make a positive economic impact by hosting job fairs, workforce development initiatives and supplier summits. Walmart will continue to evaluate local opportunities across all five boroughs.

That may be wishful thinking, though. The unions have fought a dogged campaign against the company for years now, dating back to Walmart's efforts to anchor a Related project in the Bronx. Unlike Gateway, that development required City Council approval, and the elective body has shown no love for Walmart.

Which is why Walmart find itself in dire straights now. If it could not set up shop in an as-of-right development under the invitation of a favorable mayor, how will the company fair when some of its most vocal opponents are running for mayor, with one of them almost bound to get the job?

In the ultimate coup for the labor groups fighting Walmart, it is Shop Rite that will be anchoring Gateway. The grocer just happens to be a union shop.

Midtown, 2025? (Photo composite: Ed Johnson/NYO; Photos: Getty)

It was but one line in Mayor Michael Bloomberg’s State of the City address in January, but it could prove to be one of the biggest of his dozen years in office.

“In the area around Grand Central, we’ll work with the City Council on a package of regulatory changes and incentives that will attract new investment, new companies and new jobs,” the mayor said from the stage inside Morris High School in the Bronx.

Hizzoner spent more time talking about Cornell’s Roosevelt Island tech campus, keeping the Hunt’s Point Produce Market from moving across the Hudson to Jersey and efforts to further expand the blue-collar workforce on the waterfront. Even the redevelopment of nearby East Fordham Road and Webster Avenue got equal billing with these vague pronouncements about “the area around Grand Central.”

Despite the scant mention, it turns out that for an administration that has never shied away from big plans, this may be one of the biggest projects yet.

In what is likely to be the latest, greatest and last of the grand Bloomberg rezonings, City Hall has turned its focus to Midtown East. Under the direction of City Planning Commissioner Amanda Burden, the administration has undertaken 115 rezonings in almost every corner of the city, remaking nearly a quarter of its landmass.

Now, it is time to remake the middle of Manhattan, to redevelop one of the most developed swathes of land in the world.

Midtown, 2000. (Getty)

It was not the first time Robert Steel, the deputy mayor for economic development, had considered the plight of Midtown East, but he recalled it as the moment everything came into focus. Around this time last year, the former Goldman exec and Wachovia chief was standing on the roof of the Hearst Tower two blocks south of Columbus Circle, gazing out at the city surrounding him.

The Hearst building itself is an apt metaphor for the plans the city is currently contemplating. Originally built by William Randolph Hearst in 1928, the Art Deco dandy rose to six stories, with plans for a tower to rise above. Those were waylaid, for nearly eight decades, courtesy the Great Depression. But it would take another great boom to see the project through, and in 2006, the new Hearst Tower opened, with its faceted obsidian exterior, a gem of modern office life.

It was created by the high-tech practitioner and Pritzker Prize-winner Sir Norman Foster and received a LEED Gold rating for sustainability, the first office tower in the city to do so. The base of the tower remains, a nod to history, but it was gutted to make way for a soaring lobby, complete with a waterfall that recycles rainwater, helping to cool the space and cut down on A/C costs.

This is precisely the sort of building that Mr. Steel wants to see more of in Midtown, still the heart of the city’s commercial core.

“Think about what Midtown was historically, the Pantheon for corporate America,” he said during a recent phone interview. “It was lots of jobs, but also a symbol for all the Fortune 500 companies.”

But it was not so much the Hearst Tower as the ones surrounding it that got Mr. Steel concerned. A few blocks south, Mort Zuckerman was getting underway on 250 West 55th Street. In the distance stood the new Times headquarters, and across the street the still mostly-empty 11 Times Square. To the north was the Time Warner Center, and most telling of all, 3 Columbus Circle--another 1920s beauty built for General Motors, shoddily reclad in glass during the last boom by Joe Moinian, an effort to modernize the building.

Were Mr. Steel standing on the other side of Midtown, say atop the Bloomberg Building, he could point to almost no new development whatsoever besides the tower his boss and Vornado’s Steve Ross had built in 2004. And even then, the top half of that building, like the Time Warner Center, is filled with apartments for the likes of Jay-Z (Time Warner) and his wife Beyonce (Bloomberg). What new development there might be is much closer to 3 Columbus, buildings that have been “refreshed,” than anything built new, from the ground up.

The city wishes this were not the case, but given the vagaries of Manhattan development, from the challenges of clearing out tenants to the cost of construction, the status quo is often the easiest choice for a landlord to make. Developers argue that they need incentives, namely air rights, to do anything more. The number of new buildings could be counted on one hand.

“While new windows and HVAC systems can be installed, the fundamentals of ceiling heights and column configurations are fixed,” Mr. Zucckerman, chairman of Boston Properties and owner of a number of buildings in the area, including the iconic Citicorp Tower, said in an email. “To incentivize owners to empty leased office buildings and replace them simply requires that a much higher density be allowed.”

When the city began to look at solutions, the administration was struck by just how severe the situation in Midtown east had gotten. “We did an audit, and we found that 80 percent of buildings were more than 50 years old,” Mr. Steel said of Midtown East, roughly 39th Street to 57th Street, east of Fifth Avenue. “Basically it feels like the 1940s in a lot of places. We just think this should be a showcase place for the city, especially around Grand Central.”

But the city is focusing on much more than just Grand Central, based on a preliminary presentation it gave to community boards earlier this month, with the potential upzoning of the entire area. Still, there is a special focus on the blocks around the train station, as well as along Park Avenue, seen as especially valuable as well as especially outdated.

The entire rezoning might not cover the largest footprint of any the administration has undertaken, but it could well have the largest impact. Stretching to Second Avenue in the 40s and Third Avenue in the 50s, the current study area measures 85 square blocks, roughly 250 acres of the most densely developed property on earth. It is equivalent to about 10 Hudson Yards.

Yet compared to a place like Hong Kong or Singapore, the densities are piddling. “On a macro level, we have to remain competitive on a global basis in terms of creating modern office space,” real estate scion and Association of Better New York chairman Bill Rudin told The Observer. “Back in the ’80s, they shifted the zoning from the East Side to the West Side, and it kept going out to Hudson Yards. But Park Avenue is still very desirous.”

Steven Spinola, executive director of the Real Estate Board of New York, put it in even more stark terms. “Right now, our buildings top out around 50 stories,” he said. “Why shouldn’t they top out around 80 stories? They do in a lot of other great cities.” According to one much-discussed proposal, they could, with air rights jumping as much as 50 percent in certain areas.

An initial proposal is to be released on July 11, and the city hopes to begin the arduous public review process by the first quarter of next year—just before the notorious countdown clock at City Hall blinks off.

It all starts with Grand Central. (Getty)

There are those who fear that the city is putting the cart before the conductor. One of the big arguments for rezoning Midtown East is the arrival of East Side Access, which will usher the Long Island Railroad into Grand Central by the end of the decade (assuming no further delays). The Second Avenue subway might someday reach the area as well. But at the same time, the city has made massive infrastructure investments in areas like Hudson Yards and the World Trade Center site, where the Related Companies and Silverstein Properties struggle to find tenants. These expenditures, for expanding the 7 train and rebuilding ground zero, were partly based on the argument that Midtown had seen its day.

The case for reviving it is good, but not at the cost of these other areas, the thinking goes.

“The public is spending billions of dollars at Hudson Yards and ground zero, and for good reason,” Raju Mann, a former city planner and member of Community Board 5, said a recent meeting of the board. “We haven’t even seen what these projects have produced yet, so how can we be sure what’s appropriate for Midtown East?”

And yet developers outside of Midtown East areas are not worried, pointing out that the city’s proposal could take years, if not decades, to come to fruition.

“My first reaction was to be concerned about it, but the more I thought about it, it’s a really long-term proposition,” Jay Cross, president of Related Hudson Yards, told The Observer. He said the proposal could even be self-defeating. “It will also make these buildings more valuable, just perceptually, which will drive up the building cost,” he said. “That means they cost more to trade and assemble the sites, and by the time you’ve done all that, you may not be able to afford to replace the buildings.

Larry Silverstein shared this sentiment at the topping out of 4 World Trade Center on Monday, his shiny new office building that remains half empty. “My hunch is, we’re going to do fine,” he said, pointing to the drift of New Yorkers to both live and work in Downtown and Brooklyn.

There are other demographic shifts afoot, as well, though, that could undermine the success of the city’s plan. If one area has flourished during the past few years it is not Midtown East or Hudson Yards but Midtown South. As financial firms, with their love of shiny buildings and vast trading floors, have retrenched, the city’s tech sector has flourished, and it largely prefers old buildings to new. Even those firms moving to Midtown, like Facebook and Twitter, are setting up shop on Madison Avenue, filling spaces that are more Mad Men than Blade Runner. “We don’t know what the office of the future will look like yet,” Mr. Mann said.

Mr. Rudin pointed out that the two do not have to be mutually exclusive. “We need office space of all types for all types of tenants,” he said. “The important thing is that we plan for the future.”

The past is an issue, as well, as some preservationists worry about taking a full accounting of Midtown’s historic fabric before we begin bulldozing it. “I’ll be the first to admit that just because a building is X years old doesn’t mean it’s worth saving and reusing,” said Peg Breen, president of the Landmarks Conservancy. “But we can’t just plow it all under and build Midtown anew. Why bulldoze the place without seeing what’s there first.”

Vishaan Chakrabarti, director of Columbia University's real estate development program and former head of the Department of City Planning's Manhattan office, warned against knee-jerk preservation in the heart of Midtown. "This is the engine for the entire city," he said. "We cannot freeze it in amber. If we do, we'll end up like Paris, a museum and nothing else." Pro-development types love invoking Paris. It is the bête noire of businessmen the world over, apparently.

Still, the city argues that it is not obsessing over Midtown but instead finally giving it the attention it was used to in the past after a fair amount of neglect. “Really, this is a response to the five borough economic plan, which has focused outside of Midtown more than any administration ever has, I think,” Mr. Steel said.

This could be the case in more ways than one, as some traditional Midtown heavyweights, like SL Green, have felt neglected amidst the city’s westward expansion. Earlier this month, The Journal revealed that the city’s largest commercial landlord had teamed up with Hines, another player who has mostly developed along Third and Lex, to replace a clutch of turn-of-the-century buildings immediately west of Grand Central, on 42^nd Street between Madison and Vanderbuilt avenues. The city freely admits that it is working with local stakeholders to craft its plan but denies that they are the ones sketching it out.

"We will listen to what our partners in the private sector have to say, as well as the community, but this is definitely the mayor and his team's plan," Mr. Steel said. One City Hall source even called it "Bob Steel's baby," the marquee project of the deputy mayor since he joined the administration two years ago.

425 Park, in its prime. (Eral Soto)

One need look no further than 425 Park Avenue for proof of the problems with Midtown’s current zoning. One of those bland mid-century grandees, all flat glass planes, it was completed in 1958 and spans an entire block on Park. David Levinson, a partner at L&L Holdings, would tear down the 32-story behemoth if he could and replace it with something better. He is in the rare position of owning a building that will be empty of tenants coming 2015—normally a bad thing, were L&L not set on ridding itself of the low ceilings and column-choked spaces that fill the space.

“It’s an entire block-front on Park Avenue, and that opportunity hasn’t existed in my lifetime,” Mr. Levinson said with relish.

But he is confronted with the challenge of the zoning having changed three years after his tower was built, and were he to replace it, he would be left with a much smaller building. It is a problem faced by landlords all across Midtown East.

His clever real estate attorneys have determined that he could demolish all but the bottom quarter of the building and build up from there, getting as close to a new building as one could hope for. He has convened a private competition between 10 of the world’s top architects to solve this vexing problem.

Naturally, his fingers are also crossed that the city might solve this problem for him. “The zoning does not make this easy, but that’s the way it is, and we’re going to comply with that,” Mr Levinson said, “unless something changes.”

It might, and it might not. According to city planning sources, the proposal could get downsized to include only the immediate blocks surrounding Grand Central. There are almost 2 million square feet in development rights that once belonged to the Penn Central Railroad, currently owned by a little-known firm called Argent Ventures.

The city would add to that pot by a few million square feet, selling off the extra air rights, which would go to fund improvements to the surrounding streets and the spaces within Grand Central, particularly the local, and long-neglected, subway stations. This would benefit but a few developers owning surrounding properties. City Hall denied it has shrunk its scheme, but also admitted that it has yet to finalize the boundaries.

The administration is stuck between what it wants to build and what it has time to build. With thousands of constituents in Midtown, many with money to make and lose, it would be difficult to realize a sweeping plan within the next 18 months—public review alone takes seven. “I’m not even sure if there is unanimity at City Hall on what to do,” as one top land-use attorney put it. “I hope they can move quickly and not settle for the lowest common denominator.”

Even those critical or wary of the plan want to see it succeed, they just want to see it done right. The Municipal Art Society has long been a champion of Grand Central Terminal, helping to save it decades ago with Jacklyn Kennedy Onassis, and they have taken a keen interest in this project as well. Vin Cipolla, the group's president, hopes the mayor will take time in coming up with a plan, while realizing that if the administration puts it off, the next one might not take it up, either.

"Any plan for this area needs to be carefully balanced and worthy of Grand Central, the Chrysler Building and the Seagrams building," Mr. Cipolla said. "It’s a part of the city where the bar has to be very high."

And so do the buildings.

Take me out to the mall game! (Queens Development Group)

Talk about a home run.

After two years of negotiations with some of New York’s biggest developers, the city has scored a victory at Willets Point at once smaller and bigger than previously pitched. Today, Mayor Michael Bloomberg released the line-up for a 52-acre Willets Point development boxing in Citi Field, which will be built by a development double play by the Related Companies and Sterling Equities, run by the owners of the Mets.

The project will not encompass the entire 61-acre Iron Triangle. Nor will it follow the outlines of a plan for phased development at Willets Point released in 2010. But rather than being a smaller project, a glorified mall as early leaks of the agreement had suggested, the new plan far exceeds what the Bloomberg administration had once called for on the site two years ago—and not simply because the Wilpons will now build a million-square-foot "entertainment complex" (don't call it a mall!) on the west side of their stadium. The bigger play is what is planned on the east side of the stadium.

“At Willets Point, where others have seen challenges, we have always seen enormous opportunities,” Mayor Bloomberg said at a breakfast hosted by the Queens Chamber of Commerce. “Today the valley of ashes is well on its way to becoming the site of historic private investment, major job creation and unprecedented environmental remediation."

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Previously, the city was looking to develop 680,000 square feet of retail, 400 units of housing and up to 387 hotel rooms on a 12.5 acre site. Now, with the expansion of the project west of the stadium—a 29 acre parcel to be known as Willets West—there is more room for housing and hotel rooms, and even some office space within a 23 acre swath of the Iron Traingle. The amount of retail also rises to 900,000 square feet, though it is meant to be community focused, rather than the destination, mall-style retail that will be in Willets West.

The number of housing units jumps to as many as 2,500 apartments, up from 400, of which 30 percent would have to be set aside as affordable housing. At full build out, that would be 875 units. Related has the option to build less apartments overall depending on market conditions, but spokeswoman Joanna Rose said the plans was to build as much as possible. "You have to build a critical mass to create a neighborhood," she said. And it is true that residential is a specialty of Related's, as well as one of the more profitable things one can build in the city.

There will also be up to 500,000 square feet of office space, which is targeted at local businesses, and two hotels, one of 200 rooms and another of 280, a hundred more than previously planned for the site. There will also be more open space than originally proposed, 5 acres instead of 2 acres.

Taken together, the 52-acre complex (not counting the stadium sitting in the middle of it) covers twice the area of Related's Hudson Yards development, but is also smaller in scale, 6 million square feet compared to nearly four times as much development on the Far West Side.

Were Related and Sterling to win later phases to develop the entire Willets Point area, it would control a huge 90 acre swath of prime Queens real estate. The development team has the right of first refusal on subsequent phases of the project.

Issues of eminent domain for the project are still looming, but also shrinking. Mayor Bloomberg announced that the city now controls 95 percent of the property within Willets Point needed to move forward on the first phase and hoped to own all of it soon, thereby avoiding eminent domain proceedings for the first phase. The city controls less land further east in Willets Point.

"The mayor is keeping his eye on Queens," Congressman Joseph Crowley said. "The jobs here will be enormous." Construction is expected to employ 12,000 workers over the course of the project and create 7,100 full-time jobs within the project area.

None of this can begin before the developers clean up their site, a process that is expected to begin next year or early 2014 and could last a few years given the mess at Willets Point—decades of contamination dating back to the valley of ashes, when it was a coal dump, as well as more modern toxins from oil to heavy metals from the auto and industrial work in the area.

The developers have promised a state-of-the-art, sustainable clean-up, but that also means it will be a few baseball seasons before anything can be built, let alone open. The city will contribute $100 million toward clean-up and infrastructure work, which will be repaid through $310 million in construction tax revenue and $150 million in annual taxes, according to the administration's calculations.

Once the site is cleaned up, it will proceed in phases, with the 200-room hotel and 30,000 square feet of retail and restaurants along 126th Street, on Citi Field's eastern flank. This part of the project will be designed by Elkus Manfredi and Perkins Eastman, with another possible collaboration on the hotel.

This first piece of development is meant to activate the entry to the stadium while also masking a 20-acre parking lot that will be paved behind it. This will facilitate the construction of Willets West because the plan is for the new million-square-foot complex to be built on the stadium's current parking lots.

The new lot will be fitted with temporary ball fields and community space that will be available half the year, during the Met's off-season and when the team is away on prolonged road trips. The developers are exploring whether this would be fields that could be driven on top of or temporary structures that need repeated installation, as happens at all-star games, the Super Bowl and similar events.

To accommodate this new lot and other modifications, the city will be seeking approvals from the City Council but is structuring the plan so as to avoid a full land-use review going through the community boards and borough hall.

Once Willets West is built, including a 2,500 car parking structure, the eastern parking lot would be replaced with the balance of the 4.5 million square feet of development—all that housing, retail and office space.

"This is a great asset for the team and for Queens," Jeff Wilpon, executive vice-president for Sterling Equities said.

Sterling and Related were both looking at the project, while it was the Wilpons that suggested the two should team up. That franchise is giving fans of the long-planned (at least as far back as the Mets' last World Series) project hope it will finally happen.

"I think this is just spectacular," Queens Borough President Helen Marshall said. "And with the Mets on board, I know it's really going to get done. They're fielding the best team, very focused on results."