Nine-story, partially constructed hotel grandfathered

Developer had not completed hotel when City Council approved rezoning in Dutch Kills. In December 2007, Buildings issued Dutch Kills Partners LLC a permit to build a nine-story, 57-room hotel at 39-35 27th Street in the Dutch Kills section of Queens. The proposed hotel complied with the zoning requirements at the time. In October 2008, the City Council approved the Dutch Kills Rezoning, changing the site’s M1-3D zoning to M1-2/R5B, and putting the proposed 24,713 sq.ft. building nearly 14,000 sq.ft. over the maximum permitted floor area. Since Dutch Kills Partners had not completed the project’s foundation at the time of the rezoning, the permit lapsed and Buildings issued a stop-work order.

Dutch Kills Partners sought approval from BSA to finish the hotel’s construction. The developer claimed that it had completed 75 percent of the excavation and 24 percent of the foundation. It also claimed to have spent more than $800,000 of the project’s $3.8 million total budget on hard and soft costs and irrevocable contracts. Dutch Kills Partners argued that it would need to eliminate 35 hotel rooms if required to construct a complying hotel, which would result in a loss of $2 million. According to Dutch Kills Partners, a complying residential building would result in a loss of more than $1.5 million.

Local City Council Member Jimmy Van Bramer, Queens Community Board 1, and a group of neighbors opposed the application. The neighbors claimed that the foundation work only amounted to three percent of the work necessary to complete the entire project and should not qualify as substantial construction. The neighbors also claimed that architectural and contractor fees should be discounted from the claimed expenditures because Dutch Kills Partners paid the fees before obtaining the permit.

BSA disagreed with the opposition and granted Dutch Kills Partners an extension to complete the hotel. While the work completed may have amounted to only three percent of the entire project, BSA concluded that Dutch Kills Partners had performed a significant amount of work prior to the rezoning. BSA said it was appropriate to consider the amount of foundation work, pointing out that Buildings would have permitted Dutch Kills Partners to complete the hotel if it had only completed the foundation before the rezoning. BSA found that the pre-permit fees paid by Dutch Kills Partners were in anticipation of the proposed hotel and were therefore made in reliance on the subsequently issued permit.

BSA: 39-35 27th Street, Queens (300-08- A) (May 25, 2010) (Blank Rome LLP, for Dutch Kills Partners). CITYADMIN

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