SL Green- Rezoning Guinea Pig?
At Cubed Advisory, we have been chewing on the Full Story below for a little over a week now.  It outlines how SL Green has tapped Hines to help it with a ground up development.  Having purchased the last of four lots that comprise the block on the NE corner of Madison and 42nd Street in December, SL Green is talking up its plans.  Those plans include a 'trophy' building of 1.2M SF with a transit tie in.  The transit link makes perfect sense being across the street from Grand Central, but will also tap a zoning incentive that boosts the FAR on the 1 acre site from 15 to 18- for a total buildable SF of just over 779kSF.  SL Green also plans on rolling over air rights it retained on the 2011 sale of 110 East 42nd Street, adding around 150kSF and raising the total to 929kSF.
You see the problem here right?
929kSF as of right does not equal 1.2MSF 'trophy' building.
Where is the extra space coming from?  Our best guess here at Cubed Advisory is that SL Green is planning to take advantage of Bloomberg's expected midtown rezoning.  No firm details have been released as of yet, but the area in question would be centered on Grand Central, comprise of around 85 blocks and is expected to provide a SF boost of around 25%.
929kSF x 1.25 = close enough to 1.2MSF for a press release.
With Bloomberg's term expiring in 18 months and the finalized proposal to go before city council before then, you can count on the fact that SL Green is banking heavily on this rezoning, if they aren't actually helping to write it themselves.
Current midtown zoning has some very stringent and mathematically complex rules that govern the shape of towers built in the area.  SL Green's recently acquired midget block would limit a tower to floor plates of 22-24kSF.  With current trends looking for floorplates starting at 25kSF, we at Cubed Advisory are expecting to see a rewrite of the zoning bulk rules that will affect the setback requirements along major avenues.  If the intent of Bloomberg's midtown rezoning is for NYC to create globally competitive building stock through SF incentives, it is also going to have to address the usability of that space.
SL Green looks poised to be the first guinea pig of this upcoming rezoning- we will be watching closely.

Full Story
(summary link for those without a WSJ subscription)

Labels: , , , , ,


Post a Comment