Downtown Skyscraper District: He Said/He Said On Landmarks Approval

By on February 8, 2012 9:34 pm in Brooklyn History, Commercial Real Estate, Downtown Brooklyn, Landmark Preservation

Despite City Council approval February 1 of the Borough Hall Skyscraper Historic District, which designated 21 buildings along Court Street as a new landmark district, the debate continues in an Op-Ed He Said/He Said piece in the Brooklyn Courier. Commentary is offered from supporter Philip Magnuson, chair of the Brooklyn Heights Assn. Landmark Preservation Committee; and opponent Steven Spinola, president of the Real Estate Board of New York.

Read both pieces in their entirety here, with edited highlights below…

Philip Magnuson
The Borough Hall Skyscraper Historic District, with the splendid Greek Revival Borough Hall and North Plaza at its focus, is figuratively and functionally the urban center of Brooklyn, located at the civic, business, education and transportation hub of the borough. It is the interface of the vibrant neighborhoods of Metrotech, Fulton/Downtown, Court Street and Brooklyn Heights. They all share the new district as a historic core and a distinctly Brooklyn’s “Town Square.”

This historic district is on its way to cohesion and vitality. Also, like so many inner city districts now returning to robustness, it is rich with a varied, significant and potentially endangered architectural context. The assemblage of important, large-scale, early 20th century skyscrapers along Court Street, each with its own exuberant historical style, embrace a richness and scale befitting the official and commercial heart of Brooklyn. The skyscrapers play a significant role in defining the singular quality of this area.

The designation of the Court Street skyscrapers is a timely step in recollecting, acknowledging and preserving Brooklyn’s urban richness. We believe the Borough Hall Skyscraper Historic District will safeguard and support the present and future renaissance of this unique neighborhood.

Steven Spinola
The creation of a Downtown Brooklyn Skyscraper Historic District is unwarranted and would add burdensome costs for local property owners and retail tenants. The Real Estate Board of New York believes there is no need to create a special historic district in this area of Downtown. In fact, the report of the Landmarks Preservation Commission notes that several of these buildings have no distinctive architectural style worth protecting and have undergone numerous renovations over the decades.

More troubling, creating a special historic district would impose millions of dollars of additional costs on existing property owners and retail tenants. Once an area is landmarked, significant added costs (are) attached to property improvements; one must acquire additional city approvals and it takes longer to secure such approvals, and all improvements are subject to review.

Many require further review by the Landmarks Preservation Commission, which often requires plans to be redone and certain materials to be used, which adds time and cost to any renovation. These delays often result in massive losses for retailers and landlords because space sits empty while awaiting commission approval.

The commercial office market on Court Street is already suffering with a 17% vacancy rate. The landmark designation will impose an additional tax on such space, making it more difficult to rent and provide less incentive to upgrade. This proposal will harm rather than help the properties in this district.

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  • carol

    He said/He exaggerated:

    Where on earth did Spinola get his information? He claims that the district will “impose millions of dollars of additional costs on property owners..” Pul-eez!
    Or what about the statement that “one must acquire addtional city approvals…” I think there is just ONE – Landmarks Preservation Commission.
    And finally “Court Street is suffering a 17% vacancy rate..” and landmarks will make it worse. Did it ever occur to REBNY that the folks in downtown Brooklyn cannot buy any more dental floss, shampoo or toilet paper from the duplicative drug stores that profilerate commercial districts including Court Street? Nah, it’s easier to blame Landmarks.

  • stuart

    This has little to do with landmark significance or restoration standards or rental income, it is all about ego and hubris.
    Certain individuals feel that they are too important and too well connected to follow the rules that regular folks in Brooklyn Heights have obeyed for decades.
    Hubris, ego, self-aggrandizement, vanity.
    Those are the motivating factors.
    End of story.

  • michael

    I appreciate the frustrated tone in the comments above but the fact of the matter is that landmarks designation will increase costs for those in these properties, and Landmarks, historically (no pun intended), is not the quickest of bureacracies.

    I don’t feel that bad for the commercial operators in this district. They can easily pass along any cost increases — and spread across many offices, it shouldn’t be that bad. The one issue is with the one residential building in the district — 75 Livingston. It is a wonderful piece of architecture, no doubt. But the cost of maintaining a terra cotta building like that must be enormous. And since there are many longtime residents in that building — some of who are now presumably on fixed inclomes — the added monthly expenses that may get factored into coop fees there could be extremely onerous to some.

    Sure, the value of the buildings and units might go up but that may not help people make their monthly nut.

    Maybe not a popilar opinion but it shouldn’t be ignored. THe issue here is more nuanced than many make it out to be.

  • stuart

    there is little added cost to repair and restoration of buildings in landmark districts unless you are looking to do smash and shmear work that was popular in the 1950’s and 60’s.
    What is expensive is to propose non-restorative work such as rooftop additions. That is not an option in this area. These buildings are already way overbuilt by current zoning standards.
    Bottom line: there is no additional cost to facade work that is not Neanderthal quality. Owners of beautiful old buildings today who need to do facade repairs naturally insist that their contractor match the brick, match the stonework, and not disfigure their building. That is standard practice today. Who strips their building of ornament any more? There is no additional cost to this work in historic districts. None. It’s hooey. It’s propaganda. It’s BS.

  • michael

    Stuart — I don’t have a problem with the landmark designation but your comment about costs is simply wrong. I get your contractor point. However, you are neglecting the fact that landmark status adds time to the process and often significant, additional architect and legal costs.

  • Cassandra

    Michael is correct about the potentially significant incremental costs imposed by landmarking on the costs imposed by Local Law 11, which was adopted to address public safety concerns when deaths caused by 75 Livingston Street and another building near Columbia exposed the dangers of New York’s then historically undermaintained facades.

    These incremental costs imposed by mandatory historic preservation, via a law unrelated to fundamental health, safety and public welfare purposes, are added to an existing high regulatory burden on both the coops and commercial buildings in this district. Besides Local Law 11, these buildings are subject to Class 2 property tax rates, which are higher than the Class 1 property tax rates that apply to the majority of residential buildings in the majority of historic districts (a trend likely to change now that LPC is on a historic designation tear with an explicit policy goal of landmarking primarily commercial districts) and a host of other public safety and environmental regulations that most Class 1 properties are not subject to, that impose a high operational cost burden. Among these environmental laws are a raft of new environmental sustainability laws (with more to come), of which no one yet knows the financial cost impact on building operations and maintenance.

    LPC has been significantly increasing the mandated preservation of buildings across the city–check out the Mayor’s Management Report. It is an agency out of control, just from looking at that data. The charter law authorizing mandatory preservation imposes no effective procedural check on this process–the check by a sister agency, the Department of City Planning, is illusory. And the Council, which many hoped in 1989 would prove to be a real check on the power of the Mayor, is little different, in the area of landmark designation, than the description of an earlier Council as not even a rubber stamp which as least leaves a mark.

    The fact that the government does not have to pay for either the increased costs imposed by the law or the diminutionin value resulting from the law (there is a relation between increased costs and value) means that there is no real check on governmental action or in this case coercion. There are no studies that demonstrate that landmarking increases value. The only credible study based on New York City data evaluated primarily residential districts and could only conclude that mandatory preservation did not harm the value of those regulated properties. This district is 90% commercial and no one has ever evaluated the consequences of mandating the preservation of commerical buildings, especially those that have been historically undermaintained for decades, have never been robustly occupied and have never commanded the rent levels that the city’s more successful central business districts have commanded. REBNY’s model is based on assessing the incremental costs to the existing costs of these large old buildings. Moreover, there is no study that asserts that landmarking commercial property is an effective urban planning tool for increasing the economic viability of a commercial area. And yet the preservation community continues to press for the preservation of commerical districts.

    It is an article of faith in these parts that historic preservation is by definition always a social good. The demolition of Penn Station damaged the collective civic psyche so thoroughly that no one can publicly be rational about the result of that demolition–the cherished institution of enforced preservation, supported by a robust advocacy community dedicated to advancing enforced preservation in the face of uncertainty about the impacts of increased costs on the economic viability of preserved areas over time.

    And while we are at this, since the 1%/99% paradigm has succeeded in capturing public policy debates, the corollary article of faith that landmarking increases value needs to be examined in these 1/99% terms. One person’s increase in value is another’s barrier to entry. If it is true that landmarking increases value, we should be very careful of creating socio-economic homogenous zones enabled by enforced preservation regulations. Preservation turns housing that may have once been affordable into a luxury good. Affordable housing and historic preservation may not co-exist well. For a municipal entity whose budget has been in deficit reduction mode for several years now, it seems to be a wise exercise to analyze the reduction in previously affordable housing rendered unaffordable by preservation and the increase in subsidy costs to produce afforable units elsewhere. The city’s economy and budget comprise a closed system to an extent. Enforced landmarking, egged on by a professional advocacy community, unbalanced by effective public modulation of its excesses and a complete failure to examine the impact of excessive regulation on other parts of this closed system, will lead to much larger failures that reveal themselves later.

    This district is a harbinger of damage to come from unchecked mandatory historic preservation, unbalanced by other more important public policy concerns.

  • Andrew Porter

    Yes, the unwarranted additional costs of Landmarking have turned Brooklyn Heights and other Landmarked areas into the horrible slums they are now…

  • cassandra

    The single existing study of six Brooklyn historic districts could only demonstrate quantitatively that enforced preservation did not reduce property values–there are no studies that demonstrate a correlation between enforced preservation and increased values. Property values depend on a number of factors, mostly the local and national economic cycles. For many years after the Brooklyn Heights district designation was effected, property values declined significantly. Since then, Brooklyn Heights property values have benefited from any number of external conditions. To view enforced preservation as the cause of any local success ignores the facts and urban economic theory.

    The relation is not between enforced preservation and “slums”, and articulating the issue in such manner misses the real issues. Without knowing more about the relationship between enforced preservation of primarily commercial districts and their continuing economic viability, we do not know, as the preservation advocates continue to blithely assert, that enforced preservation will benefit the buildings in this district. We do not know that enforced preservation will not harm these buildings. Many familiar with real estate economics, however, suspect that it will reduce the future viability of these buildings.

    REBNY has created a model that can be used to assess the impact of enforced preservation over time. It is necessary to measure the incremental costs of enforced preservation on the operating statements of commercial buildings functioning in an environment of a heavy regulatory burden. The incremental costs are more than the filing costs. There is the ripple effect on renovation projects’ schedule and cost due to an additional layer of bureaucracy (on top of a complex regulatory bureaucracy). And there is the additional costs of materials and finishes and cosmetic design features required by historical accuracy, the manufacture of which is incrementally more expensive, which further adds to the time/cost spiral.

    Depending on a variety of factors–the existing regulatory burden, the local and national economies, the attractiveness of this edge of Downtown Brooklyn as a commercial or a residential area, and the buildings’ actual operation and maintenance costs–we will eventually see if these buildings can command the rents as late 19th century and early 20th century commercial buildings in a 21st century world or if they can convert to residential use in a regulatory environment that has seen the increasing imposition of significant environmental sustainability regulations on top of an already complex regulatory structure.

    This is far more complex than most are willing to acknowledge. So long as the actual costs of enforced preservation are borne by private “others” and not the government, funded by taxpayer money, there is no incentive for the government to be careful when imposing regulations. The economic and social harm, which include opportunities that are not able to be taken, may not even reveal themselves clearly and when they do it will be on another administration’s watch.

  • epc

    REBNY’s members failure to capitalize on the opportunity to take advantage of the placement of their buildings prior to landmarking is their own damn fault. Their utter inability to extract market value for the properties prior to landmarking is neither a government nor market failure, but a failure of imagination and utter terror at assuming any risk.

    There is an obvious cost to landmarking that the city absorbs in the loss of potential tax revenues for any redevelopment, but the failure to redevelop these building sober the past several decades either demonstrated to the city your unwillingness to invest in downtown Brooklyn, or their unworthiness for further investment.

    In either case, REBNY has had decades to develo these proposes, and failed to do so, to whine now about landmarking is like whining that an option you’ve failed to pursue for years has been closed off to you.

    And: it’s a done deed. Where were you Cassandra in the months leading up to this?

  • epc

    c/sober/over

    I blame my iPad.

  • Cassandra

    Commercial real estate ownership and businesses are not eleemosynary endeavors. As actual profit seekers, owners will invest when the return on investment is sufficiently positive, which in turn depends on host of factors. The most significant are the economy, the cost of capital and the cost of operation, and future income. To the extent the existing regulations have made the kind of investment required for “development”, at expected rents, not feasible, government is responsible for those. Adding insult to injury in the form of enforced preservation is completely the responsibility of government, though it has been aided and abetted by the professional preservation advocates.

    Someone put this post up, I assume, because this district raises some very important issues that will not go away. The discussion about these issues should not be considered whining, but an honest public policy conversation about how an enforced preservation program should conceive of its role as the city continues to mature and real issues related to public health, safety and welfare arise, creating conflict with aethethic concerns of folks mistakenly bent on preservation as an absolute social good.

    As for Cassandra, she has been speaking the truth since this misguided proposal surfaced, but to no avail.

  • David on Middagh

    “Not eleemosynary endeavors”! You don’t say. Yet might it be possible that the panopticon of public opinion, in its fascist percipience, was even partly perspicacious to proffer policy pertaining to the preservation of a plot of preeminent rectangular prisms?

  • Cassandra

    No.

  • David on Middagh

    Nattering nabobs of negativism!