CASE STUDY: NEW ROCHELLE ZONING & PERMITTING INNOVATIONS UNLOCK OPPORTUNITY
BY SALIM FURTH AND PHILIP WHARTON
(702) 546-8736 | BETTER-CITIES.ORG ANNUAL REPORT - 2019/20
M I S S I O N
BCP uncovers ideas that work, promotes realistic solutions and forges partnerships that help people in America’s largest cities live free and happy lives. ANNUAL REPORT - 2019/20 BETTER-CITIES.ORG
CONTENTS
ABOUT INTRODUCTION: 2 NEW ROCHELLE ZONING REFORM AND COMMUNITY TRANSFORMATION A BOLD STEP New Rochelle, New York, is a dramatic example of how zoning re- 3 FOR REFORM form can attract investment and generate economic growth for a community:
n The city employed innovative planning processes to reduce un- certainty for everyone involved. THE NEW PLAN n Private investments in the billions have surged into the 4 once-stagnant city.
n After a public/private process put zoning reforms in place, eco- nomic activity followed, including job creation across many sec- TWO KEYS: tors, new building fees and incremental taxes to the City. 6 A MASTER n And the new jobs, fees, and taxes generated from that invest- DEVELOPER ment have already greatly improved the fiscal health of New AND GENERIC Rochelle, at a time when the health of many municipalities is ENVIRONMENTAL in peril. IMPACT STUDY Two ingredients in New Rochelle’s success stand out: the master developer and the Generic Environmental Impact Study (GEIS). By selecting a master developer — and compensating it with real es- tate options — the city guaranteed that at least one builder would have a vested interest in the city’s success. The GEIS replaced the IMMEDIATE usual uncertainty of project-by-project studies which may result in 8 IMPACT significant changes in cost and timing. Instead, New Rochelle of- fers an up-front fee formula, so potential bidders know the costs and every competitor has the same information.
New Rochelle took a look at its zoning, picked a developer and together streamlined its process — and the results have been ex- LEARNING FROM
traordinary. 10 NEW ROCHELLE 1 PAGE PAGE 2 BETTER CITIES PROJECTBETTER New investment came to a standstill in 2007 and showed no signs of returning. of returning. signs no showed and 2007 in to astandstill came investment New adversarial. frequently and was slow, risky, process development existing the but renovated, were to 2007, storefronts 2004 some from up and went buildings few new 1970s the 1980s. during and A malls to shopping of retailers exodus the since ment invest new little attracted healthy, had it remained Rochelle New downtown Although institutions, and transportation links. civic shopping, jobs, with space, shared acrucial is Downtown Black. and Hispanic predominantly and class working is city of the part southern the while region the in homes expensive most of the some include north city’s the in areas suburban Sylvan New York metro area. is diverse, closely mirroring the of demographics the wasManhattan. city The founded in 1688 today and located in Westchester County, 20 miles of northeast New Rochelle of is approximately acity 80,000 people NEW ROCHELLE ABOUT
- through the approval and process. permitting in a path cleared restrictions and districts “overlay” downtown new zoning simplified they Additionally, fordable and culture. housing, arts, af to provide incentives and fees of impact schedule a clear and study environmental a preemptive with first move would city the process, hearing community and review environmental uncertain an on dice the roll and land expensive to buy developers for of waiting Instead head. its on process development the flipping by everyone benefit could they realized leaders City and space. open funding for arts able housing and afford new ing includ key goals identified izens cit process, that sions. Through ses listening lic groups and pub community with meetings through input community RDRXR sought year, the and city neer its planning and approval process. Over the following re-engi city the to help developer asmaster companies, development for-profit two of venture joint a RDRXR, ed select city the process, proposals for arequest Through tookAragon action. Development Commissioner Luiz In 2014, Mayor Noam Bramson and A BOLD STEP STEP BOLD A FOR REFORM FOR - - - - - ITS HEAD. ITS PROCESS ON DEVELOPMENT THE FLIPPING BY EVERYONE BENEFIT COULD THEY REALIZED LEADERS CITY - - - BETTER-CITIES.ORG
PAGE 3 PAGE 4 BETTER CITIES PROJECTBETTER n SCHEDULE BENEFIT COMMUNITY FIXED A n n PROJECTS COMPLIANT FOR MINISTERIAL APPROVAL n n (GEIS) STUDY IMPACT ENVIRONMENTAL GENERIC the of end 2015, and consisted of the following key elements: This plan was passed unanimously by the New Rochelle Council at City
Planning Board verifies compliance within 90 days90 within compliance verifies Board Planning project. compliant of any studies environmental for requirement state the Satisfies plan. new the of 10 under pact of growth years im & environmental infrastructural the Estimated A formula for “fair share” fees, which fund ex fund which fees, share” “fair for A formula ifCouncil requirements are met City or Board by Planning review discretionary No
THE NEW PLAN NEW THE - - n n n OVERLAY DISTRICTS DOWNTOWN n n ter to 5 stories at the edge of downtown. edge the at ter to 5 stories cen the at stories 48 allowing from vary zones The dictates. market the as uses other and office, retail, residential, match to and mix builders allows but rules, frontage street and height sets code new the “Form-based”: 275Cover acres rates. below-market at units more aside ting set or space, cultural or arts preservation, historic by funding bonus aheight “buy” could builder Any rates. below-market at of units percent 10 to offer required were buildings residential All growth. new accommodate which schools and services, of infrastructure, pansions - - DOWNTOWN OVERLAY ZONES 175.08G DOwnt City ofNewRochelle
ish until DO-6, the furthest fromish untilDO-6,thefurthest thetrainstation,where themaximumheightissixstories. is permitted. In DO-2, the next rung, the maximum heightdropsbuilding to 28 stories, which continues to dimin the properties located in DO-1, a large lotthat made useofall availableof 48stories a building density bonuses, The zones are arranged in concentric circles emanating from the Metro train station, which is in DO-1. For North lot —thelarger thelot,highernumberoffloorspermitted. of the area of New Rochelle. Each ofthe overlay zones has its own density levels, bywhich inturnvary size of The DowntownDistrict was divided intosix overlay zones ina rezoned area of 280acres, which is less than 5% NEW ROCHELLEDOWNTOWN OVERLAY DISTRICTS MAP
COLIGNI COLIGNI
OOD OOD W BEECH
LINCOLN AVE
Own OVerLay
A
VE
EBSTER EBSTER W
A
E V HILLTOP AV
A E
V PINE ST
ROCHELLE PL
TREN
Y W H ORIAL M E
M LOCKWOOD AVE N
OR O ST
ZO T
AVE
H 5th AVE I-95 BURLING LN ST MAY
nes Districtmap AUFORT PL AUFORT E B
RE AVE RE T N E
MAIN ST C STATION PLZ S
MAPLE AVE MAPLE
ORCHARD PL ORCHARD DIVISION ST DIVISION
Y W H ORIAL M E M
I-95
T COT
T LAW
DAVIS AVE PL AGE
ON ST ON
N
ORT
AVE PROSPECT ST H
HUGUENOT ST
T N LECOU
DAVIS AVE PL
st
CHURCH ST CHURCH
DAR ST DAR E C
N
ORT
ST N HARRISO
AVE H
DOwnt peDestrian w ciVic sp 6-st Frequent entryways requiD DO-6 nOrthOFLicOLDistrict DO-5 weLLnessDistrict DO-4 riVerstreetcOmmciaL DO-3 Gateway DO-2 DOwnt DO-1 wnt LOCUST AVE LOCUST
OreFrnts quiD R ST R E RIV Ory Own OVerLay ace requiD maximumBuiLDinGhet LAF
AYETTE ST Own District Own cOreDistrict
transiOnDstric BAYVIEW AVE ay
RANKLIN AVE RANKLIN F requiD
MAIN ST DistrictBOunary ECHO AVE ECHO BETTER-CITIES.ORG
District 1 Section 331
-
PAGE 5 PAGE 6 BETTER CITIES PROJECTBETTER TWO KEYS: AMASTER DEVELOPER AND AGENERICENVIRONMENTAL The masterThe developer, was RDRXR, involved from the be been a flop, RDRXR would have lost that money. that have lost would RDRXR a flop, been had plan new If the game: the in skin gave RDRXR That lots. parking town city-owned down several to purchase options with RDRXR compensated and consultants the for pay RDRXR had Rochelle New of pocket, out services consulting the pay for than Rather services. of city expansions necessary the fund would downtown agrowing that so fees share fair set city the GEIS, the Using to pass. came development that all if infrastructure on impact the GEIS estimated The rules. new the 10 under next over the years grow would Rochelle New downtown much of how jection a pro on based of development (GEIS) impact the study to address impact vironmental en ageneric sponsored RDRXR plan, redevelopment the approved council city the After Rochelle). New with engagement of its leader was a and time, the at RDRXR for worked Wharton, authors, of the one disclosure: (Full front. up options and prices the knew they provided — benefits community provide and to fees pay happy be would developers that citizens and city the convince helped RDRXR see theginning through helped and city abuilder’s eyes. IMPACT STUDY - - - - height. The potential bonus differs by zone. Developers choose which community benefits to offer at each site. each at offer to benefits community which choose Developers zone. by differs bonus potential The additional height. for exchange in provide can developers benefits community craft to process year-long a in groups civic and residents with worked city the community, and developer between process adversarial of an place In Fund Benefits Community Housing Open Space Pedestrian Passage Green Transit and Parking FacilityCommunity Space Cultural and Arts Historic Preservation BONUS CATEGORY A FORMULA FORA FORMULA SUCCESS immediately following passage of Overlay Overlay of passage following immediately forth set locations and guidelines meeting developer), by (maintained passage public of developer by provision permanent for is and off-site or on- taken be may Bonus la. Formu per bonus, potential of 50% 25% or Board Planning by approval with ment Develop of Commissioner the of cretion dis at provision, of significance on based bonus, 100% or potential of 50%, 25%, based on contribution rata pro bonus, to 100%Up potential of Board Planning by approval with Development of Commissioner of cretion dis at provision, of significance on based bonus, 100% or potential of 50%, 25%, Board Planning by approval with Development of Commissioner of cretion dis at provision, of significance on based bonus, 100% or potential of 50%, 25%, Board Review Landmarks Historic by approval with ment Develop of Commissioner of discretion at preservation, of significance on based bonus, 100% or potential of 50%, 25%, Up to 100% of potential bonus. to 100%Up potential of Board Planning by approval with ment Develop of Commissioner the of cretion dis at provision, of significance on based bonus, 100% or potential of 50%, 25%, Board Planning by approval with ment Develop of Commissioner the of cretion dis at provision, of significance on based bonus, 100% or potential of 50%, 25%, Board. Planning by approved and Development of Commissioner by Zone BONUS ELIGIBILITY ------of Development and approved by the Planning Board) Planning the by approved and Development of Commissioner the by (as determined time” of period “substantial a for discount” a“substantial at organization cultural and arts an for space” a“meaningful of off-site, or on- developer, by Provision Board) Review Landmarks Historic the by approved and Development of Commissioner the by (as determined way” appropriate “historically an in structure” significant “historically an of aportion or all of thereof), bination (or acom off-site or on- developer, by preservation Permanent Fund Amount/gross bonus SF to Community Benefits Fund. Benefits to Community SF bonus Amount/gross Fund Benefits Community applicable of developer by Contribution n n following: the of one of developer by provision Permanent Zone. Overlay of passage following immediately forth set guidelines meeting Board), Planning the by approved and Development of Commissioner the by determined as and developer by (maintained space” open public ingful a“mean of off-site, or on- developer, by provision Permanent n n n Board) Planning the by approved and Development of Commissioner the by (as determined regulation other or zoning by required is what etc.)beyond microgrid, certification, LEED (e.g., elements” green “meaningful of on-site of Incorporation Board) Planning the by approved and Development of Commissioner the by (as determined City to the satisfactory economics of allocation and terms operating with City, the by offered parking public with consistent space per costs at public to the open spaces parking of number” tial a“substan of off-site, or on- developer, by provision Permanent Board) Planning the by approved and Development of Commissioner the by (as determined time” of period “substantial a for discount” a“substantial at organization cultural and arts an for space” a“meaningful of off-site, or on- developer, by Provision Highway and Division Street Division and Highway Memorial between passage public for bonus potential of 25% Highway Memorial and Place LeCount between passage son Street Harri and Place LeCount between passage public for bonus 11%-20% of units @ 80% AMI Community Benefits Fund Benefits 11%-20% Community AMI @80% units of AMI @80% units of AMI/5% @60% units to 5%of Up Passage: Rochelle”) New (“Halstead Highway Memorial 40 public for bonus potential of 50% Passages: Developer Master potential of 50% Passage: City”) Roc (“New Place LeCount 33 FORMULA BETTER-CITIES.ORG - - - -
PAGE 7 BETTER CITIES PROJECT G 32 7,000 1,000 PROJECTS NEW AT APPROVED APARTMENTS BELOW-MARKET SO FAR RENTS
IMMEDIATE IMPACTS
As soon as the new zoning was 360 Huguenot to obtain a zoning bonus under the new overlay district formula. And at full assessment, the new passed and the GEIS was in place, 360 Huguenot will pay $31 million per year in property new projects were proposed faster taxes. than anyone expected. Altogether, the new projects will bring nearly 7,000 new apartments, including 1,000 at below-market rents, al- As of April 2021, 32 projects had been approved by the ready exceeding the 10-year market estimates contained Planning Board, of which 6 had already been completed, in the GEIS. and 10 were under construction (see Downtown Develop- ments Map). The increased economic activity from this population in the Downtown will support New Rochelle businesses for A typical project is 360 Huguenot Street, a 28-story mixed many years to come, just as the additional property taxes use tower at the former Loews Theater. It consists of 280 coming from the new buildings support city services. apartments, 17,285 square foot of retail space, and asso- And the community benefited from the many projects ciated parking. The development included the restoration that elected to provide one or more Community Benefits of the theater façade and set aside of 10,000 square feet for the zoning bonus. for use by the community for a black box theater. The lat- PAGE 8 PAGE ter two elements were community benefits that enabled It was a great result by any measure. BETTER-CITIES.ORG
THE CITY OF NEW ROCHELLE RECEIVED OVER $20 MILLION IN FEES, INCLUDING $10 MILLION OF BUILDING DEPARTMENT FEES, $4 MILLION OF MITIGATION FEES, AND $6 MILLION OF PLANNING BOARD AND OTHER FEES, MORE THAN ENOUGH TO COMPENSATE FOR THE EXTRA DEMAND ON CITY SERVICES. PAGE 9 PAGE BETTER CITIES PROJECT
LEARNING FROM NEW ROCHELLE
What was the secret to New Rochelle’s success? Is it a model that can be repeated elsewhere? New Rochelle had good fundamentals — proximity to to tailor an approach to their own circumstances and New York City, good public transit, Long Island Sound state laws. Here are the essential steps: shoreline, and the bones of a charming downtown. n Listen to both current residents and prospective Rents and prices were high, indicating strong demand. builders, What made the difference? Simplifying the approval n Look at the big picture — not just the merits and process. faults of an individual project The approvals process in many municipalities, espe- n Resolve the uncertainties up front so that develop- cially in the Northeast and the West Coast, involves ers know what they can build and what fees they’ll great uncertainty, as each project is considered indi- owe when they do so, and vidually, with the result that potential developers and investors are unable to predict what scale will be ulti- n Guarantee quick city decisions based on clear, mately approved, what it will cost, and even when they objective criteria will know the answers. In fact, right now it is hardest to There are a number of zoning reforms with similar am- build where housing is the most needed — in areas of bitions going on in municipalities across the country, high job growth and in-migration. and the example of New Rochelle is proof that if done PAGE 10 PAGE Cities that want to follow New Rochelle’s lead will need right, reform can work, and quickly. BETTER-CITIES.ORG
THE APPROVAL PROCESS IN MANY MUNICIPALITIES, ESPECIALLY IN THE NORTHEAST AND THE WEST COAST, INVOLVES GREAT UNCERTAINTY, AS EACH PROJECT IS CONSIDERED INDIVIDUALLY, WITH THE RESULT THAT POTENTIAL DEVELOPERS AND INVESTORS ARE UNABLE TO PREDICT WHAT SCALE WILL BE ULTIMATELY APPROVED, WHAT IT WILL COST, AND EVEN WHEN THEY WILL KNOW THE ANSWERS. PAGE 11 PAGE BETTER CITIES PROJECT ABOUT THE AUTHORS
PHILIP WHARTON, TWINING PROPERTIES [email protected] | (212) 704-2035
Phil Wharton is chief investment officer at Twining Properties. He was on the forefront of development and investment in Long Island city and downtown Brooklyn while at AvalonBay Communities, and he helped reshape the down- town of New Rochelle, New York through the innovative public/private partner- ship between RXR Realty and the City of New Rochelle.
Wharton built the residential development platform for RXR Realty, one of the largest owners, managers, and developers and operators in the NYC Tri-State area. At RXR, he oversaw the development of 1,792 apartments at a cost of $813 million. Prior to that role, he developed residential and mixed use developments at Brookfield Property Group and AvalonBay Communities, for a total of 3.5 mil- lion square feet and including 4,903 apartment homes, at a total cost of ap- proximately $2.4 billion. He serves on several boards, including the Council on Economic Education, which trains approximately 55,000 teachers annually, and ChaShaMa, which places artists’ studios and exhibits in vacant retail spaces. He holds an MBA from University of Pennsylvania’s Wharton School of Business and a BA from Harvard College.
SALIM FURTH, MERCATUS CENTER AT GEORGE MASON UNIVERSITY [email protected] | (703) 993-4930
Salim Furth is a Senior Research Fellow and Director of the Urbanity project at the Mercatus Center at George Mason University. His research focuses on housing production and land use regulation and has been published in Critical Housing Analysis and the IZA Journal of Labor Policy. He has testified before several state legislatures as well as the U.S. Senate and House of Representa- tives. He frequently advises local government officials on zoning reform and housing affordability.
Furth’s writing has appeared in National Affairs, American Affairs, The City, Pub- lic Discourse, and numerous newspapers. He previously worked at the Heritage Foundation and taught at Amherst College, and earned his Ph.D. in economics from the University of Rochester in 2011. PAGE 12 PAGE NEXT STEPS READY TO GET YOUR CITY BACK TO WORK? WE CAN HELP.
This case study isn’t the final word on reviv- ing American cities; it’s a starting point. And whether you have an office at city hall, a desk in a newsroom or a seat at the kitchen table as an informed citizen, BCP can help you explore these and other policy sugges- tions in depth.
SIGN UP AT BETTER-CITIES.ORG Our updates keep thousands of local elect- ed officials and engaged citizens informed about the latest ideas in municipal policy.
GET IN TOUCH BCP can help identify specific research and recommendations relevant to your city’s challenges, direct you to the right experts for answers and offer presentations related to these and other topics. Phone (702) 546-8736 Email [email protected] Web better-cities.org
4700 W. Rochelle Ave. Suite 141 Las Vegas, NV 89103