NYC zoning loophole challenged in case that would require removing top 20 floors of tower | Dump Trucks Charlotte NC

The city's Department of Buildings (DOB) and Board of Standards and Appeals were named as co-defendants in the original July 2019 lawsuit​, along with Amsterdam Avenue Redevelopment Associates. 

The DOB on March 2 also issued a clarification of its zoning rules, preventing owners from using partial tax lots when forming a new zoning lot, which is what developers allegedly did in this case to exceed height per lot limitations. The new policy went into effect immediately but does not apply to projects that received their zoning approvals and building permits prior to March 2, including 200 Amsterdam.

A New York City spokesperson said that the city is appealing the court's ruling because the permit was issued in accordance with the law and that it is up to the city to amend flawed city policies, not the court's.​

The community groups that brought the original lawsuit maintain that buildings as tall as 200 Amsterdam deviate from what is acceptable for the neighborhood and that the building department misinterpreted city regulations in issuing the permit. 

The policy that allowed the developer, a joint venture between SJP Properties and Mitsui Fudosan America, to cobble together several tax lots, some full and some partial, is based on a 1978 memo from the DOB's Acting Commissioner Irving E. Minkin to the department's borough superintendents. 

New York City zoning regulations, said attorney William Walzer, partner at law firm Davidoff Hutcher & Citron in New York City, caps the height and square feet of new construction per tax lot. Tax lots can be combined, however, to create a new zoning lot.

For example, Walzer said, a building owner with a four-story structure on one tax lot where there is a maximum height allowance of eight stories can sell the right to develop the extra four stories to an adjacent property owner. If the second property owner also has an eight-story maximum, then that owner is allowed to build up to 12 stories. With enough separate tax lots thrown into the mix, the owner that is accumulating development rights could be allowed to build much higher than what a single tax lot allows. 

The issue in the 200 Amsterdam case, he said, was whether partial tax lots should have been used to come up with a new size cap, despite what the Minkin memo said was allowable. 

While Walzer is not involved in the 200 Amsterdam case and could not speak to the specifics, he said that all indications are that its developers followed DOB policy and zoning regulations in securing the permit. The developers, he said, didn't have to obtain discretionary approvals as part of its building permit application, and they didn't ask for any variances. "They had precedent for it," he said. 

And even if the appeals court decision comes down in favor of the community groups that want to see the 200 Amsterdam property shortened by 20 floors, he said, there's always the possibility that that particular remedy could be deemed too excessive. "That will definitely be part of the discussion," Walzer said.

If developers are forced to dismantle the high-rise, in addition to the dangers of executing such an operation in an urban setting, they could face serious financial repurcussions. Their loan requires the project to comply with local building codes and regulations, but it also is based on a specific loan-to-value ratio. Demolishing the pricey upper-floor units could reduce the building's sellout value, threatening to put the loan into default. ​