Elected officials and the city’s largest commercial landlord broke ground on Tuesday on a planned 58-story office building on Vanderbilt Avenue in Midtown East. The ceremony was a milestone in the city’s effort to modernize the area and attract new businesses.

The $3 billion, 1,400-feet tower, called One Vanderbilt, would be the second tallest in New York City. Officials said it is expected to open in 2020 and would spur economic development in an area that is unappealing to high-caliber tenants because of aging office buildings.

SL Green Realty Corp., the tower’s developer, will also allocate $220 million to upgrade commuter access in and around Grand Central Terminal, in exchange for the right to erect a taller building than the maximum height currently permitted. Mayor Bill de Blasio called the deal a win for the city.

‘We needed to set a new template for ensuring that there are real, positive developments for the people of this city and our continued effort to ensure that this is livable city for all,” the mayor said. “We have to really think about the people who live and work in the community, the people who take the subway and get to work … how make their lives belier.

“This is the kind of development we need that helps us address our core infrastructure challenges — the kind of development people can look at and feel very good about the fact that there was something in it for them, as well as for the partners in the project. We need growth that the people of city can see and believe.”

The transportation upgrades aim to alleviate overcrowding at the station, particularly on the 4, 5 and 6 trains. It would allow the Metropolitan Transportation Authority to run an additional train per hour on the Lexington Avenue subway line and create multiple exit areas for better rider flow. Another key part of the deal is a street-level pedestrian plaza.

De Blasio said SL Green is required to complete the transportation improvements before the building can be occupied. TD Bank has already agreed to anchor about 200,000 square feet of office space and occupy a flagship retail store.

A plan to rezone the area was first put forward by former mayor Michael Bloomberg, but it faced criticism from community groups. There were concerns about congestion and tangible benefits for New Yorkers, and it failed to garner support in the City Council. But after negotiations involving de Blasio, who took office in 2014, and other key elected officials, the Council approved the plan in May, 2015. Elected officials said the new version of the rezoning plan has addressed some key objections.

‘For too long, East Midtown has been burdened by outdated rules, perhaps nowhere worse than Vanderbilt Avenue, an area that resembles a back ally than a vibrant business district,” said Councilman Daniel Garodnick, whose district includes the rezoned area. Garodnick, who played a key role in the decision process, added that while the “chronically underfunded” transportation system is ‘lundamentally the obligation of the [state], we cannot wait for them. Commuters cannot wait any longer. SL Green will bring an unprecedented $220 million in infrastructure improvement.”

Marc Holliday, chief executive officer of SL Green, said the challenges that had been posed in the past “were great, as they should be, when anyone is embarking on a project that has a permanent and powerful effect on the city.”

“One Vanderbilt will serve as a blueprint for smart, 21st century commercial development by unlocking density, delivering architectural excellence and spurring transit development throughout the entire district,” said Holliday. One Vanderbilt’s groundbreaking comes almost two months after the Department of City Planning unveiled its second proposal to rezone the Midtown East business district to allow developers to erect taller buildings and increase the current permitted maximum density by about 30 percent.

Under this proposal, which is making its way through the bureaucratic land use approval process known as ULURP, the city is seeking to rezone a 78-block area bounded by East 39th and East 57th Streets to the north and south, and Madison Avenue and Third Avenue to the east and west. Planning documents show that the rezoning would yield 16 towers, 6.6 million square feet of new office space and accommodate about 26,507 workers. The area now has approximately 70 million square feet of office space, and of the more than 475 buildings, over 300 are at least 50 years old.
Officials said on Tuesday that they’re hoping the rezoning will be approved by 2017.