Audit Report on the City’s Oversight over Privately Owned Public Spaces

Executive Summary

Privately Owned Public Spaces (POPS) are outdoor or indoor spaces, open for public use that are built and are maintained by the developers and owners of private buildings.  POPS are created by building developers in exchange for New York City allowing them to construct buildings at greater heights and densities (and as a result, with greater floor area) than would otherwise be allowed by applicable zoning regulations.  POPS may be required to include designated amenities within or outside their buildings.  The Zoning Resolution of the City of New York in effect at the time that each of the City’s POPS was created (the Zoning Resolution or ZR) sets the standards that govern each POPS.  Currently property owners are benefiting financially from approximately 23 million square feet of additional (bonus) floor area in their buildings in exchange for providing POPS at 333 locations in New York City.

Two City agencies oversee different aspects of developers’ and owners’ compliance with their POPS agreements: the New York City Department of Buildings (DOB) and the New York City Department of City Planning (DCP)[1].   DOB enforces the City’s Building Code and Zoning Resolution.  In addition, DOB is responsible for issuing violation notices to owners when POPS are found to be out of compliance with applicable agreements.  Those violations carry penalties of $4,000.  In the event that the building owner defaults on a notice of violation the penalty increases to $10,000.  Challenges to notices of violation issued to a POPS are heard by the New York City Environmental Control Board (ECB), an administrative tribunal that provides hearings on various types of notices of violation issued by City agencies, including DOB.  DCP, the other agency with responsibility for POPS, is responsible for overseeing land use in New York City.   DCP currently certifies POPS’ compliance with zoning regulations prior to the developer obtaining a foundation permit and conducts periodic compliance reviews for POPS created after 2007.

Audit Findings and Conclusion

Our audit found that the City is not adequately overseeing POPS agreements.  We inspected all 333 of the POPS locations and found that more than half (182 of the 333) failed to provide required public amenities.  In some cases, the required amenities simply did not exist; in others, they were non-functioning.  We found cases where the general public was excluded from POPS because restaurants were allowed to use supposedly public spaces for restaurant seating and had cordoned off portions of the POPS to restrict public use.  We also found cases where public access was otherwise impermissibly limited or denied entirely.  In some instances, the violations had existed for years without any discernible enforcement action taken by the City.  A list of the 333 locations designated as POPS is annexed as the Appendix to this report.  It identifies each POPS location by street address and notes where the auditors found violations of the Zoning Resolution during their visits.

Overall, we also found that:

• 275 (83 percent) of the 333 POPS locations had not been inspected by DOB for compliance with applicable requirements in at least four years.
• For the remaining 58 locations—those that had been inspected within the last four years—we found that DOB conducted 87 inspections (multiple inspections were made of several locations). Based on those inspections, DOB issued 18 violations to 10 of the POPS locations inspected.
• Based on our observations of the 58 POPS locations that had been inspected by DOB in the last four years, we found that 41 (71 percent) were not in compliance with their POPS agreements for one or more reasons at the time of our review.
• In 34 of the 87 inspections (39 percent) that DOB conducted in the last four years, we found that the inspections did not occur within 40 days of DOB having received a complaint, the time frame DOB has set as a goal for such inspections.
• Further, we found that although DOB has been responsible since 1961 for enforcing the Zoning Resolution that created POPS, it has not maintained a complete and accurate database of all the POPS’ locations and their required amenities. Our findings suggest that, in some cases at least, the lack of a DOB database may have led inspectors to incorrectly indicate in DOB records that a site is not a POPS or that an amenity is not required.  DOB informed us during the exit conference that within the past year it has created a unique POPS database.
• Finally, we note that 151 of the 333 POPS locations are not required by the Zoning Resolution to post signs identifying the locations as a POPS because they were built prior to signage requirements being put in effect. Without such signs, however, members of the public would be highly unlikely to know that a location is a POPS.  During the period reviewed, DOB inspections were commenced only in response to individual complaints.

Audit Recommendations

The Department of Buildings should:

• Ensure the completion of an accurate database of all the POPS and ensure that it includes the type, size, hours of operations, and the specific amenities required.
• Ensure that the database can be accessed by DOB inspectors.
• Train inspectors on how to access the database to get information on the POPS.
• Ensure that DOB’s Buildings Information System identifies all POPS locations.
• Develop a monitoring policy that that requires all POPS to be inspected by DOB at sufficiently frequent intervals to ensure effective enforcement of the Zoning Resolution. Depending on history of compliance, some locations may require less frequent inspections, while others more frequent inspections.
• Inspect the 333 POPS locations to ensure that all POPS:
  • Are still in existence;
  • Provide the required amenities;
  • Offer full public access as required.
• Schedule inspections of the outdoor POPS locations during warmer months when certain types of non-compliance would more likely to be observed, such as use of a POPS by a restaurant for outdoor seating.
• Ensure that inspections of a POPS complaint:
  • Are performed a time and day of the week that corresponds to the complaint;
  • Are performed within the time frame set as a goal by DOB for its response to these type of complaints;
  • Are performed during the time of year that corresponds to the complaint;
  • Are followed by a re-inspection to ensure that the violation is corrected.
• Refer the apparent destruction of the POPS at 410 East 58th Street in Manhattan to the City Law Department to take appropriate action.

The Department of City Planning should:

• Develop an advertising campaign to inform the public about all POPS locations and the required amenities required to be provided at each.
• Consider:
  • Posting signs on the street identifying a space as a POPS, similar to that done when a location is identified as a historical site;
  • Creating a City website available to the public that identifies every POPS location and its required amenities;
  • Employing various means of making the availability of POPS and the amenities they should provide available to the public, including advertising the website on subways, buses and social media.

Agency Response

In its response, DOB did not dispute the report’s findings and stated that “[w]e . . . will use [the audit findings] as a guide to further improve our policies and procedures.”  DOB described specific steps it has taken to implement six of the nine recommendations.  However, DOB disagreed with three recommendations related to its inspections of POPS locations.  Specifically, DOB stated that: 1) it is unwilling to change its inspections protocol from one in which it conducts inspections only in response to complaints, to a pro-active systematic protocol that ensures that all POPS locations are inspected on a regular schedule; 2) in response to the audit findings, it will not now inspect all 333 POPS locations to verify that they exist, contain all of the required amenities, and provide full public access in accordance with applicable requirements; and 3) it will not schedule inspections to correspond to the appropriate seasons cited in the complaints it receives to ensure that POPS locations are inspected at times relevant to the allegations.

In explaining its disagreement with these three audit recommendations, DOB contends that its current practices are sufficient because they “apply to all [DOB] inspectorial units” and “are consistent Citywide.”  However, that response disregards the unrefuted evidence presented by this audit that the agency’s policies and practices fail to ensure that POPS are consistently providing the open space and amenities to the public required by law.  Indeed, DOB acknowledges that it “understands the logic behind [the] recommendation” that inspections be conducted during the season when the inspectors are most likely to observe whether an alleged violation exists (such as inspecting a POPS location in the warm weather when the complaint alleges a restaurant is using it and denying access to the public).  Yet, rather than agreeing to follow the audit’s recommendation to conduct its inspections during relevant times of the year, DOB instead rejects the recommendation because it contends that the recommendation “may not be a practical solution in most instances.”

The audit demonstrates that over half of the City’s POPS locations failed to provide required public amenities or denied access to the public.  In some instances, the POPS violations have existed for years without any discernible enforcement action having been taken by the City.  In many cases, the non-compliant building owners are not only profiting from the additional floor area they received in exchange for promising to provide additional public space, but may also be impermissibly profiting from renting out, using, or promoting the use of the POPS spaces by private businesses.  And in one case, we found that the POPS does not exist at all.  DOB’s refusal to modify its inspection protocol will only allow POPS locations to continue to be misused or neglected in violation of their agreements.  We strongly urge DOB to reconsider its response and adopt all of the audit’s recommendations.

In their response, DCP officials did not dispute the report’s findings and described steps they have taken to implement the two recommendations addressed to them.  However, DCP did not respond to the recommendation that it consider “posting signs on the street identifying a space as a POPS.”  Instead, DCP indicated that “[i]n order for signage to be required at pre-1977 POPS, a local law mandating signage at all POPS would need to be enacted.”  We urge DCP to pursue the avenues required to seek enactment of a local law mandating signage at all POPS locations.

[1] The agreements are the site plans that are approved by the Department of Buildings, City Planning Commission, the Chairperson of the City Planning Commission, and the Board of Standards and Appeals.