Busy as a Beaver

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By Susan Kathryn Hefti
Special to The Clyde Fitch Report
[email protected]

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The American beaver, also known as Castor canadensis, is one of the most industrious animals on the planet. In fact, the innate building and development practices of this furry mammal have proven so prolific that the beaver’s extensive portfolio could even make master builder Robert Moses look like a slacker.

But the beaver’s civic celebrity here — in addition to being the official animal of New York State, the furry fellow waves proudly from both the official New York City flag and its seal — is attributable to much more than just its Type A personality. For it was the beaver’s prized pelt that almost exclusively powered Gotham’s early economic development.

After the insatiable demand of the fur trade had driven these wily herbivores to the brink of extinction in Europe, the 17th century discovery of a relatively untapped resource — the robust beaver population in North America — set the wheels in motion for the Dutch trading post known as New Amsterdam. So essential was the beaver to its fledgling economy that when city leaders selected the design for New Amsterdam’s first coats-of-arms in 1630, Castor canadensis was featured in a leading role.

Hands down, the beaver was the single most important commodity that put our city on the map. And 400 years later, much of the world still associates the beaver’s industrious nature and the opportunities it creates for itself with the city that never sleeps.

But surveying our current urban landscape — which has taken the notion of a long winter’s nap to new levels — begs the question as to whether we are really doing all we can to maximize New York City’s economic recovery and stimulate job growth throughout all five boroughs. Now, granted, the beaver did set the bar pretty high for Gotham. But there can be little doubt we’ve barely scratched the surface of the resources that can help get our city back up and running again.

On Jan. 1, Albany set the stage for a meaningful economic recovery when its newly fortified version of the New York State Historic Preservation Tax Credit finally went into effect. The law, which will sunset on Dec. 31, 2014, provides enhanced tax credits for restoration work done on historic commercial properties (e.g., apartment buildings) and historic residential properties (owner-occupied structures) with an eye to stimulating the state’s flagging economy.

The way the program works is that for commercial properties, the state’s historic tax credit must be used in conjunction with the Federal Historic Preservation Tax Incentives program. Once an owner qualifies for that program (the Feds provide a 20% tax credit for restoration work), he or she is automatically qualified for the state’s program (which now provides an additional 20% tax credit, up from the previous 6%).

But eligibility for the state tax credit comes with a significant caveat: a qualifying historic commercial property must be located in a “distressed” area — where residents are at or below 100% of the state’s median family income — as defined by census tracking. Clearing those hurdles, commercial property owners can receive a 20% credit of restoration expenses up to $5 million (a leap from the previous $100,000 cap).

Residential properties must also be located in “distressed” areas in order to qualify for the state historic tax credit (a 20% credit for up to $50,000 in restoration costs, doubling the previous cap of $25,000). In addition to being owner-occupied, to qualify for the credit, the structure must also be individually listed on — or contribute to a historic district listed on — the State or National Register of Historic Places.

Lauding the measure, Governor David A. Paterson said:

“The rehabilitation tax credit program provides incentives to developers, municipalities, businesses and residents to make investments in distressed areas by rehabilitating historic properties that are listed on the State and National Registers of Historic Places.”

The Governor had signed the legislation this past July, but only after certain — more progressive — provisions had already been stripped from the bill. For example, in the earlier bill, eligibility was not tied directly to income as it is now.

And so, while the measure does expand the state’s tax credit program, it is what was snipped from the bill that has some calling for Albany to go back to the drawing board and, this time, come out with a historic tax credit that acts more like the beaver and less like the bear.

After initially calling it “a step in the right direction,” Simeon Bankoff, executive director of the Historic Districts Council, went on to share his concerns about the limitations of the newly expanded tax credit during a recent phone interview. Bankoff worried aloud that because eligibility for the historic tax credit has been directly tied to income, it may not have the same robust economic impact generated by other states that have enacted such incentives.

In order to truly stimulate the economy, Bankoff told me, the New York State Legislature should revisit the eligibility criteria and “divorce it from the income requirement.” If the state tax credit for work done on historic restoration were available to all New Yorkers, and not just those in distressed areas, Bankoff said, the program would be far more widely utilized — providing a vigorous jump start for New York City’s economy.

And while he’s more than relieved to finally see the bill take effect, even Daniel Mackay, director of public policy for the Preservation League of New York State (PLNYS), who worked assiduously for years to get the tax credit through the Legislature, explained to me that with tax revenues dipping along the same trajectory as the economy, advocates of the measure “had to make some trade-offs.” Nonetheless, Mackay said having the state’s newly expanded tax credit to go into effect during the downturn is actually perfect timing because the program creates an incentive to invest locally.

Yet it is specifically because the historic tax credit “has the ability to drive community reinvestment” and create jobs, Mackay quickly added, that the PLNYS is wasting no time in gearing up for the next big push. Like the HDC’s Bankoff, Mackay would also like to see some of the provisions that had been eliminated from the original bill quickly enacted. Describing the potential impact of a historic tax credit, Mackay said, “instead of being shovel-ready, it’s rehab-ready.”

And just like the little beaver that could, confidence that historic tax credits can help get the economy rolling again is palpable when talking with the National Trust for Historic Preservation (NTHP) in Washington, D.C. In a phone interview, Pat Lally, the NTHP’s director of Congressional affairs, said that unemployment is more significantly eased as a result of historic restoration projects than “when you demolish a building and build anew.” Because historic restoration tends to be “more highly skilled and more labor intensive,” Lally said, it produces more jobs. And when it comes to historic tax credits, Lally added, whether federal, state or local, “it’s all about jobs, jobs, jobs, jobs.”

Active in historic restoration for many years, Raymond Pepi, president of Building Conservation Associates, a private preservation consulting firm, knows a thing or two about the impact of historic tax credits. Reached on his cell phone, Pepi said he has seen firsthand how these programs can heat up plans that have been sitting on ice. And by getting a restoration project off the ground, historic tax credits, he said, are like “an economic engine” creating jobs right here in Gotham.

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Currently restoring the New York Hall of Science in Flushing Meadows Park, Pepi added that historic tax credits also promote sustainable development by encouraging developers to maximize “resources that already exist — instead of chopping down a new tree, you are using the ones that were already chopped down.” Pepi also noted: “preservationists have been in the sustainable development business for a long time…before it was ever popular.”

Ken Fisher, an attorney specializing in land use and government relations with the law firm of Cozen O’Connor, agrees that “the restoration of historic building stock is a part of sustainable development.” Fisher told me that because “the construction industry is a leading indicator of how difficult it’s going to be to recover” from the current economic downturn, incentives that help stimulate local investment are now an imperative.

It’s that imperative, coupled with the gap in historic properties captured by the state tax credit (again, as eligibility for the credit is limited by income), which is leading some to look elsewhere. One way to make the tax credit available to all New Yorkers would be for the New York City Council to legislate such an incentive. The HDC’s Bankoff said he’d be all for a local historic tax credit. Since “the government has decided that it’s a public good to preserve historic structures,” he said, “the government should put its money where its mouth is.”

While serving as a Council member from Brooklyn in the 1990s, Fisher introduced just such a bill, hoping to create a local historic tax credit available citywide. But the bean counters balked and the bill never saw the light of day. Fisher told me the same arguments he advanced decades ago are still relevant and, perhaps, even more so today: With the stalled economy, a local historic tax credit would help loosen up an industry that has suddenly found easy financing to be a thing of the past.

The PLNYS’s Mackay also believes that a local historic tax credit could help energize New York City’s economy. And because, in 1996, the Legislature “passed a law allowing a local taxing authority to abate tax increases on historic properties,” Mackay said such a measure could be fairly straightforward. But since that law requires that qualifying properties must already be locally designated landmarks — and only 3% of New York City’s structures have yet been so designated — he suggested that if a local tax credit could be enacted, perhaps the criteria should be whether the subject property is eligible for the State or National Register of Historic Places.

Responding by email to a related inquiry, the New York State Office of Parks, Recreation and Historic Preservation (SHPO) stated that because of various fires, demolitions and alterations over the last 40 years, SHPO does not have an exact number, but approximates that “30,000 buildings in the five boroughs are listed on the National Register of Historic Places.” In the absence of a citywide building survey, there is no telling how many historic structures might be eligible but not yet listed.

Causing quite a stir, a few years ago an American beaver was spotted in New York City for the very first time in 200 years. Interpreting the sighting as a harbinger that the Bronx River, along whose banks the beaver had already built its lodge, was making a comeback, beaver fans quickly dubbed the busy fellow Jose, after Congressman Jose E. Serrano who has been widely credited with helping to restore the waterway.

Following one of the few good leads to come out of Albany in a long time (albeit not a perfect one), if the New York City Council were to create a local historic tax credit, it wouldn’t take another beaver-sighting to know that such a measure would herald a much-needed boost to the economy and get a whole lot of New Yorkers busy again.

Please send preservation news tips and info to: [email protected].

Susan Kathryn Hefti is a playwright and active member of the Dramatists Guild of America. Her history play, A Defiant Soul, has been performed throughout the New York City school system as a teaching workshop in early American history. Hefti is also the author and curator of the New York City history exhibit “The Flushing Remonstrance: Who Shall Plead For Us?” Shortly after its 2009 opening, this celebrated exhibit was quickly booked at venues nationwide through the summer of 2010. Her new play, American Dames (or…Waiting for Dolley), introduces us to a group of Upper East Side women confronting their relevance in the ever-changing cultural landscape known as 21st century America. Hefti has been active in historic preservation pretty much her whole life.

The Preservation Diaries does not necessarily represent the views of The Clyde Fitch Report.

But in the build-up to World War II, the economy quickly contracted in fear, and the hopeful wager that had been placed on the Hippodrome property failed to yield the anticipated winnings. Gambling on a dazzling short-term payoff quickly gave way to the humble reality that razing a theater once described by Streetscapes author Christopher Gray as “one of the most unusual theatrical venues ever built,” produced nothing more than a tedious parade of blueprints, drawings, plans and ideas about what to do with the idle property.

  • Tabetha Garman

    A friend of mine and I were talking about environmentalism the other day, and that conversation immediately came to mind after reading Ms. Hefti’s delightful article. When most people hear the phrase “preserving the environment,” they automatically think of field, stream, hill, dale and whatnot. Untamed wilderness, however, is not an inherent part of the definition of environment-the cities and towns we have built across the nation have created their own environment, complete with eco-systems and wildlife that have grown up within our towering forests of concrete. Rather than limiting ourselves to preserving our wild-environs, we need to start working toward a preserving the environment of our man-made creations as well. The spotting of Jose the Beaver is a great example of this-native creatures returning to live next to humans in our nation’s greatest city.
    Just as wildlife can survive next-door to humans; so too our historic buildings can be preserved and protected alongside newer structures. I love the idea of extending the tax cuts/credits, though it is sad to think one must woo contractors with further financial incentives to do something that has proven to be so practical and beneficial.
    Keep up the marvelous articles!

  • Amy Wittorff

    Here, here! It’s about time preservationists stop playing the part of a grateful supplicant and get tough with these politicians. The restoration of historic neighborhoods & structures has been shown, time and again, to stabilize real estate values – and that’s just what NYC needs to weather this economic rough patch. Plus, with Wall Street’s fortunes frozen right now (timid bonuses means less revenue for NYC’s coffers), the city is going to be relying more and more on tourism and the TV & Film industry to help pay its bills. The more historically distinct blocks & backdrops NYC has to offer, the more cash it will reap from these two vibrant industries. Enacting a local historic tax credit for restoration work is a no-brainer: the percentage of property taxes waved by the city will be more than off-set by the value added through more jobs; more tourism and more Law & Order episodes being filmed on Gotham’s gritty streets instead of being shot on a shiny new Hollywood backlot.

    The long term benefits are clear: The NYC Council should quickly craft its own historic tax credit and get it on a fast track today!

  • Pete Betti

    Once again, Ms. Hefti has opened up another important insight into the world of preservation. Expanding the historic preservation tax credit makes good sense environmentally, while providing much needed jobs to help stimulate the local economy and will help to pull us out of the current downturn, all while preserving structures that provide us with context about our past. Let’s hope those in Albany will expand the tax credit by eliminating the distressed area/low income provision, and those at City Hall will support that, and consider a local tax credit as well.

  • Marcia

    Wow! When I think about how many jobs could be created if owners were given sufficient incentive to restore their historic properties, it’s mind-boggling. As it stands, right now the city does nothing for historic property owners except restrict the use of their property. A local historic tax credit would turn the burden of owning a historic property into a benefit overnight, inspiring many to finally contract for the rehab work they had always thought would be too daunting.

    There’s no good reason to let a talented and fertile historic restoration industry wait in the wings while unwanted demolition sites bog down residential and commercial neighborhoods throughout the city. Instead of tearing down our great old buildings in a stalled attempt at building to the sky, with a local historic tax credit, skilled labor could get very busy rehabing the city’s irreplaceable historic inventory. Getting a local historic restoration tax credit through the city council should be high on its agenda as it would provide an incentive to get thousands of New Yorkers back to work while dusting off one of the greatest collections of 19th century structures in the world!

  • Kelly Ann

    The NYC Council needs to find the strength and leadership to finally stand up to Mayor Bloomerg’s Demo or Die attitude before it’s all too late. The number of stalled sites; abandoned and foreclosed projects; and half-built skycrapers gone bust racked-up over the last few years – as a direct result of the Mayor’s short-sighted and unrelenting (even in the face of an obviously overblown housing bubble) gung-ho fast-track tear-’em-down and build-’em-up all over again strategy – should be more than enough reason for NYC Council leaders to realize the time has come to finally ease up on the wrecking ball and point developers toward in a new and different path.

    Smartgrowth has to include a package of incentives – carrots if you will – to give developers (who are not in the business of looking out for the long-term) a real good reason to restore rather than simply raze. NYC Council members (who are supposed to be in the business of looking out for the long-term) have an exciting opportunity here to help create jobs and stimulate the local economy while proving themselves to be good stewards of NYC’s heritage; its environment and its future. A local historic tax credit is a real good place for the NYC Council to start.

    Rock on, dear Diraies!

  • Jim Gerson

    Ms. Hefti has hit the preservation nail on the head. Financial incentives are the key (and perhaps the only) way to drive new preservation efforts in an era of economic contraction. We need it and it’s the right thing to do.

  • Brigid Rumpf

    Ms. Hefti once again snaps my mind into connecting the dots or seeing the highlights on the road map…. she’s the preservationist compass…what we need is for Albany to expand the tax credit — low income and distressed area restrictions must go…this will stimulate jobs and get some cash flowing on Main Street.

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  • Meg Cullin

    Ms. Hefti’s current article is enlightening in many ways- a glimpse into the multi-faceted state and federal tax credit initiatives available for both commercial and residential qualifiers as well as provocation to become actively engaged in political action to get the desired results of sensible historic preservation combined with the needed benefits of economic stimulus and job growth for New York City. Ms. Hefti urges us then to support a demand for local historic tax credit to achieve these ends. In her previous column, Ms. Hefti brings an awareness for the need to identify all buildings of historic significance (how convenient that would be in light of a local historic tax credit for preservation projects) and quotes Adrian Fine, director of the National Trust for Historic Preservation’s Center for State and Local policy as saying that the community at large needs to be proactive and encourage elected officials to use this (economic) “cooling off period” to craft developmental practices that will better serve the continuity of neighborhoods as well as the long-term economic resources of cities. With all this depth of information presented by Ms. Hefti in hand, let’s be like our industrious beaver friend and get things on the move.

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