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Land Use, Housing & Zoning
855 6TH AVENUE (B/T 30-31ST STS), A MIXED-USE - RETAIL, OFFICE, RESIDENTIAL - 41-STORY BUILDING. APPLICATION FOR 421-A PARTIAL REAL ESTATE TAX EXEMPTION, WITH 75 ON-SITE UNITS OF "AFFORDABLE" HOUSING, OUT OF 375 RESIDENTIAL UNITS ALTOGETHER.
WHEREAS, The Durst Organization is constructing a mixed-use residential and commercial building at 855 Sixth Avenue with 375 apartments and Nike's New York City headquarters; and
WHEREAS, The Durst Organization is seeking to use four forms of government subsidy to finance their development of luxury apartments in exchange for making 50 of their building's units permanently affordable and 25 of their units temporarily affordable for low-income households; and
WHEREAS, The first taxpayer subsidy to The Durst Organization is the Low Income Housing Tax Credit (LIHTC) Program through which The Durst Organization will receive $11,846,250 (in 2013 dollars); and
WHEREAS, The second taxpayer subsidy to The Durst Organization is the $187,000,000 in the low-interest Tax-Exempt Bonds (in 2013 dollars); and
WHEREAS, The third taxpayer subsidy to The Durst Organization would be, if the 421-a application is approved, a 100% property tax exemption for all of the residential portion of the building (including the 80% of market-rate units) for a period of 12 years followed by an 8-year partial exemption; and
WHEREAS, The fourth subsidy to The Durst Organization is the zoning bonus that allows it to build 49,073 square feet of residential floor area without providing any additional units of housing beyond those already publicly paid for through the first three taxpayer subsidies--LIHTC, Tax-Exempt Bonds and 421-a; and
WHEREAS, With residential development rights worth at least $450 per square foot in our community district, the value of this fourth zoning bonus subsidy is at least $22 million; and
WHEREAS, This subsidized building will include a children's play room, basketball court, fitness center, roof deck, swimming pool, residents' lounge and a media room; and
WHEREAS, Community Board Five believes that any private developer whose real estate project is subsidized through public tax dollars (both city and federal) and a zoning bonus must ensure that low-income residents have affordable access to the government-subsidized children's play room, basketball court, fitness center, roof deck, swimming pool, residents' lounge and a media room so these families and individuals can be full and equal members of their building community; and
WHEREAS, The last developer using both 421-a and the Inclusionary Housing R10 Program Zoning Bonus in Community Board Five, The Torkian Group, made a legally binding commitment to ensure that its tenants would permanently have a right of affordable access to the roof, gym and other building amenities by committing to the following terms:
- The amenity fee for the first year for a single adult tenant of an IH unit will be set at not more than either $750 per year or 50% of the rate for single adults in market-rate units (whichever is less);
- The amenity fee for the first year for all adult tenants of an IH unit will be set at either not more than $1,000 per year or 50% of the rate for the adult tenants of market-rate tenant households (whichever is less);
- Each year, the amenity fee may rise no more than the percentage increase set forth by the Rent Guidelines Board (or a successor organization), or, if such board ceases to exist, the annual increase will be no more than percentage increase year-to-year in median household income as set forth by the U.S. Department of Housing and Urban Development for the New York, NY HUD Metro FMR Area;
- Under no circumstances will the annual amenity fee charged to low-income tenants ever be more than 50% of the rate charged to market-rate tenants;
- Upon each lease renewal, tenants in IH units will be clearly notified of the discounted rate available to them through mail;
- IH tenants will have the opportunity, if they so wish, to pay one-twelfth of the annual amenity fee each month rather than as a lump sum payment; and
WHEREAS, A month prior to the Land Use, Zoning and Housing Committee meeting, The Durst Organization was notified that Community Board Five believes that a binding commitment to ensure that affordable low-income family access to building amenities is essential; and
WHEREAS, At the Land Use, Zoning and Housing Committee meeting on July 1, 2015 a representative from the Durst Organization would make no binding or even non-binding commitments as to the maximum price (or percent of market rate amenity fee) low-income tenants would be forced to pay to be full members of the taxpayer-subsidized building; and
WHEREAS, Without a legally binding commitment recorded in a restrictive declaration on the property, there is no guarantee that The Durst Organization or any future owner would not charge a prohibitively expensive fee for children's play room, basketball court, fitness center, roof deck, swimming pool, residents' lounge and a media room that would prevent low-income households from mingling with higher-income neighbors; and
WHEREAS, In light of other developers having committed to creating buildings of inclusion for low-income tenants, we find it especially unfortunate that a prominent development company like The Durst Organization will not commit itself and any future owner to operate a building where low-income residents have a decent chance of accessing the building common spaces subsidized by the public; and
WHEREAS, Community Board Five strongly believes that a developer availing themselves of four overlapping public subsidies, yet not making any guarantee that low-income children and adults will be able to afford to play games, exercise or socialize in common spaces with their wealthier neighbors, amounts to a taxpayer-subsidized tale-of-two-cities building; therefore be it
RESOLVED, Community Board Five strongly urges the New York City Department of Housing Preservation and Development to deny the 421-a application for 855 Sixth Avenue because approving the application would amount to a tale-of-two-cities building subsidized by the City of New York.