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Monday, October 18, 2010

Zoning for Minority Jobs at 15 Penn Plaza

For all of you zoning aficionados who are looking for skyscraper-high piles of legal and policy issues to pack into a single problem, 15 Penn Plaza may be your dream parcel. The site is owned by Vornado, a major REIT in New York City which has been seeking to build a 1,216-foot Rafael Pelli-designed skyscraper on the Hotel Pennsylvania site opposite Madison Square garden on Seventh Avenue. New Yorkers know 15 Penn Plaza as the proposal that would would supplant the Empire State Building as the tallest tower in NYC, much to the chagrin of Anthony Malkin, ESB's owner. But the building has another claim to fame: The City Council approved the re-zoning permitting Vornado to acquire the extra floor-area ratio ("FAR") necessary to top the Empire State Building only on the condition that 15% of the contractors hired for both "hard" (e.g., electrical, plumbing, ironwork, etc) and "soft" (e.g., financing, architecture, legal, etc) costs be minority- or female-owned firms. Apparently, City Council slipped this condition for the re-zoning in at the last minute: Mayor Bloomberg was unaware of the requirement until apprised by the press.

One might think that there is a towering Croson-style 14th Amendment problem with this last-minute condition on a zoning map amendment. But who would have standing to raise it in litigation? Vornado is obviously not going to challenge the condition, given that the set-aside helped induce the City Council to approve the extra FAR. Disappointed contractors bidding on work would face causation difficulties: They might have to argue that, but for the city council's condition, Vornado would not have adopted a 15% set-aside -- a tough proof, given that the City Council could have unconditionally approved a big tower so far as state and federal law was concerned. (Standing requirements sometimes mysteriously get relaxed in affirmative action cases, so one cannot rule out standing in an Equal Protection challenge based`on "integrity-of-the-process" grounds).

I suspect that any federal constitutional questions are over-shadowed by the larger and less legalistic policy problem of ad hocery in re-zoning policy. Having city pols pile on pork for their constituents through re-zoning without data or standards, is a recipe for lousy policy-making. Sadly, there is no obvious state law "fix" for this sort of egregious lawlessness.

Consider, first, the gap between the city council's posturing and the data or study that would be needed to make 15% a plausible number. Since even Bloomberg did not know about the 15% proposal, one can be sure that there is no study from DCP or Planning Commission suggesting that there is a significant pool of minority-owned engineering, law, and architectural firms standing ready to perform the work that Vornado requires. One suspects, therefore, that, if Vornado actually keeps its promise (which I deem unlikely), they will do so with firms that use front-men and phoney owners to qualify. In effect, "minorities" (however defined) will be retained to rent out their ethnicity to firms that would get the work without the requirement. Whatever the egalitarian merits of a real set-aside policy, such a policy requires careful definitions, decent data, and meaningful policy goals. The eleventh-hour posturing of council members looks like either empty rhetoric or mere pork for for council members' pals.

Are there plausible remedies for such ad hocery rooted in state or local zoning law? Yes -- but state judges would have to be willing to impose some sort of substantive limits on the now-freewheeling bargaining process that constitutes NYC re-zoning. In an administrative context, state supreme court judge Edward Lehner famously struck down a sale of city property back in 1987 where the price was contingent on the buyer's getting extra FAR approved by the City's Planning Commission, on the theory that the city was effectively "selling" its zoning power for cash, for which there was no provision in the zoning resolution.

One might reason that, if zoning for dollars is illegal, then zoning for quotas might also face some legal problems. But Judge Lehner's doctrine was imposed on an administrative agency's implementation of the special permit process, a procedure governed by standards contained in the zoning resolution. No such substantive limits on the city's legislative re-zoning process are contained in either the City's charter or the City's zoning resolution. Section 197-c of the City Charter provides merely a procedural framework for re-zoning -- the "Uniform Land Use Review Process" (ULURP) -- but this framework is mere "zoning theater" -- a lengthy routine to give residents their minute at the mike in a Potemkin Village of zoning democracy. (Since the design decisions are generally resolved in pre-certification before the Planning Department, the various hearings before Community Boards are strictly for entertainment, as nothing about the proposals changes as a result in most cases). There are no substantive limits in ULURP that any court could enforce.

To extend Lehner's Municipal Art Society decision to the legislative side of zoning, a state judge would have to invent some substantive limits on the City Council's power to sell off development rights. 15 Penn Plaza might be a plausible vehicle for such a challenge, if only because the state judge could import some substantive standards straight from federal constitutional law. But do New Yorkers really want Culture War fights over affirmative action infecting the zoning process on the heels of the "Ground Zero" mosque farce? The issue should be the merits of eliminating lawless ad hocery in the zoning map amendment process, not the merits of racial set-asides. Sadly, given the last-minute opportunities for empty posturing and/or constituent pork afforded by standardless discretion, this is one issue that council members and the state legislature are most likely to leave unaddressed.

Posted by Rick Hills on October 18, 2010 at 09:00 AM | Permalink

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Comments

Without getting into the technical aspects of zoning law and arguing about things I'm not competent in, isn't this a good example of federalism in action? A local government is, after all, experimenting with ways to achieve greater diversity. If we want the benefits of policy experimentation we have to accept that, by definition, experiments sometimes fail. Looking to state or federal remedies seems to go against federal principles. Shouldn't the main method of fixing abuses of local zoning authority be businesses "voting with their feet"?

Posted by: Andrew MacKie-Mason | Oct 18, 2010 9:18:34 PM

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