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.
