New York City Set to Take Another Step to Limit New Hotels and Motels - Proposal Would Require Special Permits for New or Converted Hotels or Motels in Light Manufacturing Districts

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HIGHLIGHTS:

  • New York City's City Planning Commission (CPC) is expected to officially propose in the next few weeks an amendment to the City's Zoning Resolution to require that most new hotels and motels in light manufacturing districts (M-1) throughout the City must obtain a special permit from the CPC and the New York City Council.
  • By requiring a special permit, any proposed hotel or motel must go through the City's lengthy Uniform Land Use Review Procedure (ULURP) and an extensive "pre-certification" review process with the City's Department of City Planning. It is not unusual for projects to take two to three years to complete "pre-certification" and ULURP before receiving a special permit.
  • The amendment is the most recent action taken by the City in recent years to limit new or converted hotels or motels.

New York City's City Planning Commission (CPC) is expected to officially propose in the next few weeks an amendment to the City's Zoning Resolution to require that most new hotels and motels in light manufacturing districts (M-1) throughout the City must obtain a special permit from the CPC and the New York City Council. These areas include neighborhoods such as Long Island City in Queens, Hudson Square and the Garment District in Manhattan, Dumbo and portions of Greenpoint-Williamsburg in Brooklyn, Morrisania in the Bronx and many others.

This amendment is the most recent action taken by the City in recent years to limit new or converted hotels or motels. In 2015, the City imposed a two-year moratorium on the conversion of most hotels or motels to residential uses. The moratorium was subsequently extended for another two-year period and is now scheduled to expire on June 2, 2019. More recently, the City has amended the zoning for much of the Midtown Manhattan Central Business District to require that new and converted hotels and motels are not permitted unless they obtain a special permit.

By requiring a special permit, any proposed hotel or motel must go through the City's lengthy Uniform Land Use Review Procedure (ULURP), which entails a seven-month public review and hearing process with the City Council having the final approval. Before ULURP begins, however, there is an extensive "pre-certification" review process with the City's Department of City Planning, as well as the need to undertake an environmental study of the proposed hotel's potential impacts. It is not unusual for projects to take two to three years to complete "pre-certification" and ULURP before receiving a special permit.

The driving force behind the proposal to require a special permit for hotels and motels in M-1 districts (and the other measures to restrict hotel developments) is the New York Hotel Trades Council. The Hotel Trades Council has considerable influence with the City Council, which, as noted, must approve any special permit. Accordingly, any hotel or motel seeking the special permit will likely need to sign an agreement with the Hotel Trades Council.

Once the City Planning Commission formally releases the text of the amendment, along with an environmental impact study (currently expected to occur as soon as April 23), the proposed amendment will be referred to local community boards for review and recommendation before coming back to the CPC and then the City Council. Both the CPC and the City Council will hold public hearings on the proposed amendment and can make modifications to the proposed text before voting to approve or disapprove the proposed amendment. The amendment process typically takes between five and seven months, which would mean that the amendment, if approved, would become effective in late fall or early winter 2018.

Grandfather Provisions and Additional Considerations

The Zoning Resolution contains grandfathering provisions that, in summary, allow a hotel or motel that has completed its foundation by the effective date of the amendment to continue construction. All other hotels and motels under construction will have their permits revoked and be compelled to stop work. A hotel or motel that can demonstrate that on the effective date of the amendment it had completed all excavation work, had a full building permit and had made "substantial progress" on the foundation may request the Board of Standards and Appeals to grant it an additional six months to complete the foundation. However, during the pendency of the proceeding in front of the New York City Board of Standards and Appeals, no work is permitted. We expect that there will be extensive discussions during the amendment process to make the grandfather restrictions more permissive, but it is too early to know whether these efforts will be successful.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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