Behind Scenes, Milsteins and CB1 Clash Over 250 Water St. By Ronald Drenger A battle dating back 20 years between community activists in the South Street Seaport area and the Milstein real estate family has flared up yet again. Hoping to derail a Milstein plan to put a residential tower at 250 Water Street, Community Board 1 is trying to change city zoning rules to lower the allowable building height in the historic South Street Seaport neighborhood. At the same time, Milstein Properties, the site’s owner, appears to be working behind the scenes to win support for its building plans. CB1 had worked on its rezoning proposal with the city’s Department of City Planning for two years and believed it had the city’s support. But last month, just as City Planning launched a public review process for the proposal, CB1 members said that city officials seemed to be pulling back. Among other signs, Deputy Mayor Daniel Doctoroff canceled an Oct. 17 meeting with rezoning advocates. Milstein Properties, the CB1 members say, has been lobbying to defeat the proposal, which the City Planning Commission will vote on this winter. The real estate powerhouse is reportedly modifying a 1996 plan, which called for a 450,000-square-foot residential complex with two apartment towers, 14 and 30 stories tall. That plan, which would not be allowed under the proposed zoning, was withdrawn in 1997 while it was under review by the Landmarks Preservation Commission. “We have heard from many different consituencies, including the property owners, who have raised issues about the proposed rezoning,” said Robyn Stein, a City Planning spokeswoman. James Yasser, an executive vice president at Milstein, and Ross Moskowitz, a Milstein attorney, referred calls to company spokesman George Arzt, who declined to comment. The Mayor’s office also had no comment. The community board, preservationists and the Seaport Community Coalition, a group of local residents and organizations, want the rezoning to protect the architectural character of the area—mostly four- and five-story buildings, some from the 19th century. Their main concern is the block-long, 48,000-square-foot site at 250 Water Street, between Beekman Street and Peck Slip, a parking lot that the Milsteins bought in 1979. Current zoning would allow a building of up to 480,000 square feet, with no height limit. But between 1983 and 1995, the Landmarks Commission rejected more than half a dozen Milstein proposals for buildings up to 43 stories tall, allowable under the zoning rules, saying they were inappropriate inside the Seaport Historic District. Community leaders say they want to align the zoning with the historic district designation. Their plan would allow a maximum of 290,000 square feet, with a height limit of 120 feet, which they say would still allow the Milsteins a healthy profit. But they fear the developers may convince the Mayor’s office and City Planning to oppose the proposed rules by arguing that residential development would help revitalize Downtown. “We have to make it clear that that’s not acceptable,” said Madelyn Wils, chair of CB1 and a board member of the Lower Manhattan Development Corporation. “The rezoning is even more appropriate now,” said Gary Fagin, a member of the Seaport Community Coalition and a former CB1 member. “We need to protect what is historic in the district and promote the tourism that remains the lifeblood of Seaport development. Large-scale residential or commercial development will not promote the attractiveness of the area.” The Coalition in 1997 came up with its own proposal for a development with four- and five-story townhouses, which it said would fit in with surrounding buildings. The Landmarks Commission decided not to review the community’s plan after Milstein withdrew its development proposal.