Comptroller’s audit finds that the City has fallen substantially short in its duty of overseeing Privately Owned Public Space agreements, including agreements with Trump Tower, Trump International Hotel, and Trump Plaza. On April 18, 2017, the Office of the City Comptroller Scott Stringer released a report of an audit of how adequately the City oversees Privately Owned Public Space agreements with developers and building owners. Privately Owned Public Space agreements are created by developers in exchange for the City allowing the developer to construct taller and denser buildings than would otherwise be allowed by zoning regulations. The agreements create outdoor or indoor spaces that are required to be open for public use and maintained by the developers and owners of private buildings. Currently there are 333 Privately Owned Public Spaces in New York City, totaling 23 million square feet of additional floor area allowed in exchange for the space. To read a previously published CityLand Commentary on Privately Owned Public Spaces, click here.
Two agencies are charged with overseeing compliance with Privately Owned Public Space agreements. The Department of Buildings is responsible for enforcing the Building Code and the Zoning Resolution, and issues violation notices to owners who are out of compliance. The violations carry $4,000 penalties, which can be increased to $10,000 if an owner defaults on the notice of violation. The Department of City Planning is responsible for overseeing land use in the City, and certifies Privately Owned Public Spaces’ compliance with zoning regulations prior to a developer receiving a foundation permit and conducts periodic reviews of Privately Owned Public Spaces created after 2007.
For the audit, the Comptroller’s Office inspected all 333 Privately Owned Public Spaces in the City. From that inspection, the Comptroller determined that 182 of the sites failed to provide the required public amenities. In some sites the amenities were non-functioning, while in others they did not exist.
In the final report, the Comptroller’s Office found that 275 of the 333 Privately Owned Public Spaces had not been inspected by the DOB for at least four years. Of the 58 that had been inspected, 18 violations had been issued to ten of the sites. When inspected by the Comptroller’s Office, however, 41 of the 58 sites were found to be non-compliant with their agreements for one or more reasons. The report noted that auditors found at multiple sites, among other thing, that public access was restricted by a fence or barricade, that signage indicated the spaces were “For Private Use Only,” that the spaces lacked required amenities, and that restaurants occupy portions of the spaces with tables and chairs for their private patrons.
The most egregious observation made by the report was of the Privately Owned Public Space that was supposed to be located at 410 East 58th Street. At that location an open 15,226-square-foot public plaza was supposed to exist for public use. The Comptroller found, however, that the site was occupied by a hotel lobby. In response to the Comptroller’s inquiry into whether the lobby structure had received a building permit, the DOB stated that it was investigating the matter.
The Comptroller’s Office made eleven recommendations. These recommendations included the creation of a database of all Privately Owned Public Spaces that could be accessed by trained DOB inspectors. The Comptroller also recommended a policy change to ensure that sites are inspected regularly, and especially during warmer months when certain types of non-compliance behavior would more likely occur. Additionally, the Comptroller noted that the DOB should refer the destruction of the Privately Owned Public Space at 510 East 58th Street to the Law Department.
In response to the recommendations, the DOB stated that it was in the process of creating a database. The DOB disagreed with the recommendation to change inspection policies, noting that “guidelines for inspections are consistent Citywide, and apply to all inspectorial units.” The report stated in response that the “DOB’s refusal to change its policies and procedures will increase the likelihood that the public will continue to be deprived of full access to POPS locations.” The Comptroller urged the DOB to reconsider its position.
“Audit Report on the City’s Oversight over Privately Owned Public Spaces,” SR16-102A, NYC Comptroller Scott Stringer (April 18, 2017).
By: Jonathon Sizemore (Jonathon is the CityLaw Fellow and a New York Law School Graduate, Class of 2016).