A Tidy $10-Million Gift for a Developer

By Sydney H. Schanberg

New York Newsday, July 7, 1986

This is one of those who-are-we-kidding stories that have become so common in the Koch era of selling the city, piece by piece, to real estate developers.

A lot of the developers are presumably nice guys, and they are to be valued for their job-creating, risk-taking entrepreneurial skills, but they must be laughing up their monogrammed sleeves at the way the city keeps giving them goodies when it doesn’t have to.

The latest saga is about a fellow named Ian Bruce Eichner and a high rise he is about to erect on Broadway between 86th and 87th Streets. It’s going to be a 21-story, 355-apartment luxury condominium with a health club, swimming pool and two squash courts, plus a terrace, garden and solarium on the roof.

The City Planning Commission decided that Eichner’s building was such a nice place that it granted him a bonus of 20 percent more floor space than he would have been able to construct under the regular zoning rules. This works out to a bonus of 60,000 square feet, which at the going rate sells for about $20 million when you market it as living space for the affluent.

The $20-million handout was approved under a zoning device known as the Housing Quality Program that says you can get the extra square footage if you provide the tenants with such special niceties as concierge service and give the neighboring community some amenities as well. This program is so demonstrably flawed that its authors, the planning commission, are in the process of phasing it out, but apparently wanted to get in one more giveaway before it expired.

Last Friday, the Board of Estimate, as final arbiter, approved the gift to Eichner by a vote of 6-5. Among those voting yes were Mayor Edward Koch and City Council President Andrew Stein. Leading the opposition in a losing cause was David Dinkins, the Manhattan borough president.

The yes voters will tell you it’s all a coincidence — and not an exchange of Christmas presents — but Eichner has given some of them gifts of his own. Last year, after Eichner was awarded the same 20 percent space bonus on another of his luxury buildings — the 72-story tower going up on West 56th Street behind the City Center theater — he and a partner donated $10,000 to the mayor’s campaign fund. His attorney, Howard Hornstein, gave even more — $10,000 to Koch and $12,500 to Stein.

Prior to this, Messrs. Eichner and Hornstein had given only small amounts to members of the Board of Estimate — not enough to do more than merely introduce themselves. This campaign-gift information was compiled last year by Manhattan Assemb. Franz Leichter, who has been saying for some time that it’s not nice to sell off pieces of the city like so many rugs in a bazaar.

Leichter also pointed out in his report that Hornstein was, until two years ago, a member of the very planning commission that designed the bazaar. Sometimes it’s hard to tell who’s on which side.

One member of the present planning commission, R. Susan Motley, dissented in frank language from the decision to give Eichner his gift. She said: “The Upper West Side has experienced a luxury residential development boom in the past five years. Luxury residential does not require a 20 percent density bonus in order to produce high quality, well designed buildings in this neighborhood.

“Finally, if incentives are to be used to encourage development, it is my strong belief that an eligible activity ought to be the provision of housing affordable to the 70 percent of New York City residents who earn less than $25,000 per year.

You must forgive Motley her impudence in bringing up the real issue. How can this city keep subsidizing housing for the rich when it builds no apartments for the working class and the poor?

The community board in the area opposed the Eichner building as too large for the neighborhood service structure. But the players of the big real estate game overrode the community once again. They said Eichner has provided enough neighborhood amenities to qualify for the bonus.

Eichner’s idea of neighborhood amenities at the start consisted of some street trees, some benches and some street paving. Since this was ridiculous even to his benefactors, he said he would also create, inside his building, a new subway entrance to the southbound platform of the 86th Street IRT station. The entrance, however, will be open only eight hours a day.

This was still so obvious an affront to common sense that in the final bargaining with the naysayers on the Board of Estimate, primarily Dinkins, he came up with a fund of $600,000 to go for renovating rooms in single-room occupancy hotels for low-income people.

So the final tally goes like this: Eichner gets a building expansion worth $20 million. He spends at most $9 million or $10 million to pay for constructing his bonus 60,000 square feet and for all the neighborhood amenities. Profit: A maximum of $10 million on the gift alone, above and beyond his normal profit on the building. Who are we kidding?

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