Hell's Kitchen: Recent Zoning articles

[Hellskitchen]

Hell's Kitchen Online                                    6/14/98
                 "All the News the Times Won't Print"
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Recent articles on the 8th Avenue/Theater District Zoning Proposal

* The Broadway Initiative Gets a New Coordinator (Playbill)
* Equity: Benefits For Clinton If Rezoning Hits Eighth Avenue (Backstage)
* Sondheim Chairs New Broadway Initiative (Backstage)
* NY Planning Commission Approves B'way Zoning Plan With Revisions (Playbill)
* Broadway Theaters and Zoning (NY Law Journal)

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The Broadway Initiative Gets a New Coordinator
Playbill, 04-JUN-98
By Robert Simonson

Joey Parnes has been named the new coordinator of The Broadway Initiative, the coalition of
theatrical producers, unions and theatre owners. Parnes will replace Anne Zimmerman, who is taking
a job in Florence, Italy.

Parnes is the former executive producer of The Public Theater, where he supervised the Broadway
transfers of the Patrick Stewart production of The Tempest and the Savion Glover tap musical Bring
in 'Da Noise, Bring in 'Da Funk. Prior to that, he spent 13 years as general manager on such
Marvin A. Krauss productions as Dreamgirls, Grand Hotel, and Passion. Parnes is member of the
League of American Theatres and Producers, where he serves on committees such as the Tony
management committee.

The Broadway Initiative is dedicated to the future health of the theatre industry and is the force
behind such programs as a projected $10 million a year development fund designed to greatly
increase, though grants and industry subsidy, the production of plays on Broadway.

In other Initiative news, the group is planning to move from its quarters at Actors' Equity to new
digs at 1501 Broadway. It has also elected its first board of directors, with composer Stephen
Sondheim as its chair. Sondheim has previously backed the Initiative, most recently at a hearing
of the New York City Planning Commission.

Zimmerman will leave her post on June 19, but will return in July to assist Parnes with the
transition.

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Equity: Benefits For Clinton If Rezoning Hits Eighth Avenue
Backstage, June 5, 1998
By Murdoch McBride

The Council of the Actors' Equity Association has again called for removing "the entire West Side
of Eighth Avenue" from a controversial theatre district rezoning plan or, short of that, assuring
"beneficial impact on the Clinton community."

The union's council met Thurs., May 28, to consider a community impact resolution submitted by
Equity's Ad Hoc Government Affairs Committee. At issue were concerns over theatre district
rezoning, which is supported by Equity, and the effect this plan might have on adjoining
neighborhoods, where many Equity members reside.

The council passed a resolution nudging for general concessions on behalf of the residents in
Clinton/Hell's Kitchen, the areas that would be directly affected should Eighth Avenue development
remain part of theatre district rezoning plan.

Equity's resolution was not surprising, given its continued support of the theatre rezoning plan.
But it is a strong indication of the substantive zoning concessions that could be negotiated for
those living directly adjacent to "soft sites." Soft sites, or receiving sites, are properties
targeted for development through transferring air rights of Broadway theatres to developers of
other property.

A copy of the Equity resolution obtained by Back Stage indicates that the council had "weighed the
views of both supporters and detractors" and voted 7-0, with two abstentions, "to suggest that the
above mentioned zoning plan be altered by removing the entire West Side of Eighth Avenue."

In a subsequent letter to NYC Planning Commission Chairman Joe Rose, Equity Executive Director
Alan Eisenberg wrote, "It was the intention of the resolution that said impact [of rezoning
development] be made directly beneficial by the use of any or all of the following: added units of
affordable housing, making the use of air rights contingent on the use of the Inclusionary Housing
Bonus, a sunset clause, and anti harassment text and enforcement."

The housing bonus and sunset clause are typical zoning concessions designed to ameliorate the
negative side effects of zoning changes. The housing bonus provides a mix of affordable housing in
new development and a sunset clause provides for the gradual elimination of a zoning variance that
favored a particular interest.

Last month, Manhattan Borough Board President Virginia Fields tentatively approved the proposed
theatre rezoning plan after calling for substantive changes. Her conditional support was based on
concessions which favored the neighboring community.

Commission Faces Many Issues

Conventional wisdom on the prospects for theatre district rezoning remains mixed. The NYC Planning
Commission was scheduled to vote on the plan at press time, Wed, June 3. However, as of late
Monday afternoon, June 1, sources indicated that "negotiations were still taking place." Even so,
and notwithstanding small modifications, any substantive changes are expected to be made by the
full City Council, which is tentatively scheduled to vote on the plan on Tue., July 14.

=================================================================

Sondheim Chairs New Broadway Initiative 
Backstage, June 8, 1998
By Murdoch McBride

The fledgling Broadway Initiative has elected its first board of directors, with Stephen Sondheim
as its chairman.

The May 28 election capped a flurry of current initiative activity. In another major action,
theatre industry veteran Joey Parnes was named to replace Anne Zimmerman as working group
coordinator. Zimmerman has accepted a job in Italy. Parnes will begin work on Mon., June 8.

In addition, the group is moving from temporary quarters at Actors' Equity, to new offices at 1501
Broadway, where it will share space with producer Elizabeth McCann, who has been elected the
initiative's vice chairman.

Pulitzer Prize-winning composer Stephen Sondheim solidly linked his name with the Broadway
Initiative recently when he testified on behalf of the group before the NYC Planning Commission.
He and McCann are joined on the board by professional accountant Mary Gottschalk, who was named
secretary/treasurer. The initiative's first elected board replaces an interim board which
supervised activities during the coalition's start up.

Commenting on the appointment of a new chairman, Zimmerman said, "Stephen Sondheim is committed to
the organization and what it is trying to achieve. His leadership is important to us." Zimmerman
characterized the board elections as a "very positive step forward."

She also elaborated on the surprising news of her departure from the initiative. "I accepted this
position on an interim basis," she explained. "My husband and I are returning to Italy, where I
have been offered a new position."

Zimmerman indicated that she will assist Parnes in an initial transition period before moving to
Italy. In July, at the request of the Broadway Initiative, she will return to New York to assist
in the final preparations leading to the full City Council vote on the proposed theatre district
rezoning plan, which she is intimately familiar with. Theatre rezoning is considered essential to
the Broadway Initiative and is viewed as the coalition's first major program.

Pal Joey

"I leave with regret but with confidence in the future of the Broadway Initiative," Zimmerman
said. "The initiative is extremely fortunate to have Joey Parnes to take it forward. I'm just
really glad that he accepted the position because I think that he will be very effective. He knows
everybody, he knows how the business works, he can be a consensus builder, and that's what the
industry needs."

Parnes, who was contacted immediately following the announcement of his appointment, indicated his
philosophy for the initiative.

"I feel honored that enough people have confidence in me to take the Broadway Initiative to the
next level," he said. "I've been fully aware of the initiative, and what Jack Goldstein started
has really evolved, steadily so, and in a good way."

Parnes was the former executive producer of The Public Theatre/New York Shakespeare Festival,
where he was responsible for daily operations and the not-for-profit's $10 million annual budget.
He supervised the transfer of two shows to successful Broadway engagements: "The Tempest," and
"Bring In 'Da Noise, Bring In 'Da Funk." As a general manager for Marvin A. Krauss, Parnes worked
on "Dreamgirls," "Grand Hotel," "The Will Rogers Follies," and "Passion."

He is married to a family practitioner and they have two daughters, 8 and 6

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NY Planning Commission Approves B'way Zoning Plan With Revisions
Playbill, by Robert Simonson
04-JUN-98

The Eighth Avenue Zoning Proposal entered a new phase on June 3, when the New York City Planning
Commission approved a revised version of the measure by a vote of 10-2 with one abstention.
Supporters of the plan hope the alterations -- which include a provision discouraging the
construction of large buildings on the west side of Eighth Avenue -- will help the chances for
passage of a proposal which has so far weathered an opposition from some of the residents in the
neighborhood abutting the Broadway theatre district.

Put forth as a needed boost for the Broadway theatre industry, the Department of Planning's
proposal would allow theatre owners to sell the "air rights" to their landmarked low-rise
buildings to developers who wished to build along Eighth Avenue between 40th and 57th streets in
excess of current zoning laws. A portion of the money theatre owners would cull from such a
windfall, meanwhile, would be deposited into a Theatre Fund, intended for the upkeep of landmark
theatres and the development of new plays and used by the Broadway Initiative Working Group -- a
coalition of theatrical management and union groups. Additionally, theatres who sell development
rights would have to commit their properties to theatrical use for a period of 25 years.

While backers of the plan argue that its passage is crucial to the survival the Broadway theatre,
one of the city's most vital industries, opponents have expressed worries about the effect, both
economic and environmental, such development would have on the surrounding neighborhood. In recent
weeks, parties as disparate as Manhattan Borough President C. Virginia Fields and the Actors'
Equity union have suggested that the west side of Eighth Avenue -- officially a part of the
Clinton community -- be eliminated from the zoning proposal.

The Planning Commission seems to have heard those calls. A new provision in the plan has removed a
set of regulations which could encourage the construction of large office buildings on the
avenue's west side, therefore increasing the likelihood that any development would be residential.
Furthermore, another clause which said that where Midtown and Clinton regulations overlapped, the
former would prevail, has been dropped; under the new plan, the more restrictive regulations would
be held up. Finally, Deputy Mayor Randy Mastro submitted a letter that, the Department of
Planning's Richard Barth said, "restated [the city's] commitment to affordable housing in
Clinton."

"We were particularly pleased with the changes about the commitment for inclusive housing in
Clinton," said Anne Zimmerman, coordinator of the Broadway Initiative. "We wanted the concerns of
Clinton to be addressed." She added that she considered the zoning plan "important not only for
the future of the Broadway Initiative, but for the preservation of the theatres for legitimate
theatre use." She emphasized that she thought the securing of the theatres' futures the most
important aspect of the proposal by far.Another significant change involved certification of
development transfers. Where before applications would be sent to City Planning Commission
Chairman Joseph B. Rose for approval, they would now be presented to the entire planning
commission and referred to Community Boards 4 and 5, the borough president, and the local city
council member. Another change would switch the review and possible adjustment of Theatre Fund
contributions from being an optional duty performed by the chairman to a mandatory practice
exercised by the commission.

Other changes in the proposal helped ensure that participating Broadway theatres remain committed
to stage use. A provision which allowed for a temporary interim change of use during the 25-year
period has been revoked. Also, another provision permitting theatres to apply for a modification
of use after the 25 years has also been eliminated.

"The provisions that would keep these theatres theatres into perpetuity were strengthened,"
observed Ethan Geto, a spokesman for The Broadway Initiative. "The Broadway Initiative is
extremely pleased on the vote. We look forward to discussing the proposal with the City Council."

"I think that they did a lot of wise and good things there," said Rebecca Robertson of the Shubert
Organization, the largest owner of Broadway theatres. "There was a lot of community concern about
the plan. I think the commission did a lot of the things the preservationist groups asked for."

Richard Barth thought the changes answered many of the complaints which had been directed against
the proposal. "Certainly these changes strengthen the proposal," he said. "[The commission] has
responded to the issues raised." Both Geto and Robertson expressed guarded hopes that the
alterations would improve the measure's chances with the City Council and impress the plans
detractors.

"All of these changes are acceptable to the theatre community, and we think will strengthen the
plan's possibility for passage," said Geto. "Clearly some of these provisions are among the things
that the people in Clinton had sought."

"I think that the fact that the theatre community has been so supportive of the proposal in
general is important," added Robertson. "I think [the changes] go a long way towards the concerns
Equity voiced. I think there is such a strong support for theatre in this city, and that will
weigh with the council. The introduction of a commitment to low income housing will go a long
way."

The proposal is expected to go before the City Council in August.

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REAL ESTATE & TITLE TRENDS
Broadway Theaters and Zoning
New York Law Journal June 8, 1998
BY ROBERT J. SORIN

THE NEAR COLLAPSE of the New York City real estate market in the late 1980s and early 1990s
brought development in the Times Square area and more general theater district to a virtual halt.
Today, this once stagnant market has come back with a vengeance.

Of the four major office parcels at 42nd Street and Times Square which have long stood as symbols
of a failed real estate market in New York, one is under construction, another is about to begin
construction, and the other two were subjects of a recent auction reported to command exorbitant
prices. Such world renowned entities as the Disney company, the Virgin Group, Sony Theaters and
Planet Hollywood have recently opened, or intend to open, large stores, restaurants, multi-screen
theaters and hotels in the area.

The interest of savvy investors and developers, eager to maximize value, is at an all time high in
one of the most active real estate markets of this decade. One of the tools historically used to
create value in New York City is the sale and purchase of transferable development rights, or
TDRs.

Development rights are the amount of floor area which can be built on a particular zoning lot. The
Zoning Resolution of the City of New York establishes various zoning district classifications
which specify the allowable Floor Area Ratio (FAR) for zoning lots within each district. The
allowable floor area for a lot is the product of the square footage of the lot multiplied by the
applicable FAR.

For example, if a 200 Æ 50 foot lot is in a district where the FAR is 15, then the allowable floor
area for that lot would be 150,000. If the structures on a zoning lot do not completely utilize
the allowable floor area, subject to the restrictions and procedures set forth in the Zoning
Resolution, the owner of that zoning lot may sell this excess floor area to the owner of another
zoning lot, thereby increasing the maximum square footage of the structures on the receiving
zoning lot.

Public-Private Battle

The theater district in New York City has been a cauldron in the battle between private developers
and government planners in the use of TDRs to enhance development.

The zoning lots on which the city's famous legitimate theaters are located have significant excess
development rights, making them prime targets of developers looking either to increase floor area
on other zoning lots, or to redevelop the lots on which the theaters are located. For government
planners, this situation offers an opportunity to preserve and maintain the theaters as conditions
to the transfer of these excess development rights.

Spurred by the demolition of the Morosco and Helen Hayes theaters to make room for the New York
Marriott Marquis Hotel, in 1982 the City Planning Commission adopted amendments to the Zoning
Resolution which created a separate Theater District and placed significant restrictions on the
demolition of specified legitimate theaters. Minor changes were also made to the regulations
(originally adopted in 1968) for the transfer of development rights from landmark sites, for those
listed theaters designated as landmarks.

The Theater District established by these regulations (which are contained in §§81-72 to 81-75 of
the Zoning Resolution) extends from 40th Street to 57th Street and from Avenue of the Americas to
Eighth Avenue. With minor exceptions, whether or not a listed theater is involved in the transfer
of development rights, an as-of-right transfer of development rights in the Theater District is
the same as in other zoning districts in New York City.

The as-of-right transfer is predicated on the merger of two or more zoning lots, which must be
contiguous for a minimum of 10 linear feet, and can be completed as long as all "parties in
interest" in each lot consent to the merger. The basic parties in interest are fee owners,
mortgagees, mechanics' lienors, ground or net lessees holding a recorded interest and other
holders of an enforceable recorded interest (or an unrecorded interest which would be disclosed by
physical inspection) in a lot which would be adversely affected by the development of that lot.

The merger of zoning lots is not a conveyance or merger of fee title to the separate lots, and
they also remain distinct for real estate tax purposes. The merger has the effect of aggregating
the total floor area of each separate zoning lot into the combined zoning lot, with the excess
floor area allocated by contract in a zoning lot and development agreement among the owners of
each lot. Typically, the sending lot transfers all of its excess floor area to the receiving lot,
and grants to the receiving lot an easement for light and air above the existing structues on the
sending lot.

Second Transfer Option

In addition to the mechanism of an as-of-right transfer described above, development rights may be
transferred from a landmarked Broadway theater by complying with provisions of the Zoning
Resolution applicable to landmarks.

Many landmark sites in New York City are landlocked, for development rights transfer purposes,
because the adjacent lots are already fully developed. The Zoning Resolution permits development
rights from a landmark to be transferred to a lot which is across the street or street
intersection from the landmark and, in most of the Theater Dstrict, from that lot to another
adjacent lot, as long as (a) the lot which is across the street or intersection from the landmark,
(b) the ultimate receiving lot and (c) all intervening lots are under the same ownership.

The procedure requires an application to the City Planning Commission and includes a site plan for
the receiving lot as well as a plan for the preservation and maintenance of the landmark. The
Landmarks Preservation Commission then reports to the City Planning Commission on the proposed
transfer and program for maintenance of the landmark. The Planning Commission must issue a special
permit for the transfer, and the issuance of this permit may be conditioned on the funding of a
maintenance program for the landmark from the proceeds of the sale.

Unfortunately, there are few potential receiving lots for the development rights of these theaters
due to the geographic density of many of the listed theaters under the existing TDR regulations
for landmarks. This prompted Mayor Rudolph Giuliani last December to propose significant changes
to the zoning regulations governing the transfer of development rights from listed theaters,
designed in part to broadly expand the universe of lots to which development rights from these
theaters could be transferred.

The proposed regulations would permit a transfer to almost any lot in the entire Theater District,
whether or not it is adjacent to or across the street from the sending lot. In return, the owner
of the theater parcel would be required to agree to operate the theater as such for a minimum of
25 years and contribute $10 per square foot of transferred floor area to a fund administered by
the Broadway Initiative, a theater industry not-for-profit organization. This fund would be used
to promote theater use and preservation.

There are approximately 25 theaters, with an estimated aggregate excess of two million square feet
of development rights, which stand to benefit if these regulations become law. That process
ultimately requires approval of the City Council, and is likely several months away.

Robert J. Sorin is a partner with Fried, Frank, Harris, Shriver & Jacobson.