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The existing conditions in the Fashion District - the limits of office use, restrictions on residential development and under-performing retail - already pose a substantial cost both in terms of lost income and City tax revenues. According to a 1999 study conducted by REBNY, buildings in the Special Garment Center District area (including both those in the Preservation Area and those on the avenues) were assessed at lower rates per square foot than buildings in a comparable M-zoned mixed-used area (Seventh to Park Avenue South, 23rd to 28th Street in Manhattan). Taking into account differences in building type and size, the study found that assessed values in the Garment Center ranged from $1.10 to $7.08 per SF less than what was found in the comparison area. REBNY expresses concern with this finding because "one would expect higher values in the Garment Center given the central location and proximity of transportation." By their calculations, the differential in assessed values amounted to $30,125,806 in lost tax revenues for the City between the years of 1995 and 1999.
The costs of foregone tax revenues could grow if policymakers fail to take action and confront the forces at play in and around the Fashion District. Without efforts to drive new investment in the area and to attract dynamic, growing segments of the City’s economy, the economic expansion that is poised to occur in the surrounding areas will simply bypass the Fashion District. As manufacturing continues to decline, existing buildings will be at risk of becoming underutilized, depriving owners of any incentive for reinvestment. As the surrounding areas benefit from new investment, the Fashion District’s lack of retail, residential or business activity will make the area even less desirable to tenants. This would be a lamentable loss of opportunity to capitalize on the inherent value of a strategically located and currently undervalued segment of the Midtown Manhattan marketplace.
In addition, if the Fashion District does not evolve to attract more shoppers, tourists and business activity, the neighborhood could fail as a connection between Midtown and the Hudson Yards, jeopardizing the success of this massive investment. Another concern is that the City’s Olympic development could be compromised by the proximity and striking contrast to the Fashion District. Pursuing new economic opportunities in the Fashion District would enhance the positive impacts other investments in surrounding areas, while inaction in the Fashion District could be a drain on the these investments.
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