Some last-mile facilities in the city may have reached their… final mile.
In one month, the city will hold a meeting on a proposal that would require developers to obtain special permits in order to build last-mile facilities, the name used for warehouses where packages are sorted and stored before reaching their final destinations.
The environmental assessment statement for the proposal, finished March 28, includes some of the city’s rationale for pursuing this change, including the traffic that results from these warehouses and the resulting effect on air quality.
“These specialized warehouses play a critical role ensuring New Yorkers receive goods ordered online in a timely and efficient manner, but, as demand for deliveries grows, conflicts between the facilities that manage deliveries and city residents have become more acute,” the document states.
The EAS also provides more details on the special permit requirements.
Projects will not require a special permit if they are smaller than 50,000 square feet, rely on waterways rather than city roads for transportation of goods or are more than 500 feet away from zoning districts where housing is permitted, while also meeting “certain electric vehicle charging infrastructure standards” to be determined by City Planning.
The EAS estimates that if special permits are required, roughly seven facilities larger than 50,000 square feet will be built by 2035. If special permits are not required, that number would reach 10.
Those are just projections, and the EAS acknowledges that it is impossible to accurately predict how many facilities would be built. Still, the estimates offer a rosier picture than what opponents have predicted, which is that adding a special permit requirement — which adds considerable time and money to a project — will halt construction of these facilities. Such was the case when the city started requiring special permits for new hotels.
“The industrial sector plays a vital role in the city’s economy and provides thousands of jobs to hard-working New Yorkers,” the Real Estate Board of New York’s Basha Gerhards said in a statement. “The city cannot afford another significant policy misstep like the citywide hotel special permit, which halted the construction of new hotels.”
While this proposal is being reviewed, it will be interesting to see how the prospect of special permits affects the pricing of existing last-mile facilities. You’d expect the value of these properties to go up, but if tariffs drive e-commerce down, demand for these spaces could take a hit.
What we’re thinking about: How are you thinking about tariffs and their broader economic implications? In the immediate, how is this affecting you or your projects? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: The Hotel Association of New York is spending in the “high six figures” on ads calling for a reduction to the city’s hotel room occupancy tax. Citing tariffs, inflation and other challenges faced by the hotel industry, the group, with the backing of City Council members Amanda Farías and Kevin Riley, launched StayNYC. The campaign calls for the occupancy tax to be reduced from nearly 5.9 percent to 3 percent in the city’s budget. The ads feature the phrases: “How do we boost tourism? Don’t tax tourists,” and “Add visitors. Add jobs. Drop the tourism tax.”
Elsewhere in New York…
— Pro-housing group Open New York’s super PAC, Abundant New York, is spending $500,000 in the City Council races. The group announced its slate of endorsements on Monday, backing newcomers Jess Coleman, Shirley Aldebol, Elsie Encarnación and Ben Wetzler, as well as incumbent Council members Pierina Sanchez and Shahana Hanif. The group is endorsing another six incumbents in non-competitive races. City & State was the first to report Abundant New York’s spending plans.
— The Trump administration’s latest round of tariffs could cause the MTA’s construction costs to balloon, Gothamist reports. “When you’re dealing with complex technology, there is a worldwide supply chain,” MTA Chair Janno Lieber said at a news conference. “Even when we build subway cars in New York State … there are parts that come from all over the world.”
— A new report by the Regional Plan Association projects that some 80,000 homes in Staten Island, southeast Queens and the suburbs east of NYC could be lost to flooding in the next 15 years, the New York Times reports. The report also estimates that the region’s housing needs could rise to 1.2 million by 2040 due to residences lost from “permanent, chronic, and coastal flooding.”
Closing Time
Residential: The priciest residential sale Monday was $7.7 million for a condo unit at 50 West 66th Street. The Upper West Side condo is 2,900 square feet. The Corcoran Group’s Hilary Landis and Beth Benalloul have the listing.
Commercial: The most expensive commercial closing of the day was $45 million for an apartment building and surrounding vacant land at 4-34 26th Avenue. The lot area includes more than 28,600 square feet of space.
New to the Market: The highest price for a residential property hitting the market was $70 million for 8 East 62nd Street. The Lenox Hill home is 15,000 square feet and has five stories. The Modlin Group has the listing.
Breaking Ground: The largest new building application filed was for a 55,252-square-foot, eight-story, mixed-use building at 860 Flushing Avenue in Brooklyn. Kao Hwa Lee Architects was the applicant of record.
— Joseph Jungermann