Testimony from Richard Barth on NYC’s Hotel Special Permit Proposal

The de Blasio administration recently announced a proposal that would require special permits for all new hotel projects, ultimately curtailing most hotel development across the city. While hotels are allowed to be built as of right in most commercial districts across the city, the new rule will require every new project to traverse the public review process and obtain approval from the labor-friendly City Council — making it the only major type of development to undergo this level of scrutiny.

Urban planning groups like The Regional Plan Association and Citizens Housing and Planning Council, as well as former staffers from the city’s Department of City Planning, testified against the proposal in a City Council Scoping Meeting on January 22.

Below is the testimony from Capalino Group Leader Richard Barth, the former Executive Director of the Department of City Planning:

Good afternoon. My name is Richard Barth, head of the land use group at Capalino. I am testifying as a former Executive Director of the Department of City Planning for 12 years, and Manhattan Planning Director for eight.

I appreciate the opportunity to comment on the draft EIS scope on the text amendment, which will eliminate all as-of-right hotels in the City.  As projected by City Planning, this could result in a shortfall of over 60,000 hotel rooms in the City by 2035. 

Throughout my career at City Planning, I have been involved in zoning amendments affecting all areas of the City.  These amendments have had a defensible land use rationale and sought to address defined issues or advance specific policy objectives.  This proposal as currently described fails on all counts.

While the previous M1 hotel special permit amendment had a clear land use rationale, part of its justification was that future hotel demand could be accommodated elsewhere in the city.  This current proposal would invalidate that conclusion. The resulting land use implications must be analyzed, as well as conflicts with city and state economic policies.

The magnitude of the projected shortfall in hotel rooms is immense, and the impacts on the hospitality sector will no doubt be severe, and not limited to the loss of jobs, tax revenues,  and increased room prices. The DEIS must also look at the impacts across the spectrum of the hotel submarkets identified in the Draft Scope, and the potential to foreclose future flexibility in these markets to meet changing needs and demands. This will have a direct impact on the City’s tourism industry, economic recovery and long-term growth in every corner of the City.

The DEIS must also look closely at the impacts on industry sectors that are closely linked to the hospitality sector, including tourism, retail and services, food sector, restaurants, and cultural and other institutions.  The interdependence of these sectors and uses cannot be underestimated, and it will also be important to analyze the impacts on the health and vitality of business districts and neighborhoods in all five boroughs, including lost jobs for countless New Yorkers.    

The analysis must acknowledge that few if any owners and developers are likely to pursue a special permit through the City’s land use review process.  Based on my experience, in all likelihood, the proposal will preclude most hotel projects due to cost, time, and uncertainty of outcome in the process, and it is likely to arrest the development of virtually all small and moderate hotels, mixed-use projects containing hotels, conversions of obsolete buildings to hotel use, as well as new hotel products geared to the changing needs of travelers and business. Few new hotel rooms would be built and future demand for tourist, business and other accommodations would not be satisfied.

If this project moves forward, there will be an urgent need to develop strategies that can ameliorate at least some of the potential impacts, including geographic exclusions and more liberal vesting and grandfathering provisions for new construction and conversions. However, in the long term, the health of the city’s business districts, tourism, hospitality and related industries is likely to be compromised and the consequences of moving forward therefore need to be carefully evaluated and carefully considered.

Thank you.

Capalino has been closely following this text amendment and are prepared to examine how it could affect your hotel project, your business plans, and potential solutions to limit its impact. Please contact Group Leader Richard Barth at richard@nullcapalino.com for further information.