NEW YORK | Why there are no skyscrapers in the middle of Manhattan

[NYguy]

We've talked about this many times...

http://www.observer.com/2012/01/unca...-of-manhattan/

Uncanny Valley: The Real Reason There Are No Skyscrapers in the Middle of Manhattan




By Matt Chaban 1/17/12

Among the reasons New York has the finest skyline in the world—consider that a statement of fact, not opinion—is not simply the skyscrapers bounding up the island of Manhattan but also their unusual arrangement. Like a great mountain range, the city is arrayed around the twin peaks of Downtown and Midtown. It has long been believed that New Yorkers could thank God for their unusual agglomeration of buildings. It turns out that Manhattan has a bedrock unusually suited to the construction of very tall buildings, in many cases just a few meters below the surface. But that solid land drops away in the gooey middle of the island, long limiting the heights of buildings in the city.

Or so the aphocraphists have been passing down for decades, at least since noted geologist Christopher J. Schuberth released his seminal The Geology of New York City and Environs in 1968. Therein, he posited his belief in a correlation between bedrock and big buildings, and like the Empire State Building, it has stood the test of time. But like a bad retaining wall, it all came tumbling down last month.

“Everybody is looking at this backwards,” Jason Barr, an economics professor at Rutgers, told The Observer in a phone interview. “It’s not an issue of supply, of where you can build. It’s an issue of demand, or where you want to build.”

Mr. Barr, along with two colleagues from Fordham, published a study in December issue of The Journal of Economic History debunking what he calls the Manhattan bedrock myth. Using 173 random core samples from the Battery to Central Park South, Mr. Barr, Troy Tassier and Rossen Trendafilov were able to show that there was no correlation between the depth of bedrock and the likelihood of a skyscrapers construction—in the case of their study, a building at or above 18 stories, which was tall for the time when the city’s two business districts developed between 1890 and 1915.

What the economists found was that some of the tallest buildings of their day were built around City Hall, where the bedrock reaches its deepest point in the city, about 45 meters down, between there and Canal Street, at which point the bedrock begins to rise again toward the middle of the island. Indeed, Joseph Pullitzer built his record-setting New York World Building, a 349-foot colossus, at 99 Park Row, near the nadir, as did Frank Woolworth a decade later. By studying historical construction data, the researchers were also able to determine that at the extreme, the most a deep bedrock could add to the costs of a building is about 7 percent, and therefore negligible when it comes to the economics of construction. “Compared to the cost of land in Manhattan, that amount is miniscule,” Mr. Barr said....

[ChiSoxRox]

So it looks like the bedrock idea holds true for Midtown, and Lower Manhattan is an exception since the tip of the island is just too small to contain the skyscraper cluster, and the "spillover" toward the Brooklyn Bridge and civic center was on land too valuable to not build skyscrapers due to proximity to Lower Manhattan.

the finest skyline in the world—consider that a statement of fact, not opinion—

Ah, New Yorkers.

[jd3189]

Interesting. Guess if this wasn't the case,we would be seeing a much larger concentration of highrises. Would of been even overwhelming.

[10023]

And now it's because the "valley" between Downtown and Midtown contains some very historic (and very expensive) neighborhoods, so there will probably never be much skyscraper development between Canal and 23rd Street. A handful here and there on the fringes, like Trump Soho, but not much.

[uaarkson]

Not to mention that area of Manhattan is now the largest and most powerful NIMBY fortress in the world.

[mhays]

Developable sites should be dramatically cheaper in the "valley" than in the current highrise districts. Demolition would also be cheaper, typically, for smaller buildings. That's not an issue at all.

I don't see bedrock as an issue either. Many cities, like mine, don't have convenient bedrock. Assuming the overlying soil isn't that bad, you can build with zero bedrock. At worst, in the "valley" you're putting piles down 40 meters, which is mostly just a cost issue.

Sounds like this is politics only, with some economic aspects.

[Crawford]

There actually are many skyscrapers between the two districts, but the main reason that there aren't many more is because of zoning.

Most of these neighborhoods simply don't allow massive towers.

Commercial (office) rents in these neighborhoods tend to be significantly higher than in Lower Manhattan and often even top Midtown. It's just tough to build in many sections.

[Crawford]

Originally Posted by mhays

Developable sites should be dramatically cheaper in the "valley" than in the current highrise districts.

They're actually dramatically more expensive, on a developable square foot basis.

Raw land in, say, SoHo, is much more expensive than raw land around Wall Street (again, on a per-square-foot basis).

For example, there's a new midrise office tower going up on Astor Place in the Village. Rents are north of $100 psf, which is only topped by the best buildings in Midtown.

[mhays]

Of course not. It's based on today's version of "developable" rather than a new version with taller heights, larger FAR, etc. It's also offset by land being a larger component of the overall value.

Rezone a large area and the market should be flush with available sites. Prices would probably stay well below Midtown for similar development potential on a raw land basis. Add the lower value of improvements and the total property cost should be much lower. Not to mention the lower demo costs as I already noted.

[ChiSoxRox]

Another possible reason for the huge clump being in Midtown is perhaps infrastructure: Penn and Grand Central are both in that area, quickly delivering enormous amounts of workers that would be much harder to transport quickly to Lower Manhattan. Then, when Rockefeller Center came in the early 1930s, you had a standard set for huge block complexes up there, with both much more room than the pinched tip of Manhattan and pre-existing towers setting the mindset for the boom of the 1960s and 70s. The way I see it, the art deco towers around Lexington and Rockefeller Center were "seeds" for that skyscraper boom that Midtown didn't have.

[Crawford]

Originally Posted by mhays

Prices would probably stay well below Midtown for similar development potential on a raw land basis.

Again, the land isn't cheaper. On a per-square-foot basis, it's some of the most expensive land anywhere.

The relative sale ranges may be smaller, simply because there are fewer sites where you can build a giant tower. But an apples-to-apples comparison will show that prices psf are the same or higher in what the real estate brokerages call Midtown South (basically everything from 30th Street to Canal).

[mhays]

Are you saying that a 20,000 sf site zoned for 200,000 sf in Midtown South is typically worth more than a 20,000 sf site in Midtown zoned for 800,000 sf? I find that very hard to believe.

[Crawford]

Originally Posted by Dralcoffin

Another possible reason for the huge clump being in Midtown is perhaps infrastructure: Penn and Grand Central are both in that area, quickly delivering enormous amounts of workers that would be much harder to transport quickly to Lower Manhattan.

This is true. The establishment of GCT, Penn, and the PABT helped build Midtown, and led to Midtown eclipsing Lower Manhattan following WWII, especially as the population spread out into the commuter belt.

And, more recently, the rise of Brooklyn and its appeal to the tech and creative sectors have led to lower vacancy rates in Midtown South than in Midtown.

In both instances, the office space valuation is predicated on its convenience to the targeted workers.

[Crawford]

Originally Posted by mhays

Are you saying that a 20,000 sf site zoned for 200,000 sf in Midtown South is typically worth more than a 20,000 sf site in Midtown zoned for 800,000 sf?

No, of course not. I'm comparing on a psf basis.

This is a relatively recent development, but if you look at sales comps, a random former garment factory building in the Flatiron district (obviously since converted) will trade for more than conventional space in Midtown.

Firms used to move to areas like Union Square and the Flatiron to save money. Now, this is the tightest market in the country, with much lower vacancies than even Midtown.

It used to be mostly creative firms, but now there are tons of financial firms and the like.

[mhays]

So land is in fact cheaper in the "valley." Hence one of my original points.

If rents are also higher, that might help too, though the factors that make them higher might not be reproducable in a big tower.

[ardecila]

Originally Posted by Crawford

This is true. The establishment of GCT, Penn, and the PABT helped build Midtown, and led to Midtown eclipsing Lower Manhattan following WWII, especially as the population spread out into the commuter belt.

And, more recently, the rise of Brooklyn and its appeal to the tech and creative sectors have led to lower vacancy rates in Midtown South than in Midtown.

In both instances, the office space valuation is predicated on its convenience to the targeted workers.

Yeah, this is my view as well. The area around City Hall developed because it was at the foot of the Brooklyn Bridge. It was the most heavily-trafficked part of the island for several decades, until the population began to disperse and the suburban links of Penn and GCT became important. Obviously the subway system was also built around the idea of twin hubs, with the highest degree of interconnectivity occurring in Downtown and Midtown but not in the area between Canal and 34th.

Your comment about Midtown South is interesting. Amazing how firms will relocate to save their employees from having to travel three extra stops on the subway.

[ardecila]

Originally Posted by mhays

So land is in fact cheaper in the "valley." Hence one of my original points.

Only because the zoning allows for less FAR. The land has less value for the developer to extract, so he's not willing to pay as much - but that's purely because of the zoning, not because there is less demand.

If you upzoned this area, you'd see the land values skyrocket beyond those of Midtown on a per-acre basis. In the long run, I suspect they'd decline again because the new construction would shatter the character of the neighborhood and because much of the demand would be sated.

The reason this area is so desirable is because it is the anti-Midtown. It has the same efficient grid of streets but the building scale is much more human, there's a lot more prewar, desirable building stock, and the streets are less crowded due to the reduced density. Since zoning prevents the area from adding much in the way of square footage, values per-square-foot are astronomical. That's why Jamestown is spending hundreds of millions to cantilever a building over the Chelsea Market when it will only provide 330k SF, and why virtually every new building in the neighborhood is the product of a superstar architect.

[mhays]

Mass upzones don't do that to land prices. Prices remain lower because there's a vast supply and limited demand. Further, any buyer who didn't go through with their new building would face very high carrying costs, i.e. there's a ton of risk, with much smaller existing buildings to tide them over. Prices would get higher, possibly by a lot, but they'd stay well below Midtown rates.

Of course, to a teardown buyer, land is worth more if there's less currently there. So that would help the prices. Meanwhile, Midtown would have less price pressure, so values should decline there.

In this case, I also suspect that the overall tenant market cares more about proximity to other industry firms, direct subway/rail links, etc., and that might favor Midtown and Downtown forever.

[599GTO]

Originally Posted by uaarkson

Not to mention that area of Manhattan is now the largest and most powerful NIMBY fortress in the world.

And thank God for that. I shudder to think what the beautiful neighborhoods in the valley would look like today if they weren't filled with rich powerful NIMBYs. New York is a city of greed and rabid capitalism and if given a chance, greedy tacky developers would bulldoze the entire Tribeca for instance, and replace the cast-iron structures with crappy towers in a heartbeat.

The only NIMBYs that truly bother me are the NIMBYs in Midtown. Lower Manhattan as well, but I don't ever hear of NIMBYs acting up in Lower Manhattan.

[10023]

Originally Posted by 599GTO

And thank God for that. I shudder to think what the beautiful neighborhoods in the valley would look like today if they weren't filled with rich powerful NIMBYs. New York is a city of greed and rabid capitalism and if given a chance, greedy tacky developers would bulldoze the entire Tribeca for instance, and replace the cast-iron structures with crappy towers in a heartbeat.

These neighborhoods - TriBeCa, SoHo, Greenwich Village (and the West and East Village) - are the best part of Manhattan.

Nothing would ruin that faster than developers putting up a bunch of office towers. Some "boutique" buildings that housed some hedge funds and the like wouldn't be the end of the world, but turning these parts of the city into Midtown South would be a travesty.