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New York City Measure Freezes Self-Storage Development Out of Industrial Business Zones

January 2, 2018

7 Min Read
New York City Measure Freezes Self-Storage Development Out of Industrial Business Zones

Update 1/2/18 – City council members voted overwhelmingly in favor of banning self-storage development within IBZs without a special-use permit last Tuesday, sending the measure to Mayor de Blasio for signature. The bill creates a two-year application process, which includes a uniform land-use review procedure. The special permit will cost about $2,000, according to the source.

In all, 48 of 51 council members voted in favor of the ban, with one councilor absent. Those voting against it were Robert Cornegy from Brooklyn, and Joe Borelli and Steven Matteo in Staten Island.

Typically, just two or three new self-storage facilities are developed within New York City’s IBZs each year, which prompted Queens Borough President Melinda Katz to wonder why a special-permit process was necessary, the source reported.

12/8/17 – A city-council committee approved the measure to ban new self-storage development from the city’s IBZs without a special-use permit yesterday, pushing it forward for a full council vote on Dec. 19. Obtaining the permit would require a nearly yearlong process of public review, culminating in a council vote for final approval, according to the source.

The change wouldn’t apply to two zones in the Bronx and two others in Staten Island. A portion of a zone in Jamaica, Queens, would also be excluded. In those cases, self-storage developers would still be required to reserve industrial square footage in their projects. For the IBZs that opted out of the bill, storage facilities up to 50,000 square feet will be allowed as-of-right, with buildings of larger size required to designate 25 percent of space for industrial use.

New York’s 21 IBZs account for about half of the city’s manufacturing space, the source reported. Though councilmember Ritchie Torres indicated he supported the effort to preserve the city’s manufacturing, he criticized the council for not studying whether restricting self-storage would result in more manufacturing jobs. “The text amendment before us should be seen for what it is: raw legislative power disconnected from fact-finding,” Torres told committee members.

Torres was the lone dissenting vote. Councilmember Daniel Garodnick described the bill as “odd” but voted in favor of pushing it forward. The majority of the city council appears to be in favor of the measure and is expected to pass it without issue this month.

5/30/17 – New York City officials formally submitted a land-use application last week that would progress Mayor de Blasio’s plan to ban self-storage from the city’s IBZs, unless developers obtain a special permit. The measure would require the permits in “certain parts of manufacturing districts in the outer boroughs,” according to the source. Though city planners considered allowing self-storage as part of mixed-use developments with a manufacturing component, the exception isn’t included in the zoning amendment.

Those fighting the city’s stance on self-storage may push to include the mixed-use provision when the amendment comes up for public review. “They’re now looking at how to create mixed-use developments that would include self-storage and manufacturing space,” Woloz told the source.

City planners have acknowledged that curtailing self-storage development in a city that’s considered undersupplied for consumer demand would lead to increased rental rates and impact self-storage use in IBZs, Woloz said.

Though the city council earlier indicated it would support the zoning change, the eight-member council delegation representing the Bronx submitted a letter asking officials to halt proceedings.

“To be clear, the Bronx delegation is hardly a monolith on the subject of self-storage,” the members wrote. “Some members of the delegation see self-storage as affordable warehousing for individuals and small businesses of minimal means. Others see it as a blight on waterfront properties and a competitor with manufacturing. Even though our views might vary from member to member, the delegation stands united in calling for a new beginning.”

The New York Self Storage Association, along with the chambers of commerce in the Bronx, Brooklyn and Queens, has also voiced its opposition to the mayor’s proposal in recent months, the source reported.

1/17/17 – Mayor de Blasio’s controversial proposal to ban self-storage from New York City’s IBZs, unless they obtain a special permit, could be in for a legal battle from storage operators and developers. SNL Development Group LLC, a Bronx, N.Y.-based company that has built storage facilities for CubeSmart and other operators, has retained lobbying firm Connelly McLaughlin & Woloz (CMW) to challenge the measure, according to the source.

“We haven’t really seen any evidence that banning industries—banning self-storage—is going to bring manufacturing back,” Michael Woloz, a partner at CMW, told the source. “The city should not be engaging in policies that ban whole industries from growing and providing a service—a valuable service—that businesses and residents need.”

The city council has indicated it will approve the new zoning regulations once it receives them from the planning department, the source reported.

11/5/15 – New York City Mayor Bill de Blasio unveiled a 10-point Industrial Action Plan this week designed to preserve the city’s 20 industrial business zones (IBZs) for heavy manufacturing. The plan, part of which requires approval from the city council, includes a component that would end “as-of-right” hotel and self-storage development in IBZs. Instead, hotel and self-storage would require a special permit with council approval in those areas, according to a source.

“The administration will work with the city council to create a new special permit that will be required for any hotel developments in M1 districts within IBZs (with the exception of a portion of the area around JFK, where hotels serve airport-related businesses),” the mayor’s office said in a press release. “Additionally, it will implement restrictions on personal mini-storage and household-goods storage facilities in IBZs through appropriate land-use controls. Such storage facilities do not create a high number of jobs and thus do not align with the mayor and council’s vision for economic development in core industrial areas.”

The plan would also protect IBZs from residential development while investing $442 million over 10 years in city-owned industrial properties such as the Brooklyn Navy Yard ($140 million) and Hunts Point ($150 million) in the Bronx. Protection for land zoned for a mix of light-industrial and residential uses will be proposed after an ongoing study is concluded.

“This framework will help determine the best ways to bring a mix of light-industrial, commercial and limited residential development to appropriate locations in a way that supports 21st century businesses and 21st century jobs,” the mayor’s office said. “The city will begin developing the framework for these re-imagined mixed-use districts with the North Brooklyn IBZ study currently underway. Developments would be facilitated through incentives and/or zoning requirements that encourage a mix of uses, with specific requirements assessed on a neighborhood-by-neighborhood basis.”

Some business and community leaders have lobbied for similar proposals because they believe an influx of hotel, residential and self-storage developments in industrial zones have driven up rents and property values, effectively freezing manufacturers from developing in areas specifically zoned for them. An unidentified company executive told “The Brooklyn Paper” his business recently lost out on a property because it was outbid by a self-storage company.

The mayor’s plan would also establish a $150 million loan and grant fund for new or expanding industrial businesses. “The new and current investments will generate more than 20,000 new jobs and support the city’s existing 530,000 manufacturing and industrial jobs,” the release stated.

The proposal was developed in cooperation with city council leaders as well as input from manufacturers.

Crain’s, Council Panel Votes to Limit Self-Storage in Industrial Zones
Crain’s, Mayor Finally Unveils Plan to Protect Industrial Businesses, Which Calls for Freezing Out Hotels and Self-Storage
New York City, Mayor de Blasio and Speaker Mark-Viverito Unveil Action Plan to Grow 21st Century Industrial and Manufacturing Jobs in NYC
Queens Chronicle, Council Votes to Curb Self-Storage in IBZs
The Brooklyn Paper, DeBlasio: Hotels Are Killing Industrial Jobs — and My New Rules Will Bring Them Back
The Real Deal, 18 Months Later, de Blasio Gets Moving on Plan to Curb Self-Storage
The Real Deal, Self-Storage Refuses to Be Boxed Out of Manufacturing Zones

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