Fifth

Preservation in New York City is an exceptionally important and equally fascinating topic. I had the opportunity to sit down with Gregory Dietrich, Principal of Gregory Dietrich Preservation Consulting, to discuss some hot button issues and learn more about his clients and services.

 

Q: You opened shop in 2009, we talk a lot about the velocity of the market in terms of sales, tell me what’s changed as far as preservation and the preservationist community in just the last 5 years?

A: Coming out of the recession, there has certainly been more activity in terms of re-using historic buildings. This uptick in building rehabilitations has translated into more applications for historic tax credits that in many instances have had the capacity to make or break a project. In addition to facilitating historic tax credit applications, I assist property owners and architects with historic tax credit feasibility studies, NYC Landmarks Preservation Commission approvals, historic building analyses, and various types of independent studies, all of which have been on the rise with my consulting practice.

 

Q: Tell me your impression of the Domino Sugar Refinery redevelopment; it’s such a polarizing project, what do you think the impact will be on the community? What’s your take on the rezoning efforts throughout Williamsburg?

A: I worked on a community-sponsored review of the environmental impact statement that had been commissioned by the original development group affiliated with Lehman Brothers. The current redevelopment scenario that Walentas (Two Trees Management) is proposing is certainly more palatable to the community than the previous proposal, making it a win-win for the stakeholders. However, there’s a lot more to the complex beyond an 1880’s factory building and an iconic sign that reflects its 130-year history, so the loss of its other historic buildings from a preservation perspective is bittersweet.

Williamsburg is interesting because a lot of preservationists were wringing their hands when Bloomberg upzoned the area. In fact, one tends to think of Miami-on-the-East-River with respect to the developments that have occurred there since the upzoning. Yet, preservation has actually happened in spite of the administration’s initiatives. One case in point is the Austin, Nichols and Company Warehouse, which was designed by the architect of the Woolworth Building, Cass Gilbert. LPC designated the building but the owner of the building, who had the ear of the local City Council representative, opposed the designation and it was rejected when it came to a vote by the council. Shortly thereafter, an enormous rooftop addition was proposed that would have compromised the building’s design. But ultimately it did not happen and the property was sold to a more sensitive developer who took advantage of the historic tax credit program, resulting in a stunning waterfront rehabilitation. Another success story is the Williamsburg Savings Bank on Broadway which has just been rehabilitated into a signature Beaux-Arts event space.

 

Q: Preservation is an interesting discussion, because beyond the real estate, we can easily include the preservation of both communities and culture. Does the word “gentrification” almost seem too broad? Do we need new words to describe the good kind and the bad kind?

A: Gentrification at its core is an economic trend that is a function of demand and not a community’s designation as a historic district. Historic preservation is about preserving neighborhood character, which has appeal to all socio-economic levels which is why you see so many New Yorkers advocate for protection of their neighborhoods. We now have a mayor that is very focused on affordable housing and that is certainly a priority. But it is not a priority at the expense of losing the city’s distinct sense of place, especially when the preservation of affordable housing and historic buildings are not mutually exclusive objectives.

 

Q: Let’s discuss adaptive re-use and historic tax credit incentives. The explanation on your website got the wheels turning.

A: The program is an initiative driven by the federal government to encourage the rehabilitation of income-producing historic properties. They do this through what is essentially a 20% after-tax credit related to all hard and soft costs. That includes architecture, engineering, consulting fees such as my services, construction materials, and all types of labor related to the project which fall under the category of qualified rehabilitative expenses. So when you’re talking about multi-million dollar projects, it is a pretty big incentive. As far as the criteria, the property has to eventually be listed on the National Register of Historic Places, either as an individual landmark or as a contributing resource to a historic district. The federal government also allows for non-profit institutions to establish for-profit entities in order to claim the tax credit. In some instances, developers will sell the tax credit to investors that need to reduce their tax liability. In any given year, credits can be sold for 99 cents on the dollar or even more, making it a great income generator for equity on a project.

 

Q: Mitchell Moss, a professor of urban policy and planning at New York University, has said, “Some protected areas, like the proposed South Village extension, are of questionable historical identity. On the other hand, in many protected areas, landmarking has not been an impediment to development. Designation hasn’t stopped development in NoHo or West Chelsea. In many areas, landmarking has encouraged intelligent development. Dumbo is one of the great successes of landmarking.” What’s your take on the seemingly endless debate about whether a landmark designation hurts real estate values?

A: Interesting that Moss would question the historical identity of the South Village, the more and more I learn about its history, the more and more I understand what a truly significant cultural force it has had on the country-at-large with respect to the arts and immigration. To me, it’s really ground zero of the city’s melting pot and Bohemian counter culture; it’s probably one of the culturally richest neighborhoods in the entire city. So no, I do not question the significance of the South Village.

As to the claim about designation diminishing real estate values, there are just so many examples beyond DUMBO, whether you’re looking at the Meatpacking District, Ladies’ Mile, or even Union Square, these neighborhoods are attractive not only for older generations, but also for young people who want to work and live in them. Recently DUMBO was cited as having the lowest office vacancy rate in the entire city and the Ladies’ Mile Historic District has emerged as a thriving market for commercial office rentals, outpacing average asking rents for the borough-at-large, while retail rents in the district have begun to escalate on par with other thriving commercial areas.Rehabilitations of the O’Neill Building and The Cammeyer (to name a few) are glowing success stories of Ladies’ Mile, and walking in these neighborhoods, you can’t help but feel uplifted by their distinct sense of place and vitality.

 

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Gregory Dietrich
Principal – Gregory Dietrich Preservation Consulting