The developer, S.J.P. Residential, will set aside 3,500 square feet to be used by a few small theatre troupes. The offices will be rented at $73,500 a year, or $21 a square foot, which is half the going rate in the theatre district, according to the daily. In doing so, the builder is complying with a zoning rule passed in 1998, which calls for a developer who buys air rights from a Broadway theatre in order to erect a high rise to make concessions to the surrounding theatre industry.
S.J.P. purchased the air rights over the Al Hirschfeld Theatre, a Jujamcyn house, in order to proceed with its condo tower.
The building will be erected at the northeast corner of Eighth Avenue and 46th Street, the site of McHale's, a 50-year-old bar and restaurant that was a popular destination of Broadway stagehands, musicians and actors. Several small stage companies occupied floors above the bar. Those displaced outfits will be given special consideration when it comes time to rent out the office space.
As part of the zoning rules. S.J.P. will also pay $10 million into a fund for theatre development. There is not yet a panel to oversee the fund.
The rezoning laws, which encompass much of midtown Eighth Avenue from 42nd Street to 57th Street, were passed by the New York City Council in August 1998. The issue inspired heated debate on either side of the issue for many months prior the vote. Residents of the Clinton community, which abuts Eighth Avenue on the west side, were vociferous in their opposition to the measure, which they contended was a giveaway to theatre owners and real estate developers and would destroy the character of the neighborhood—then, one of the more affordable in Manhattan. The plan was put forth by theatre leaders as a needed boost for the Broadway theatre industry. The Department of Planning's proposal allowed theatre owners to sell the "air rights"—the empty space above their landmarked theatres—to developers who wished to build along Eighth Avenue between 40th and 57th streets in excess of current zoning laws. A portion of the money theatre owners would cull from the windfall, meanwhile, would be deposited into a theatre fund, intended for the upkeep of landmark theatres and the development of new plays. Additionally, theatres who sell development rights would have to commit their properties to theatrical use for a period of 25 years.
Complaints against the measure resulted in the June 1998 passage, by the New York City Planning Commission, of a revised version of the measure. A new provision in the plan removed a set of regulations which would have encouraged the construction of large office buildings on the avenue's west side, therefore increasing the likelihood that any development would be residential. Other changes in the proposal helped ensure that participating Broadway theatres remain committed to stage use. A provision which allowed for a temporary interim change of use during the 25-year period was revoked. Also, another provision permitting theatres to apply for a modification of use after the 25 years was eliminated.