As part of Mayor Bloomberg’s South Bronx Initiative, the Lower Grand Concourse was partially rezoned to allow mixed-use development in the hopes of attracting private investment and affordable housing. The rezoning was adopted on June 30, 2009.
Stretching from the Harlem River north to East 149th Street and east to Morris Avenue, the 30-block area was zoned for manufacturing and was primarily home to self-storage, distribution warehouses, and light industry like auto businesses. Industrial activity in the area has been declining since the 1970s and more than 20% of plots are currently vacant.
According to the Department of City Planning (DCP), only three new buildings have been constructed since 1980, and jobs have decreased by 30% since 1992. The area has been isolated from its waterfront largely because of the Oak Point Rail Link, which was constructed in 1992 along the Harlem River banks to divert freight traffic away from busy commuter lines.
Corridors stretching along the rail tracks and Major Deegan Expressway are still zoned for manufacturing uses. The South Bronx Overall Economic Development Corporation (SoBro) supported the rezoning plan, noting that the partial zoning is critical to saving important community jobs.
The rezoning of the rest of the Lower Grand Concourse is expected to spur residential and commercial development, with the City anticipating 841,000 square feet of new commercial space and 3,400 residential units, including 600 units of affordable housing. The rezoning also includes the removal of restrictions on grocery store square footage in order to encourage grocery stores of all sizes to locate in the neighborhood.
Bronx Borough President, Adolfo Carrión, expressed concerns about the effect of rezoning on businesses east of Grand Concourse from East 144th Street to E 139th Street, noting that rezoning this swath of land threatened 230 jobs. Accordingly, he conditionally approved the project during the ULURP process.
The Lower Grand Concourse area is adjacent to, and inclusive of, other recent efforts by the City to revitalize the area, which is part of the poorest Congressional District in the country.
A new 9-acre waterfront park that is being built along the Harlem River on the northern end of the Lower Concourse area is already under construction. This park is part of a larger proposal to create a special Waterfront District, with restrictions on building size and use, and a Waterfront Access Plan to foster pedestrian and visual corridors within the surrounding neighborhood and from adjacent neighborhoods.
Also under construction, just north of 149th Street is the Gateway Center shopping development, which will add 1 million square feet of retail space. All of these revitalization efforts are intended to remake the southwestern corner of the Bronx into a lively gateway for the borough.
The Inclusionary Zoning provisions were extended to the whole rezoned area, to encourage developers to include affordable units in new residential construction or existing residential renovation.
The Inclusionary Housing zoning tool provides an incentive for developers to reserve a fifth of units for low-income buyers at below-market rates, by allowing developers to build 33% more than the base allowable floor area ratio (FAR) only if permanently affordable units are provided on-site, or off-site.
If the affordable units are provided off-site, they must be located either in the same community district (Bronx Community District 1), or within a half-mile radius in a neighboring community district.
The current economic downturn may threaten the revitalization goals of the Lower Concourse rezoning. In an interview with The Real Deal, veteran affordable housing developer Les Bluestone calls existing economic, credit, and real estate conditions “the perfect storm” to threaten the South Bronx. In recent years, properties in the Lower Concourse had begun to sell at a more rapid pace, probably due to speculation about the imminent rezoning.
However, credit has dried up for investors and speculators, and the real estate industry increasingly views warehouse redevelopment and retail as risky. Investors are less willing to speculate that the proposed rezoning will be officially approved, a prospect that appears to some as increasingly dim with the faltering economy and the possible end of Mayor Bloomberg’s tenure.
Also, according to Les Bluestone, building owners may be increasingly reluctant to sell, since their buildings have been depreciating and capital gains taxes from sales would be extremely high – possibly unaffordable, given the current economic climate.