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Q&A
Discussion on office-to-housing conversion and EMCOR program subsidies
0:58:58
·
3 min
Council Member Justin Brannan inquires about the appropriate level of subsidy for office-to-housing conversion projects, specifically mentioning the EMCOR program and votes on 175 Water and 853 Third Avenue. Comptroller Brad Lander and Executive Deputy Comptroller Francesco Brindisi respond, explaining their rationale for approving one project and rejecting another based on market conditions and the necessity of subsidies.
- The discussion highlights the complexities of determining when subsidies are needed for office renovations or conversions.
- Brindisi explains the difference in their decisions for 850 Third Avenue (approved) and 175 Water Street (rejected) based on factors such as market conditions and the likelihood of renovation occurring without additional subsidies.
- The conversation touches on the broader issues of commercial office vacancies and the potential for office-to-residential conversions in certain areas of the city.
Justin Brannan
0:58:58
One last question.
0:59:00
The the office to housing conversion is something that's important to this council.
0:59:04
It was spurred by a bill that this council passed.
0:59:09
I wanted to get, your input on what you think is the appropriate appropriate level of subsidy for these projects, with regard to, the EMCOR program on and the votes on 175 Water and 853rd Avenue.
Brad Lander
0:59:26
Thank you.
0:59:27
So I would I'll point people to the, the newsletter.
0:59:30
We do an economic monthly newsletter.
0:59:32
And in the most recent one, the spotlight is on this question of commercial office vacancies.
0:59:38
And there's a great box, and I'm gonna turn it over to Francesco again because we we go through why we voted yes on, 850 and no on 175.
0:59:50
What are really taking an analysis of when subsidy is needed?
0:59:55
In though though the MCOR program is not for a conversion to housing.
0:59:59
MCOR is, to upgrade it to be, you know, an upgraded office building, and I don't know if Francesco walked through the the decisions you Francesco is our representative on the IDA board and led those votes.
Francesco Brindisi
1:00:14
Our view of the M core program, which is, you know, there is already as of right benefits, tax benefits, for renovation of commercial space.
1:00:23
The M core adds to that.
1:00:28
And we looked at the office market, and we've seen no real shortage of high quality office space.
1:00:33
There is a lot that has been built.
1:00:35
There is a lot on the market.
1:00:36
And there are certainly some areas of the city, some submarkets and some buildings, for which we could accelerate their upgrading.
1:00:46
Let's put it that way.
1:00:48
So we thought that the point of the program is to accelerate and absorb some of this extra supply rather than necessarily having a permanent impact on the city's economy, right?
1:01:03
So there were 2 projects that were presented so far.
1:01:06
1 is on Third Avenue.
1:01:08
It was bought out of essentially bankruptcy.
1:01:10
The lender bought the building.
1:01:12
There was a plausible scenario such that the existence of an extra subsidy really triggered the renovation.
1:01:24
On the other hand, we looked at the details on the renovation of 175 Water Street.
1:01:30
That's in an area which is prime for conversion to residential, so that's one policy issue.
1:01:39
The building itself was built after the deadline that would allow the conversion, but surrounding it it's all conversion to residential.
1:01:48
So that's one issue.
1:01:50
The other is that it was bought by a company that specializes in that type of renovations for the creative economy and firms.
1:01:59
It was bought before the creation of the M Corp program.
1:02:02
And they announced that we're doing a transformational renovation of the building.
1:02:06
So in our view, that investment would have happened anyway, even without necessarily the MCOR program or with the as of right benefits that were available.
1:02:15
And therefore we wouldn't know.
1:02:16
It's a great building.
1:02:17
It's a great idea.
1:02:19
It's It's just that in our view, we didn't need the extra money.
Justin Brannan
1:02:23
Yeah.
1:02:23
We have questions from council member Powers.
1:02:25
We've been joined by council member Brewer.
Keith Powers
1:02:27
Thank you.