Final Letter Report On The Follow-up Review Of The City’s Oversight Over Privately Owned Public Spaces

Executive Summary

This report presents the results of the follow-up review the New York City Comptroller’s Audit Bureau conducted to determine whether the Privately Owned Public Spaces (POPS) previously found noncompliant in our Audit Report on the City’s Oversight over Privately Owned Public Spaces (Audit #SR16-102A), issued on April 18, 2017, now provide all the required amenities, and the extent to which the Department of Buildings (DOB) has taken action to bring those POPS into compliance.

POPS are outdoor or indoor spaces, open for public use that are built and maintained by the developers and owners of private buildings.  Building developers create POPS in exchange for the City’s permitting them to construct buildings at greater heights and densities (and as a result, with greater floor area) than zoning regulations would otherwise allow.  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 establishes 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 location in New York City.

Two City agencies oversee different aspects of developers’ and owners’ compliance with their POPS agreements:  DOB and the New York City Department of City Planning (DCP).  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.  The violations carry penalties of $4,000, which increase to $10,000 in the event the building owner defaults.  Challenges to notices of violation issued to a POPS are 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, was established to oversee land use in New York City.  DCP currently certifies POPS’ compliance with zoning regulations prior to the developer’s obtaining a foundation permit and conducts periodic compliance reviews for POPS created after 2007.

To conduct our review, we selected a sample of 34 POPS locations out of the 182 we previously found to be out of compliance with the applicable Zoning Resolution, and we analyzed DOB records to determine whether it had inspected those locations for POPS-compliance as of August 15, 2017 (118 days after the release of our audit report on April 18, 2017).

Audit Findings and Conclusions

Based on our review of DOB’s Building Information System (BIS), we determined that DOB had visited only 8 of the 34 sampled POPS locations (fewer than a quarter) and that its inspections of those 8 sites were conducted as a result of complaints recorded in New York City’s 311 system.  According to BIS, DOB issued violation notices to four of the eight locations.  However, only three of those charged violations were documented in BIS.  As reported in BIS, of the three notices of violations issued, one resulted in the imposition of a monetary penalty of $4,000, and the other two were awaiting administrative adjudication at the time of our review.

In addition as part of our follow-up review, in July and August 2017, we re-inspected or attempted to re-inspect all 34 POPS locations in our sample to determine whether the conditions cited in the previous audit were corrected.  Our review found that 32 locations still lacked at least some required amenities or continued to deny the requisite level of access to the public.

Audit Recommendations

Based on the findings of this follow-up review, we reissued the following three recommendations that DOB disagreed with in its original response.

1. DOB should inspect all 333 POPS locations to ensure that they are in compliance with their agreements to ensure that they:
   • Are still in existence;
   • Provide the required amenities; and
   • Offer full public access as required.
2. In conjunction with this recommendation we recommend that DOB prioritize inspections of the 182 noncompliant POPS locations identified in our original audit, treating the audit report and this follow-up as the equivalent of the kinds of complaints from the public that result in DOB inspections.
3. DOB should develop a monitoring policy 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.
4. DOB should 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.

Agency Response

In its response, DOB stated it will comply with Local Law 116 of 2017 and inspect POPS on a regular basis.