New Yorkers want their online orders to materialize at their door as quickly as possible. That doesn’t mean they will welcome a last-mile facility in their neighborhood.
Those conflicting priorities could lead to the next big land use fight. New York’s zoning code does not define these warehouses, where packages are sorted and stored before reaching their final destination. That would change as part of a proposed text amendment that would require developers of such warehouses to first obtain a special permit through the city’s land use review process.
The City Planning Commission is holding an environmental scoping meeting for the amendment this spring.
At the same time, City Planning, the Department of Small Business Services and the Economic Development Corp. are putting together the NYC Industrial Plan, a framework aimed at growing and supporting the city’s industrial sector. That report is required to be completed by the end of December, and then updated every eight years after that.
In the meantime, the City Council is also moving forward with two measures that seek to cut down on air pollution resulting from trucks ferrying packages to and from the warehouses.
This week, the City Council Committee on Environmental Protection, Resiliency and Waterfronts will hold a hearing on the bills, both sponsored by Council member Alexa Avilés.
One measure would create an “indirect source rule” to reduce emissions from warehouses and other so-called indirect sources of air pollution (resulting from vehicles). The bill would require warehouses that are 50,000 square feet or larger and other “indirect sources” of pollution to produce mitigation plans.
The other measure would require the city’s Department of Environmental Protection to identify heavily-use streets and install street-level air monitors at a minimum of two major intersections, as well as at every adjacent park or playground. If air contamination levels violate standards, the DEP, the Department of Transportation and Department of Education will create a plan to reduce exposure risks.
The Real Estate Board of New York wants the City Council to pump the brakes on these measures until the analyses for the special permit and the Industrial Plan are completed.
The trade group, in prepared testimony, argues that these efforts will provide analysis of industrial needs, the land available to meet those needs and the sector’s role in providing local jobs.
Moving forward with the bills before those studies are done “could lead to many unintended consequences and preclude the holistic planning the industrial sector requires to continue as a vibrant part of the city’s economy.”
In a statement, REBNY’s Basha Gerhards said the city should take steps to monitor and reduce air pollution, but it should do so as part of a larger plan for the city’s industrial sector.
“Adopting individual policy measures that are overly broad and restrictive could dramatically impact the city’s economy and put quick deliveries New Yorkers have to come to count on at risk, from medicine to baby formula,” she said.
REBNY did not support a previous effort, led by the Last Mile Coalition and Avilés, to require special permits for last mile facilities, viewing it as a de facto moratorium on construction of such buildings. There’s precedent: A new special permit requirement for hotels halted construction of new ones, and warehouses could meet a similar fate.
City Council members, who would have the final say over whether a warehouse is built under a special permit process, likely won’t clamor to add these projects to their districts. (Remember how the threat of a last-mile facility pushed Council member Tiffany Cabán to support Hallets North?)
Kevin Garcia, senior transportation planner at the New York City Environmental Justice Alliance and a member of the Last Mile Coalition, said the bills complement the special permit text amendment. He said it is important to address emissions of existing and future facilities, and to push warehouse operators to use zero-emission modes of transportation.
He views the special permit as a way to prevent clusters of warehouses.
“We don’t think this is going to be a moratorium on these facilities,” he said. “All we want is for the warehouse facilities to be good neighbors.”
Demand for industrial space in the outerboroughs cooled in the fourth quarter of 2024, according to a report by Colliers out this month. Tenants leased 482,804 square feet, representing a 43 percent drop from the third quarter.
Last year, 3.2 million square feet of new industrial space was built. Most of that space was delivered vacant, further driving up the availability rate, which hit 8.9 percent. The report attributed the higher rate to Ikea’s nearly one-million-square-foot space at 586 Gulf Avenue in Staten Island becoming available.
What we’re thinking about: E-commerce is a key driver of industrial job growth. How do you bolster the city’s industrial sector while also creating more regulations that will likely curb construction of last-mile facilities? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: Marc Morial, president and CEO of the National Urban League, wants the federal government to use proceeds from the privatization of Fannie Mae and Freddie Mac to build homes “for working families, for the forgotten middle class, in addition to those who are hardest hit.” On Wednesday, Morial sent a letter to Bill Pulte, who runs Pulte Capital, to move forward with the privatization of the mortgage finance firms if he is confirmed as head of the Federal Housing Finance Agency.
“We are eager to work with you on an effort to supercharge the construction of much needed
housing in America through the transition of Fannie and Freddie,” Morial wrote.
The Treasury owns equity stakes in the companies that could be worth $190 billion, according to the New York Times. It is unclear how much of that would be dedicated to building housing.
Elsewhere in New York…
— The City Council on Thursday will vote on Apex Development’s Arrow Linen project, two 10-story buildings with 250 apartments, 100 of which are affordable. The vote comes after Council member Shahana Hanif reached an agreement with the developer to increase the number of affordable units, and reduce the height. No units were cut, but the buildings are squatter than originally proposed.
— Mayor Eric Adams on Wednesday announced that his administration is investing $390 million in infrastructure upgrades to address flooding in Bushwick. The work includes replacing nearly three miles of sewers on Knickerbocker Avenue and upgrading catch basins in the area. The funding is part of the $5 billion the administration committed to invest in housing and infrastructure upgrades as part of the City of Yes for Housing Opportunity.
— Attorneys for the mayor have filed a motion to dismiss the criminal charges against him with prejudice, meaning that the case could not be revived at a later date, Gothamist reports. Last week a federal judge assigned an outside attorney to argue against dismissing the charges against the mayor. A hearing is scheduled for March.
Closing Time
Residential: The priciest residential sale Wednesday was $11.7 million for a co-op unit at 101 Central Park West on the Upper West Side. The Wesoky Team at Compass had the listing.
Commercial: The most expensive commercial closing of the day was $40 million for a 30,020-square-foot office building at 165 Mercer Street in Soho.
New to the Market: The highest price for a residential property hitting the market was $14.75 million for a 7,098-square-foot house at 842 Carroll Street in Park Slope. The Parkside Team at Compass has the listing.
Breaking Ground: The largest new building application filed was for a 57,309-square-foot, 11-story, 62-unit residential project at 1095 Jerome Avenue in the Highbridge neighborhood of the Bronx. Suzanna Tharian of Stat Architecture filed the permits on behalf of the Department of Housing Preservation and Development. — Matthew Elo