- REAL ESTATE EDUCATION
- GIVING BACK
The Real Estate Board of New York to The Subcommittee on Zoning and Franchises of the New York City Council Regarding the SoHo/NoHo Neighborhood Plan
November 9, 2021
The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association representing commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople, and other organizations and individuals active in New York City real estate. REBNY appreciates the opportunity to submit testimony in strong support to the City Council regarding the SoHo/NoHo Neighborhood Plan (ULURP Nos. C210422ZMM and N210423ZRM; CEQR 21DCP059M) in the Borough of Manhattan.
The historical and cultural significance of the SoHo/NoHo neighborhood cannot be overstated. Encompassing the largest collection of cast iron buildings in the world, its architecture cements its status as a unique and special environment worthy of protection. However, this can be done while also comprehensively reviewing the current zoning text to modernize the district without sacrificing its vibrant character.
Retail is an important component of this vibrancy. From an economic perspective, SoHo/NoHo in recent decades has been a significant driver for the Manhattan economy, and for New York as a whole. Much of this is due to SoHo/NoHo being viewed today as one of the city’s premiere retail destinations. With $3.1B in retail sales annually, SoHo and NoHo outperform all retail districts in New York City except for Fifth Avenue, and between 2002 and 2015, retail job growth increased by 40%, creating more than 4,300 jobs and providing economic mobility for thousands of New Yorkers. Equally as important, economic activity from SoHo/NoHo generates upwards of $1.2 billion in tax revenue for the city annually, a significant boon for city coffers.
However, the commercial success of the neighborhood is not guaranteed forever. E-commerce trends have continued to accelerate while the costs of doing business and the overly complicated regulatory framework of the neighborhood remains. A draconian regulatory regime will dampen future opportunities to adapt to changing market conditions. The City has an obligation to ensure a continued retail presence in SoHo/NoHo so that it will remain a mixed-use neighborhood. As a result, the time is now to identify new opportunities to create flexibility for businesses looking to expand or locate into the neighborhood. This includes eliminating the need to comply with a complex set of regulations including size and use restrictions and the requirement of a special permit.
The compliance issues in SoHo/NoHo today stem from the neighborhood’s history as a manufacturing-based area for the city, quite different from how the neighborhood is utilized today. Since 1977, M1-5A and B zoning district designations intended for manufacturing have been completely out of context with the mixed-use neighborhood SoHo/NoHo has become. As a result, while heavy manufacturing is legal for SoHo/NoHo and one could open a tannery with no zoning constraints, retail uses which are predominately through most of the district cannot. In Use Group 6, retail uses of up to 10,000 SF are not permitted as-of-right below the floor level of the second story in the M1-5B zoned areas of the neighborhood and are only allowed below the floor level of the second story in M1-5A district in buildings with less than 3,600 SF of lot coverage. Use Group 10 regional and attraction retail, typically 10,000 sf of zoning floor area or more, and for which SoHo is known, is not allowed as-of-right in any of the neighborhood currently.
The proposed zoning map and zoning text change would correct the outdated requirements. The City Council should support allowing ground-floor Use Group 6 retail, space prime for smaller retailers, to be as-of-right throughout SoHo/NoHo, with some low impact retail uses also allowed on upper floors. In addition, along the Broadway and Lafayette corridors, Use Group 10, for large retailers, should also be allowed as-of-right on the second floor and below. This change will not create a commercial free for all nor will it permit the cannibalizing of higher floors for retail. These changes will reasonably align the zoning with retail needs.
SoHo/NoHo’s success as an economic commercial hub relies tenuously on the discretionary exceptions permitted under the zoning resolution, through special permits, variances, or grandfathering of a building’s existing use over the past three decades. As documented by the Department of City Planning, these mechanisms are incredibly complex, time-consuming, and costly, often taking years to navigate. Certainly, the process and framework has created a deterrent for additional economic opportunity for the neighborhood over the years.
This paradigm must change for the future success of the neighborhood. Creating opportunities for as-of-right retail in appropriate settings is the most concrete step that can be taken to bolster retail, maintain and further job growth, and secure SoHo/NoHo’s economic future in the years to come.
Supporting SoHo/NoHo in the coming decades requires opportunity for new investment and innovation. The current zoning framework does not accommodate that investment. REBNY greatly urges the City Council to adopt the zoning map and zoning text amendments so that the vibrancy of SoHo/NoHo’s architecture can be matched with a vibrant mix of uses.
Thank you for the consideration of these points.