Thinking about Zoning's Relief Valves

Julia Vitullo-Martin, September 2005

The Board of Standards and Appeals is a little-understood agency that allows New York's intricate system of zoning and regulation to function by providing a forum for hearing and relieving hardship cases. No zoning code can successfully anticipate the many complexities of land use in any immense city—and New York's hasn't. "Without the BSA acting as a constitutional relief valve," lawyer Howard Goldman says, "the city would be subject to ongoing claims under the takings clause of the constitution, which says that private property cannot be taken for public use without payment of just compensation. The BSA was established to grant relief based on unique physical conditions." Yet because the relief can amount to a windfall, every one of the 400 or so annual BSA reviews becomes potentially suspect, particularly to community activists.

Indeed, every BSA variance is by definition an end run on the zoning resolution that is supposed to govern all land use. Nearly every major variance causes some neighbor—and often hundreds of neighbors—to ask if the board has behaved properly, fairly, and legally. Criticism of the board historically has mostly fallen into two categories: it's corrupt or, it's incompetent. Some charge both.

WHY HAVE A BSA?

The board was born along with the city's first zoning code in 1916. Its five commissioners (down from the original thirteen) are appointed by the mayor for six-year terms. Three slots are defined by profession—one must be a planner, one an architect, and one an engineer. The other two slots have no professional restriction. No borough can be home to more than two commissioners.

The board's basic business is to grant the exceptions to the zoning code called variances. Its judgments will, for instance, permit a developer to build a residential tower in a commercial zone, or a much bulkier building in any zone. A quasi-judicial body, the board hears and decides petitions from property owners whose applications to construct or alter buildings or to convert property to a new use have been denied by the city's enforcement agencies—the Department of Buildings, the Fire Department, and the Department of Business Services.

"There are inevitably cases where the physical characteristics of a particular piece of property don't fit the rules in the zoning resolution, and development would be impossible or extremely costly," Goldman says. Yet getting a variance isn't easy. An owner must show that the property meets five requirements.

  1. The site must have unique physical conditions, such as an unusual shape.
  2. The owner needs the variance to obtain a reasonable return on investment.
  3. The variance will not alter the neighborhood's "essential character."
  4. The owner did not create the economic hardship.
  5. The requested change is the minimum necessary to grant relief of the hardship.

These requirements are stringent, and in the last two decades the board has been meticulous and hard-working in its attention to detail. Yet the accusations that regularly swirl around BSA actions are damning. "The BSA is absolutely a power unto itself," alleges Queens Councilmember Tony Avella, who introduced a bill last year giving the City Council oversight of BSA decisions. "They're more concerned with profit than improving the neighborhood," a Harlem activist charges. "They're the pawns of speculators," a West Sider insists. "They give away the store every day," another says.

GIVING AWAY THE STORE?

Giving away the store, couched in nicer language, was pretty much the point of the March 2004 study of the BSA by the Municipal Arts Society. "A deeper investigation of the variance process" yielded troubling data, wrote MAS. "A very high approval rate coupled with the very limited court review that is provided to BSA decisions ensures that most variances are approved." Of the 137 decisions that MAS reviewed for the study period of 2001 and 2002, 93 percent were granted, and only 7 percent denied.

But this number is misleading. The most relevant number, mentioned but then ignored by MAS, is the number of applications—258. Over 100 applicants withdrew, most because they knew their petition would be denied.

"Withdrawals are an important part of the process," BSA executive director Pat Pacifico emphasizes. "The applicant sees the case isn't being well received and says, in effect, you know what? We got the hint. Or, you know what? We're going to go back and build as of right. Forget the application."

Even if the MAS were calculating its numbers on the correct (and larger) base, the approval of most variances does not really prove anything. Because the BSA process is cumbersome and costly, only the strongest cases make it to the board. The saga of the RKO-Keith Theater site in Flushing, Queens, shows just how costly, cumbersome, and unproductive that process can be—even for a project that the community strongly supports.

After being nearly destroyed in 1986 by owner Thomas Huang, who demolished sections of the exterior and spilled hundreds of gallons of oil in the basement, the RKO-Keith Theater sat vacant and vulnerable, blighting its neighborhood and dragging down property values. Boymelgreen Developers, a highly respected firm, bought it in 2002, and proposed a 19-story, 375,000 square foot mixed-use building. This was about three times what zoning allows as of right. A spectacular design by a renowned architectural firm, the V Studio of the WalkerGroup, did not sufficiently mollify the community's concerns about the building's size. In February 2004, Community Board 7 voted 35-0 not to approve it.

The architect scaled it down from a FAR of 9.5 to a FAR of 7.5, eliminating the interior retail mall and most office space, making the project largely residential with only ground-level retail. The new design retained features important to the community, including a 12,500 square foot senior center and four levels of parking. In February 2005, the community board voted 32-2 to approve it.

Nonetheless, the Board of Standards and Appeals, which had to authorize the variance, was intent on cutting the project back further, to a FAR of 6.5—despite extraordinary support for the 7.5 FAR from the community board, residents, and all elected officials.

Boymelgreen said 6.5 was unworkable financially. The site offers tough design problems for many reasons, not least because the theater's interior, which is landmarked, had been badly trashed. Calling this part of the site "the egg," V Studio Principal Jay Valgora testified that preserving it while trying to build on top of and around it presented him with the "most complex job of sequencing" he had ever faced as an architect. It also presented him with very high construction costs of $238 per square foot. "The costs of preserving the egg are constant," he said. "We need a variance for greater bulk to offset these costs. If we're forced to go down to 6.5 we'll have to produce an inferior building, with punched windows and a far less articulated facade."

While the apartments will be sold at very handsome prices of between $470 and $623 per square foot ($337,000 to $1.2 million), the developer's profits will be low—3.3% at the 7.5 FAR requested by the developer, or 1.5% at the 6.5 FAR preferred by the Board of Standards and Appeals. At the most recent public hearing in September, BSA Chair Meenakshi Srinivasan repeatedly asked why the developer could not provide all of the same amenities they propose at 7.5 for a smaller building at 6.5. In particular, she insisted on the full parking provided in the original design at the FAR of 9.5. But that project carried a generous profit that would cover the expense of drilling deep into the ground for multi-level parking. The site is close to Flushing Bay, whose high water table makes drilling unusually difficult.

Because it looked like the BSA was going to demand additional public hearings—adding at least six months of delay—the developer proposed a compromise. He would find a parking solution by cutting back on residential space. This, of course, will reduce his profit further, but is preferable to more delays.

Yet this is not a controversial project, nor one opposed by the community. On the contrary, it's a project that everyone wants. Councilmember John Liu spoke for most when he testified, "We want this building resurrected from the dead, and we really don't want to wait much longer."

WHAT’S NEXT
The community will have to wait. The BSA has told the developer to return with additional analyses and plans on Oct. 18, and has scheduled a continued hearing date for Nov. 2, when the BSA may set a final decision date for a month later. Even if the BSA eventually approves a FAR of 7.5 by the end of the year, as expected, construction is unlikely to begin. The building won't open until 2007, if all goes well. In other words, the site will continue to blight the neighborhood far longer than necessary. The lesson: The BSA was set up in 1916 to ensure that this kind of excellent project could go through, even when controlled by outdated zoning. Let's look at every proposed reform of the BSA to make sure good projects are not impeded even more than they are today.