Spanish fast-fashion brand, ZARA, found itself on the front line of the SoHo/NoHo rezoning debate when it appeared before City Council last week for a special permit to legalize retail on the second floor of its flagship SoHo store.

The apparel company has been operating a 14,000 square-foot second floor space since it opened at 503 Broadway in March 2016. Now, four years later, and after violations from the Department of Buildings, this request is the first real test of the findings in the controversial Envision SoHo/NoHo Report. Released back in November, the community-based initiative aims to determine whether updates to 30-year-old zoning rules are necessary for the economic vitality of the historic districts. And it’s become a highly-debated document, especially since the public engagement plan has done anything but bridge the divides between new and old residents, retailers, artists, city planners and developers, each with an agenda.

ZARA’s lawyer opened testimony before City Council by citing the Report’s findings that SoHo is indeed a “mixed-use neighborhood.” Yet, this is not reflected in the manufacturing district zoning code governing buildings along Broadway. As it stands, retail is restricted on upper floors and permits factory and sales room uses only.

In turn, Community Board 2 used the Report to bolster its unanimous denial of the special permit. When CB2 Chair, Carter Booth, testified at the hearing, he highlighted page 52, which outlines enforcement of zoning rules and building codes.

The SoHo/NoHo Report offers more ideas than conclusions, but the overarching theme authored by city planner Johnathan Martin, is that predictability in land-use creates economic diversity. Zoning code is still considered one of the best tools for cities to encourage specific types of uses, and if applied correctly, these restrictions could create retail diversity in a mixed-use district. Critics believe that SoHo is already oversaturated by national brands and too dependent on an apparel industry, that has, in recent years, proved volatile. In the current economic environment, other potential second floor leases might not have the ability to compete with retailers like ZARA. And the fear is that this special permit would set a precedent. That said, the Report does make the case to cap commercial retail at 10,000 square-feet moving forward. (ZARA currently has 42,000 square-feet on Broadway, including the second floor and cellar.)

With City Planning Commissioner, Marisa Lago, advocating more “space for jobs,” it’s not surprising CPC approved the special permit on the condition that ZARA work with the community to remedy its delivery procedures. A statement released by the agency maintained that large retail spaces are not out of context in SoHo, and that Broadway has always been a commercial corridor with truck traffic and wide sidewalks to accommodate heavy loading and unloading. But CB2 and residents insist that ZARA’s 14 deliveries per week monopolizes the public streets.

Another key supporter of ZARA’s special permit was Mark Dicus of the SoHo Broadway Initiative. As Executive Director of the SoHo Business Improvement District (BID), Dicus came out in favor of ZARA as a “good neighbor.” But also, in the interest of transparency, admitted that the business is also a member and sponsor of the BID, which advocates for rezoning and larger than 10,000 square-foot retail stores on the Broadway corridor, while also part of the advisory committee for the Envision SoHo/NoHo Report.

But all eyes were on three-term Councilmember Margaret Chin last week as the application landed in the lap of the Land-Use Committee that she leads. For her part, Chin, who is also a Co-Sponsor of the SoHo/NoHo Report, clarified that community voice was strongly opposed to the permit. However, she steered clear of discussing any zoning code violations, instead concentrating solely on quality-of-life and how ZARA could reduce the number of deliveries.

However, Community Board 2, local residents, and activists opposed the idea that ZARA’s second floor permit hinges solely on “quality of life” issues as it pertains to frequency of deliveries. CB2’s resolution to deny is related to ambiguity around how ZARA obtained a Certificate of Occupancy from the Department of Buildings after it purchased the building, formerly leased by Old Navy until 2015.

CB2’s resolution on the matter outlines how the entirety of ZARA’s retail space, not just the second floor, is non-conforming to zoning codes. Whether or not the company properly obtained a change-of-use Certificate of Occupancy from DOB remains unclear.

Manhattan Borough President Gale Brewer, another Co-Sponsor of the Envision SoHo/NoHo Report, echoed CB2’s statements about the apparent lack of code compliance. This ambiguity formed the basis for her denial of ZARA’s special permit application. Moreover, Brewer’s resolution further explains the denial by citing the deleterious effects of high frequency of deliveries and heavy unloading process. Also that ZARA was not compliant with the requirement that two loading docks be maintained for retail stores of its size (42,000 square-feet). The resolution also admonished the retailer for not seeking a waiver for the off-street loading docks.

At the hearing, though, ZARA appealed to City Council that it could not accommodate the loading docks as it would be detrimental to the historical facade.