The recently adopted City of Yes for Housing Opportunity (COYHO) text amendment effected a sweeping overhaul of the city's zoning regulations, as discussed in our recent client alert. In the coming weeks, Kramer Levin will be releasing additional alerts that discuss some of COYHO's most significant components in greater detail. This alert addresses COYHO's changes to the regulatory framework for landmark transfers—changes that will significantly expand opportunities to utilize, and realize value from, development rights generated by landmark buildings.
Kramer Levin is the industry leader in landmark transfers. Members of our department represented the applicant in nearly all of the transfers that were approved under the prior framework, and we are now engaged in transactions proceeding under the new framework.
The landmark transfer regulations that preceded the adoption of COYHO were limited in their reach and efficacy. The transfer mechanism was not available in historic districts or in R1 through R5 districts, and transfers were allowed only to "adjacent lots," meaning zoning lots that were contiguous with, directly across the street from, or diagonally across an intersection from the landmark zoning lot. Transfers also required a City Planning Commission (CPC) special permit, making them subject to discretionary land use and environmental review processes that added time, cost, and uncertainty to transactions. The regulations failed to produce meaningful results, yielding fewer than 15 landmark transfers over the course of more than 50 years.
The changes under COYHO will create significant new opportunities for landmark transfers and make it easier to take advantage of them by reducing the regulatory barriers to transactions. Here is an overview of the new framework:
- The transfer mechanism is available to individual landmarks in all zoning districts throughout the city, including those located in historic districts.
- The universe of eligible receiving sites for a landmark transfer is significantly larger than before. Floor area may be transferred from a landmark zoning lot to any receiving site – that is, the zoning lot on which the project utilizing the rights is proposed – in the "surrounding area," which is defined generally to include (i) all zoning lots located on the same block as the landmark and (ii) all zoning lots located directly across the street or diagonally across a street intersection from the block containing the landmark.
- Landmarks located in zoning districts within which the maximum FAR is higher for community facility uses than for other uses, including R4, R6, R7-2, R7-3, and R9 districts, may now have a larger amount of development rights to transfer, based on an updated methodology for floor area calculations.
- Transfers now will require only a CPC certification, a ministerial action. As under the prior framework, the landmark building must be submitted to a continuing maintenance program as a condition to approval. Transfers will still require the Landmarks Preservation Commission to issue a report to CPC concerning the continuing maintenance program.
- Bulk modifications may be granted to the receiving site to accommodate the additional floor area. Bulk modifications that do not entail a height increase of more than 25% require a CPC authorization. Height increases of more than 25% require a CPC special permit.
- The increase in floor area on any receiving site may not exceed the basic maximum floor area by more than 20% or, in 15 FAR commercial or manufacturing zones, more than 30%. Transfers in excess of 30% in such districts may still be approved by CPC special permit.
Kramer Levin is available to assist in evaluating opportunities under the updated transfer mechanism.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
