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Land Use, Housing & Zoning

BSA Cal. No. 2020-46-A, application by owner/developer of 12-14 East 48th Street for a variance from the Board of Standards and Appeals for a hotel project

At the regularly scheduled monthly Community Board Five meeting on Thursday, July 09, 2020, the following resolution passed with a vote of 43 in favor; 0 opposed; 1 abstaining:

WHEREAS, The applicant, 1248 Associates LLC – an affiliate of Hidrock Properties, is the owner and developer of 12-14 East 48th Street, located between Madison and 5th Avenues, and is requesting a four-year extension of construction time from the Board of Standards and Appeals; and

WHEREAS, The applicant is in contract with Hilton Resorts Corporation to build a 32-story, 161-key hotel and timeshare with ground floor retail at 12-14 East 48th Street; and

WHEREAS, 12-14 East 48th Street is a through-block lot with 50 feet frontage on East 48th Street and 25 feet frontage on East 47th Street and is located within the East Midtown Special Subdistrict, where new hotel development is only allowed by City Planning Commission special permit; and

WHEREAS, DOB granted construction permits for the redevelopment of a hotel at 12-14 East 48th Street on January 20, 2017, then a conforming use; and

WHEREAS, The East Midtown Special Subdistrict zoning text allows those hotel projects that started work before the Special Subdistrict’s enactment on August 9, 2017 to continue construction for two and a half years and allows the Board of Standards and Appeals to extend construction time up to either one additional year or January 31, 2021, whichever is sooner; and

WHEREAS, Community Board Five and the BSA both approved of a one-year extension in construction time for the project in November and December 2019, respectively, because the applicant met the three findings outlined in the East Midtown Subdistrict zoning text:

  1.       Construction delays were caused by hardship or uncontrollable circumstances
  2.       Project changes would prevent the substantial financial recovery of investment
  3.       No public safety issues have arisen to necessitate special permit enforcement; and

WHEREAS, After the BSA granted the one-year extension, major construction delays were caused by

  1.       The discovery in January 2020 of subcontractor improperly installing the windows causing many to fail a water-pressure test which necessitated the replacement and installation of new windows; and
  2.       Governor Cuomo’s March 27, 2020 Covid-19 PAUSE work stop order; and 

WHEREAS, The applicant now believes the project will not be completed by the January 31, 2021 deadline of the previously granted one-year extension and is asking the BSA for an additional four-year extension on construction time to complete the project; and

WHEREAS, The applicant is applying for a four-year extension under the practice of Common Law Vesting Findings that has three parts:

  1.       The Owner has substantially completed construction of the project
  2.       The Owner has made substantial financial expenditures
  3.       The Owner will sustain substantial financial loss if the extension is not granted; and

WHEREAS, The applicant has stated that 82.5% of construction days has been completed; and

WHEREAS, The applicant has stated that 92% of the financial expenditures has been laid out; and

WHEREAS, The applicant has been in contract with Hilton Resorts since the project’s inception and worked with a hotel architect, as the building is designed for hotel use, and if a completed hotel is not delivered to Hilton Resorts, the applicant states that they will owe $18 million to Hilton and $90 million in loans that Hilton will no longer take over; and

WHEREAS, The applicant explained in multiple ways that if they were to now change the use of the building to a different use – such as office or residential – there would be extensive additional expenses to make the building commercially viable and compliant with the zoning text for those uses; and

WHEREAS, Community Board Five has not found any public health, community safety, or welfare issues that have come about due to this project; and

WHEREAS, The applicant has shown it can still meet every other finding of the East Midtown Subdistrict Hotel Special Permit findings, with the exception of the January 31, 2021 deadline, and also meet the findings of the Common Law Vesting test; and

WHEREAS, The applicant believes if work will begin again on the construction site by mid-July and is allowed to continue without any slow-downs or stoppages due to Covid-19, the applicant estimates construction should be completed by the end of March 2021; and

WHEREAS, Community Board Five acknowledges that Covid-19 pandemic has caused major unpredictabilities in supply chains and workflow; and

WHEREAS, The applicant states that a four-year extension is a common variance granted by BSA under Common Law Vesting; and

WHEREAS, Community Board Five believes it is excessive for a four-year extension for a construction site in our district in the context of the amount of work that has yet to be completed on this project; therefore, be it

RESOLVED, Community Board Five recommends approval of the application by the owner and developer of 12-14 East 48th Street for an extension of two and a half years of additional construction time.

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