New York City Last-Mile Facility Special Permit Study

The special permit is likely to serve as a deterrent to future development of last-mile facilities and
conversion of existing warehouses to last-mile use. Pursuing a special permit requires undergoing an
extensive public review process without a guaranteed outcome; the timeline and entitlement risk would
make the special permit very unattractive for developers and property owners, as indicated by
stakeholder interviews conducted for this study.

The special permit for hotels in M1 (light manufacturing) districts created in 2018 demonstrates the
likelihood of this impact. Since the implementation of that regulation, no M1 hotel special permits have
been approved. In other words, the special permit has served to eliminate all new hotel development in
M1 districts to date.

HR&A Advisors (HR&A) conducted this study on behalf of the Real Estate Board of New York (REBNY) to
understand the potential impacts of the last-mile facility special permit on New York City. This study seeks
to answer the following questions:

1. What are recent market trends in the development of last-mile facilities in New York City?
2. What has been the impact of the growth of the last-mile sector in New York City?
3. What would be the impacts of a special permit for last-mile facilities be on New York City, in terms
of economic activity, tax revenues, the environment, and transportation?
4. Are there alternative policy approaches that would more effectively advance New York City’s
sustainability goals?

The study concludes that a special permit will not effectively advance New York City’s sustainability goals
and that alternative policies can better address these concerns.