Yesterday afternoon, the New York City Council, led by Council Speaker Christine Quinn, dealt a huge blow to Mayor Bloomberg's plans to massively rezone East Midtown Manhattan for more modern skyscrapers. The Council indicated that the proposal would fail in a vote, so the mayor's office withdrew the proposal. Quinn and City Councilman Daniel Garodnick said in a statement, "A good idea alone is not enough to justify action today. We should rezone East Midtown, but only when we can do so properly. After extensive negotiations, we have been unable to reach agreement on a number of issues in the proposed plan."

Most parties agree that East Midtown should be rezoned for more commercial space, to create jobs and to keep NYC competitive with other global cities. However, there has been concern about the size and number of the new buildings, how air rights would be sold (and at what price, how much developers would profit, how existing historical/landmark buildings would be preserved—the Chrysler Building would be blocked, according to one study) and how much funding infrastructure would get in this new, much more bustling area. Quinn and Garodnick also said, "The public realm plan is aspirational, and it is unclear at this point whether some of its most visionary improvements can even be executed."

Bloomberg reminded everyone of the potential in his statement, "This will unfortunately cost the area hundreds of millions of dollars in badly needed subway and street improvements and $1 billion in additional tax revenue - as well as tens of thousands of new jobs that would have been created." He also pointed out there was a public review process and extensive effort to get various groups and religious institutions on board, plus a "financing agreement in place to pre-fund $100 million in mass transit and public space improvements before any new development could begin, but that funding was predicated on future development, which now will not occur."

However, he also added, "The inability to reach a consensus on the plan’s details is regrettable, but it was encouraging that nearly everyone involved in the process recognized the need for the area to be rezoned to ensure that it remains competitive with other business districts around the world, and we appreciate the time that Speaker Quinn, Council Member Garodnick, and Council staff put into this issue. We are glad to at least be leaving the next administration a blueprint for future action."

Speaking of future action, Mayor-elect Bill de Blasio weighed in thus:

"For the sake of New York City’s long-term economic vitality, Midtown East should be re-zoned to allow the creation of a world-class 21st-century commercial district. But it needs to be done right.

"We cannot afford to hand over the right to develop some of the most valuable real estate in the world without ensuring real and fair benefits for the people of New York City. We need to address the many unanswered questions about this plan, including how to build the infrastructure needed to accommodate the additional density created by the rezoning, and how to ensure that new development rights are appropriately priced to create the best possible value for the City.

"I applaud the City Council for pressing the pause button in order to ensure these concerns are adequately addressed. We must continue this process in earnest upon taking office, and I commit to presenting a revised rezoning plan for the area by the end of 2014."

And Councilwoman and Manhattan Borough President-elect Gale Brewer who has had concerns about the proposal said, "I hope that next year all stakeholders are at the table to discuss all aspects of East Midtown. It is my firm belief that we can still achieve the primary purpose of the plan put forth by the Bloomberg Administration, but in a way that takes into account all of the perspectives of the many stakeholders who wish to see a better, more viable East Midtown for decades to come."

The NY Times called the Council's decision a "fatal blow" to Bloomberg's vision, "Some real estate leaders attributed the defeat of the rezoning to Peter Ward, president of the Hotel Trades Council, a union umbrella group that has a good deal of influence in the council. The Bloomberg administration had rejected Mr. Ward’s request that plans for hotels in the district go through a special approval process that has often allowed the union to secure guarantees on wage levels. City Hall, however, failed to get a single community leader, state legislator or council member from the district to drop their opposition."

Crain's New York, which described it as a "striking rebuke" to the Bloomberg administration, says, "Among the likely beneficiaries are the Related Cos. and Brookfield Office Properties, who are planning to put up multiple new office towers in Hudson Yards west of Pennsylvania Station. So too is Silverstein Properties, the developer which will open its first new tower at the World Trade Center site on Wednesday and has laid the ground work for two more towers nearby—buildings that now stand a better chance of being built."