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REAL ESTATE DIVISION ARCHDIOCESE OF NEw York September 22, 2016 Testimony regarding Draft Scope of Work for Greater East Midtown Rezoning (CEQR No. 17DCP001M) This testimony is submitted on behalf of the Trustees of Saint Patrick’s Cathedral and the Archdiocese of New York. We applaud and endorse the work of the Department of City Planning in building on the civic leadership of the East Midtown Steering Committee, and crafting an ambitious proposal that seeks to accomplish a range of laudable goals for East Midtown. As the guardian of a full-block landmark with significant ongoing maintenance costs, we especially appreciate the elements of the proposal that would allow landmarks to transfer long-held development rights across a broader area than under current regulations. Funds generated from the sale of development rights by Saint Patrick’s Cathedral are essential to its ability to maintain the landmark in perpetuity, as required by the Landmarks Law. In the absence of transfer opportunities, the cost of this preservation diverts resources from the ever- growing needs of the Church’s mission, including operation of our school system, production of low-income housing, and providing support services for the City’s most vulnerable residents, As the scope of the environmental review of this proposal is developed and finalized, we urge consideration of the following: 1. Percentage contribution from landmark transfers: The draft scope of work indicates that a percentage of the proceeds from each sale of development rights from landmarked properties will be required to be deposited into a fund for public realm improvements unrelated to the landmark site. We have serious concerns about this policy. Our obligation to both maintain the landmarked Cathedral as well as provide services for New York City's neediest citizens, profoundly emphasizes the importance of maximizing the revenues from development rights sales. For the City to tax this critically important source of funds erodes the very purpose of allowing flexible transfers. Moreover, the burden falls most heavily on religious and other not- for-profit owners who do not generate any revenue from their historic structures and are generally (as a long-established matter of public policy) exempt from taxation. We therefore recommend that the Scope of Work study the impact of diverting funds from sales of landmark development rights on the ability of religious and not-for-profit owners to maintain their properties as required under the Landmarks Law. 1011 First Avenue, New York, N.Y. 10022 Tet 212-371-1000 Ext. 2676 Fax 21 2. Floor Price: The draft scope of work indicates that the zoning proposal requires.a minimum “contribution” from every transfer of development rights from a landmark, regardless of the actual value of the transaction. This minimum contribution will unduly limit the resources available for the preservation of landmarks, by potentially inhibiting transactions at the lower end of the price spectrum. In addition to potentially limiting the resources available for landmark maintenance, we expect the proposed floor price to have the effect of decreasing funding available for public realm improvements and stifling the very re-development that the city is seeking to facilitate. It would be best to permit the market to establish fair value, rather ‘than to impose price controls as proposed. ‘We therefore urge study of the impact of diverting sale proceeds from the needed preservation of landmarks by imposing a floor price on transactions. We also urge study of the impact on development that these impediments to transactions will have, 3, Broader Development Framework: The draft scope of work implicitly assumes that the proposed densities will provide sufficient incentive for development of “world class” office buildings within the proposed subdistrict (and thus facilitate transter of development rights from landmarks). We would like to see the studies which demonstrate the-feasibility of this new construction, particularly where an operational building is to be taken out of serviee for speculative development, Pending consideration of feasibility studies, we urge that the environmental review study a broader redevelopment framework as follows: © Higher densities through landmark transfers, particularly in the Park Avenue cotridor, to ensure sufficient development incentives; * Extending applicability of the proposed controls to sites without avenue frontage; © Permitting a greater percentage of residential development than currently suggested, particularly along Third Avenue and the side streets. 4. Vanderbilt Corridor: The current proposal allows only a limited range of landmarked properties to transfer development rights into the Vanderbilt Corridor. The potential development parcels located in this district could be the site of very large commercial structures, capable of receiving significant amounts of transferted development rights. To be excluded from this opportunity would unfairly penalize many of the district's landmarks, and not be consistent with the recommiendations of the Steering Committee. Given the stated goals of facilitating transfer of all excess development rights from landmarked properties in the rezoning area, we recommend study of the district-wide implications for the preservation of landmarks of not permitting transfers into the Vanderbilt Corridor. ‘Thank you for the opportunity to provide input and for your continuing hard work on this worthy initiative.

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