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A Fable for Our Time

A friend of mine recently returned home from California after two months traveling in France and England. As he unpacked his bags and settled back into his house, he sorted the foreign coins and bills accumulated while traveling and unspent at duty-free.  Looking ahead to future travel, he organized the currency into separate packets; when he was done, he had an unusual coin left over.  Not sure what it was, he sent me a photo, asking if might be legal tender and if so, where.

It is in fact a very rare and interesting coin that was once legal tender in a place many of us call the People’s Republic of New York.  They could be inserted into analog machines at the entrances to the most expansive public transit system in the world as payment of the fare; once in the system one could ride as far as one wanted for a flat fare.  They could also be spent, at full value, to buy snacks and sodas in bodegas and delis out in parts of Brooklyn like Bedford-Stuyvesant before they were gentrified.  I know this because, one day in architecture school and short of cash, I paid for lunch with one.

Artifacts like old coins tell us about worlds past, and this is no exception.  The People’s Republic of New York existed de facto as a city-state that enjoyed a unique status in the US as the center of culture, art, innovation, fashion, finance, commerce, architecture, and industry.  While the quality of its leaders varied, it was generally well-regarded as an enlightened progressive democracy that administered, in addition to its world-class transit system, an extensive network of public hospitals and clinics, the largest public housing program in the nation, and one of the oldest and largest public park systems in the country, free and accessible to all.  The Republic was also committed to education, a legacy of both the tremendous influx of Jewish immigrants from Eastern Europe in the late 19th Century, who valued education above all, and the reform movements of the early 20th century; the result was the creation of the largest public school system in the U.S. that produced generations of progressive leaders, successful professionals, acclaimed scientists, and world-renowned business  people, and a municipal university best known for producing more Nobel laureates than the Ivy League, MIT, and Stanford combined.  The Republic was also home to the largest concentration of multimillionaires in the U.S., who consistently supported progressive social and political movements out of a sense of obligation to the common good.  In spite of its tremendous concentration of wealthy elites, the Republic also boasted the most economically and ethnically diverse population in the nation: people of all origins, races, and economic achievement lived together harmoniously in close quarters.  The Republic’s commitment to liberal values was such that reactionary aspirants to the Presidency of the U.S. sneered at its “New York Values” as a way to achieve acceptance among like-minded reactionaries across the nation; the residents of the Republic were taken aback, knowing as they did the things they valued most are education, hard work, success, and tolerance.

The decline of the Republic began in 1980 with the ascension of Ronald Reagan to the Presidency of the U.S., who declared government the source of all that ails society, installed hypercapitalism as the official state religion, and whose minions began the looting of the U.S. and the transfer of its wealth to gated communities in Orange County, Santa Barbara, Montecito and Silicon Valley in California; selected neighborhoods in Houston and Dallas, Texas; a family in Wichita, Kansas; all of whose  denizens acquired ever more expensive apartments on the Upper East Side  of Manhattan and bought their way  into the formerly progressive elites.  Despite glimmers of hope in the intervening years, the decline was irreversible by 2009, when the elites of the Republic sold the mayoralty to a local billionaire, who retired in 2013 and handed the office, reduced substantially in power, to a local populist as a sop to the masses.  In early January of this year, the Republic formally became known as Oligarkistan and is a province of Russia administered from Washington DC.

Today, the Republic’s public hospital network and housing system are in various stages of distress.  Wealthy donors support the parks lavishly, but selectively, focusing their efforts and cash on the park across the street from their apartments.  The transit system remains, although when it will be privatized, with the inevitable service cuts and distance fares imposed in the name of hypercapitalism, is anybody’s guess.  The coins themselves went out of circulation in the early 2000s when the information technology/data harvesting oligarchs took control of the monetary system.

My advice to my friend was to hang onto his coin as a symbol of a lost society.  It will almost certainly increase in value.

Make it Even Bigger

With yesterday’s announcement, Governor Cuomo brought a needed sense of urgency to the redevelopment of the Farley Post Office and Penn Station in Manhattan, a now nearly twenty year saga most notable for its total lack of progress.

It’s a great start, and an ambitious plan, but not ambitious enough. Here’s what should be on the table.

Evict Madison Square Garden. Back in 2013, the City Council wisely declined to grant MSG management a special permit to operate in perpetuity, and instead gave another ten years. The clock is ticking, and now it’s time for the Council to close ranks, dig in, and make it clear that MSG has to find another site, build it out, and vacate. No extensions.

Tear the Garden Down. It’s old, it’s outmoded, and the fact that a even Newark has a better-designed arena should be a regional embarrassment. It also sits on top of the busiest, most important train station in the country. No half measures here, no insertion of a glazed entry in place of the theater. Tear it all down and build a new, state-of-the art railway station that will serve the region for the next century or so.

Dump Moynihan Station. It’s a seductive repurposing of a building, a relic of 1970s design thinking that appeals only to the preservation/adaptive reuse crowd. For the rest of us, it’s a poorly conceived plan that would never be quite right. Not even Amtrak wanted any part of this one; even they didn’t want their waiting room a block away from the train platforms. If the project had been done twenty years or so ago, when first proposed, it would have been here already and we would have seen just how flawed the concept it. By living with it.

Move Madison Square Garden. Here’s a radical proposal: tear down the west half (or more) of the Farley Post Office and replace it with a new, up-to-date Madison Square Garden with all the amenities and features that a 21st century arena needs. Preserve the magnificent portico and principal façade on Eight Avenue and incorporate it into the new complex (rail and entertainment) in a creative way befitting the times we live in. As for the west half, yes, McKim, Mead & White designed it, but it’s a loading dock for heaven’s sake. Let’s preserve what’s worth saving and remake the rest in our contemporary image.

OK, how do we pay for all this? Fair question. The knee-jerk reaction these days seems to be to get a private sector developer onboard, give them a piece of the action, in this case the retail space, and turn them loose. The problem is, developers, like all business people, have their own agendas, which are usually not aligned with anything resembling the public good. The other problem is that this approach didn’t work with Related and Vornado in control of the Farley Post Office project, which is why they are out and a new RFP is coming. The alternative is Federal money, and lots of it; there’s a very strong argument that this is a national growth driver that deserves Federal money. Add to that a massive state bond financing, and a requirement that the private developer selected to build all this should be able to finance whatever piece of the action it gets upfront, and we should get there. You can read the NY Times article here http://nyti.ms/1THfP90.

Time to think really, really big. Maybe even huge.

Tunnel Rats

Yesterday, none other than the New York Times editorial board got on the train to urge the construction of new rail tunnels under the Hudson to alleviate the strain on the existing tunnels, which are around 100 years old and in dire need of replacement, or augmentation, or both. It’s about time.

Readers of Naked Urbanism already know the back story: how Chris Christie torpedoed the ARC project back in 2010 that would have addressed this now urgent situation. No matter what he said at the time, he was angling to be President, and used this issue to vault onto the national stage, playing as he was to the national Republican Party to burnish his credentials as a slash-and-burn rock ribbed conservative, the needs of his constituents be damned.

Clearly, the New York metro area contributes much more to the national economy than its size would suggest, and Republican politicians across the country would ever admit. But it’s true. We have more high-value, high income jobs here per capita than anywhere else, save perhaps the Bay Area/Silicon Valley, and I would suggest that our distribution is more diverse than theirs. So this is arguably both a local and a Federal matter.

Now that Christie’s performance to date in the Republican circus makes clear that his Presidential aspirations were far-fetched at best, and delusional at worst, it’s time to get back to reality and face the music. But how to pay for this?

Let’s start with how the ARC, a $10 billion project, was to be financed. The Federal government committed to 51% of the cost. The balance was to come from New Jersey Transit, the state of New Jersey (until Christie pulled the plug), and the Port Authority.

So if the Feds were ready to step up for 51% a few years back, there is no obvious reason why they wouldn’t do at least that much again. The revised estimate is now $20 billion, so there should be $10 billion right there. New Jersey will benefit tremendously from this project once it is done, and so should step up, too, for big money: According to a study done by the Regional Plan Association for the ARC, New Jersey can expect to see another $375 million in new tax revenue. If New Jersey contributed even a portion of that windfall, say $200 million, which would be recurring income, mind you, that would cover the debt service on nearly $4 billion in public finance at 5%. That would get us to $14 billion. New Jersey Transit should also take a piece, as should New York State, since New York will benefit from is a precedent to financing projects like this. At least on the back of the envelope, this job can be paid for, and we should start it immediately.

Chris Christie ceded the leadership on this one five years ago as he prepared for his quixotic quest on the backs of his constituents. Senators Menendez and Booker from New Jersey seem to absent on this one, Menendez possibly distracted by his indictment last April, and Booker likely wearing out his thumbs tweeting. So Chuck Schumer has rightly taken the lead here; the spectacle of spanking a deserving Republican a mere side benefit to this important project.

Christie on the Hudson?

Ignore his fanboy antics in fat-cat NFL skyboxes and blowing $12MM to $25MM of public money to run a special election three weeks before his own re-election to keep Cory Booker off the same ballot. Even set aside Bridgegate for the moment.

If not for Chris Christie, we would be five years into the construction of new rail tunnels under the Hudson River today. And the region, especially New Jersey, would be better off.

Earlier this week, equipment problems in the Hudson River tunnels caused severe disruptions of service and extensive delays for New Jersey commuters trying to get to their jobs in Manhattan. The delays were so bad that Anthony Foxx, the U. S. Secretary of Transportation, contacted Andrew Cuomo and Chris Christie, the governors of New York and New Jersey respectively, to stress the urgency of building new tunnel connections between Manhattan and New Jersey (also known as the U.S. mainland).

Problem is Christie torpedoed this project back in 2010 when it was called the Access to the Region’s Core (ARC). At the time, he loudly proclaimed his fiscal responsibility and determination not to stick the citizens of New Jersey with what he called “an open ended letter of credit” for cost overruns.  Never mind that the Government Accounting Office found that claim to be grossly incorrect.

It was just the thing to do to attract the favorable attention of the national Republican Party, also known as the “let’s shrink government at all costs, wreck the country in the name of ideological purity, and line our donors’ pockets Party”, and leap onto the national stage as a leading contender for President in 2016.

When Christie scuttled the ARC, he deprived New Jersey homeowners of an estimated $18 billion (yes, BILLION) in property value appreciation. That is wealth that would have also translated into an estimated $375 million in new municipal New Jersey tax revenues annually, according to a study done by the Regional Plan Association. Travel times would have been drastically shortened for at least half of those who commute from New Jersey to New York by rail. The project would also have created relatively long-term construction jobs, most of which would likely have been union jobs, known for solid wages and good benefits. Making it easier to get to New York would also likely have provided new economic opportunities for New Jersey residents in New York, especially significant since the median wage in New York is 60% (yes, sixty percent) higher in New York than it is in New Jersey.

It’s a lot to give up, unless you’re considering a run for the Presidency and you can trumpet your slash-and-burn approach to governing to the national Republican Party, break out onto the national stage, move several rungs up the ladder of presidential contenders, and get invited to give the keynote speech at the convention (where, incidentally you can mention yourself more than 7 times as often as the real nominee, whose name you don’t even utter until more than 16 minutes into your speech).

Add to that the benefits to you as a sitting governor. Take the $4 billion earmarked for the ARC, put it into the state Transportation Trust Fund (nearly insolvent at the time) and skip raising the state tax on gasoline.  If, along the way, you have to reimburse the Federal government $95 million for sunk costs, it’s a small price to pay, with, of course, public money.

Pretty compelling stuff provided that your own ambition comes before the interests of your constituents.

All that said ARC (now called Gateway) is back in the news. If anything, the benefits are greater than they were, and it is a must-do project for the region. While there are reasonable discussions to be had about how it should be financed, the sooner we resolve them and get started, the better for all of us.

 

Why I’ll Miss David Letterman

We interrupt our usual program…..

Back in the early 1980s, there was this up-and-coming guy on television named David Letterman; our names, though spelled slightly differently, sound alike.  We also both live and work in New York, and although we’ve never met, I have had a lot of fun with it.

It started in 1981, when I was paged at a supermarket in Malibu (why is a longer story; suffice it to say that she was at the checkout and I was at the magazine rack in the back).  As I sprinted up to the front of the store, I saw that a crowd had formed, gawking and craning their necks for a celebrity sighting.  I stopped, threw out my arms, and exclaimed, “Sorry folks, it’s only me!”

As that guy on television became more popular, the pace picked up.  People started asking me to do stupid pet tricks.   I don’t have a pet.  I’ve always done a lot of business by phone; time and again I would call someone, his assistant would answer, and I’d announce myself as David Lederman calling for whoever.  More often than not, the response was something like, “Yeah, sure”, “Yeah, right,”, “No, it isn’t”, or “Hahaha, this is Jay Leno”.  Someone even hung up on me once, thinking it was a prank call.

From time to time, though, there have been benefits.  I was working as an architect in the 1980s.  When the time came to leave the small firm I was with, my then-boss made an introduction to Richard Meier, who, while not yet the starchitect he is today, was justifiably renowned.  Calling Mr. Meier’s office to make an appointment, I said no more than my name, and I was put immediately through.  When, a week or so later, I arrived for the interview, the receptionist turned bright red.  Clearly she had thought that she was dealing with a famous client; just as clearly, someone had reminded her that she wasn’t to put anyone through.

Then someone decided that I look like Jay Leno; I’ve never seen the resemblance.  At around the same time the requests for Top Ten Lists started. I was always at a loss for words until finally, during the Clinton years, I put one together: Bill Clinton’s favorite songs, including such hits as “Why Don’t We Do It in the Road”, “Love to Love You Baby”, “Bad Girls”, “Love Won’t Let Me Wait” and six other similarly themed tracks.  And sure enough, someone at a party asked me for my Top Ten list. I rattled it off, emptying the room in the process.  Being funny is a lot harder than it looks.

I should have remembered that lesson later on when, starting my own business, I cold called a man in the entertainment business in Las Vegas.  I got him on the line and introduced myself, naturally, as David Lederman calling from New York. Without missing a beat he said, “Tell me a joke.”  And so I did.  The line went dead silent for an uncomfortably long moment.  Just because your friend who works on a trading desk thinks a joke is funny doesn’t mean that normal people will.

No one has asked me for a Top Ten list in years, but I still get asked if I get great tables at hot new restaurants.  I don’t.  I did, though, get bumped up to first class once.  We were flying to the Caribbean, and the lady at the check-in desk was thrilled to be able to tell her husband that she had met David Lederman.  She asked me to autograph something, handed me the first class boarding passes, and away we went.  As the other two couples we were travelling with passed by us on their way to steerage in the back, I got to say, just once, “that’s how I roll”.

At one time in my career I was running a field office in midtown, and Ed, one of my colleagues, was running another one on the Lower East Side.  When he called, weekly or so, I always knew it was him whenever my secretary told me that Paul Schaffer was holding on the line.  She never caught on, to our endless amusement.

New York can also be a very small place, and collisions are inevitable.  I have never actually met Letterman, but it turned out years ago that he and I were seeing the same cardiologist.  I found this out one day when on the phone with my doctor.  He asked for my birthdate; when I asked why he told me that we were both patients and he couldn’t keep us straight.  All I could say was, “I’ll give you a hint.  He had bypass.”

To this day, I can telephone someone, identify myself, and get something like Really?”.  I’ve long ago learned to say, “you’re the first one today.”  And in all these years I must confess that I have only occasionally watched the show.  But I did meet a young man at a party who worked for the show.  Intrigued by the idea of booking me, he thought it would be most entertaining if I could come on and talk about how having the same name ruined my life.  When I told him that it really hadn’t ruined my life, he lost interest and went to freshen up his drink.

Still, I’m going to miss him.

Hollywood Swinging

Yesterday’s New York Times ran a story by Adam Davidson on the Hollywood model of business, touting it as this great new, compelling model of the way work will evolve.  And while I agree with Mr. Davidson that we are in the midst of a hundred year reset, I think there are a lot of shortcomings in the Hollywood model.  First, some historic perspective.

Sorry, Mr.  Davidson, there’s nothing new here.  The entire AEC (Architecture/Engineering/Construction) industry has run this way since before there were movies.

Architecture firms consist of a core of skilled professionals (once upon a time called draftsmen) who are internally flexible in that they are assigned to a specific project, reassigned once their work is done, or let go if there is no next project.  The firms then hire the specialized skills they need from a variety of consulting engineers (mechanical, electrical, structural, acoustic, fire protection, and so on) in order to complete the design and construction contract documents.  Then the construction documents go out to bid to general contractors, or construction managers, who really only provide management and supervision and rarely, if ever, perform the actual work themselves.  That task, really many, many tasks, is left to a variety of trade or subcontractors (plumbing, electrical, air conditioning, structural steel, carpentry, and so on).

Every construction project is, then, a stand-alone enterprise assembled for the purpose of building the building, the bridge, the power plant, the office space, or whatever else.  It comes into being, executes the task at hand, and is then dismantled as the project players move on to the next assignment.  While, unlike the Hollywood model, the project players are more often firms than individuals, everyone is expendable if there isn’t another assignment.  Anyone who has ever worked in the AEC industry has been laid off at least once.  Still, it’s a durable, efficient model, but before we embrace it as the new way to work, some reservations.

  1. Without training, there are no skilled workers. This model works in the AEC industry because schools of architecture and engineering produce educated entry level workers.  Because these professions are licensed by the states, there is a mandatory apprenticeship in the profession, usually three years, before one is considered qualified to sit for the licensing exam.  The unionized construction trades also provide apprenticeship programs as a prerequisite for membership, thus insuring a flow of skilled tradespeople (how the non-union world deals with this is anyone’s guess). Outside the AEC industry, though, corporate America has walked away from the notion of training and mentoring.  Since to be recognized as a skilled person in any field requires a combination of experience, knowledge, and skill, where are these Hollywood model workers going to get the training they need to participate successfully?
  2. Without medical coverage, everyone is at risk. As a Hollywood model worker, you have to fend for yourself when it comes to medical insurance and other benefits.  You will do this by paying the highest possible rates for medical insurance as a small business owner, sole proprietor, or single employee company, thanks to the way the insurance industry penalizes these kinds of workers.  While there are organizations that help freelancers with this by setting up groups, no one has the bargaining  power that large corporations have when it comes to dealing with health insurance companies, so no matter what, you will pay more.  Much more.  At the same time, as a freelancer or Hollywood model worker, you have very limited leverage when it comes to what you can charge your clients or customers.  So you’re stuck in the middle of unreasonably high costs for basic coverage and a cap on what you can make. So you earn less.
  3. The work never stops. Before you think this is a good thing, think again.  As a freelancer or Hollywood modeler, if you don’t work, you don’t earn.  While the cubicle jockeys in corporate America think that freelancing offers income and freedom, any freelancer that with any experience yearns for a couple of steady assignments to take the edge off the uncertainty.  Remember, most peoples’ costs are recurring things, like the mortgage, the rent, health insurance, and so on.  So take your place on the treadmill and spread yourself thin between doing the work you have and landing the next piece of business; it it’s a 50/50 split, you’re losing ground.  And in the meantime, try telling your landlord that your skills are magically re-evaluated by the market frequently.
  4. It’s not for everybody, and not for every skill. So far, the Hollywood, or AEC, model seems to work best with highly educated people who can do very particular things, have some, albeit limited, leverage when it comes to pricing, and either can, or want to be, flexible about the way they work.  If you need a lot of support, as opposed to collaboration, which is a very different thing, to effectively do whatever it is you do, you are unlikely to succeed.

All that said, whether you call it the Hollywood model, the EAC industry, or just plain freelancing, it can be an efficient way to work as long as it works more or less equally well for employer and employee. But beware when corporate America takes this one up as the latest management mantra because it just means they have found another way to screw us all.  Read the NYT article at http://nyti.ms/1bKiRsA

Reflecting on 1 World Trade Center

With Michael Kimmelman weighing in on 1 World Trade Center earlier this week, it’s a good time to reflect on some of the lessons learned.

In the interest of full disclosure, I was an Associate at SOM back in the mid-1980s, where it was my privilege to work with many of the very talented architects and designers who eventually played leading roles in the design and construction of 1 World Trade Center.  Unfortunately, talent and hard work are too often placed in the service of disappointing ends.

While SOM’s execution is superb, Mr. Kimmelman’s overall assessment was too kind.

Even so, when SOM shoved Daniel Libeskind out of the way, and I have no doubt that their fingerprints are all over that one, we were done a great service.  Daniel Libeskind is really in the business of winning architectural competitions, a great business by the way, but not necessarily the same business as actually making the buildings that his renderings conjure up.  As seductive as the renderings may have been, and they were, and as heartfelt his accompanying “Memory Foundations” essay was, and it was the best part of his entire submission, the resulting buildings would have been even more disappointing than what was really built.  The fault, though, really lies in the plan, which was flawed from the beginning.

Before that beginning, there was a far better plan back in 2002, proposed by Beyer Blinder Belle, another well-known and very well regarded New York firm.  BBB’s plan clearly showed that they had reflected on the costly lessons learned from dozens of failed urban development projects since the 1960s.  Unlike the plan that finally took hold at the Trade Center site, BBB discarded many of the now-discredited planning strategies that go back nearly sixty years; more if you count the original sin, which is LeCorbusier’s Voisin Plan for Paris from the 1920s.

Beyer Blinder Belle’s proposal charted a new course.  Streets destroyed for the construction of the original WTC would be restored.  The office space lost would be completely replaced, but in a series of smaller buildings, more appropriately and urbanely scaled.   There was an opportunity for mixed use development, so that people could live, work, dine, drink, meet, greet, take recreation, and enjoy fuller lives all in one neighborhood.  Open spaces would be woven into the new urban fabric, creating a harmonious rhythm of built and open, brick and green.  Many different architects would design individual buildings, creating variety, interest, and excitement.  There would, of course, be a memorial, perhaps more intimate and less bombastic than what is there.  And the economics would be more manageable, the growth more flexible and organic, responding to true market forces, not subvented ones.

The opportunity was there to reimagine urban development and redevelopment, and establish New York in its rightful place as the city where great ideas come from.  You can see at least some of that proposal here http://to.pbs.org/1nHZi6E

The reaction?  A resounding chorus of disdain and derision led by the late Herbert Muschamp, Mr. Kimmelman’s predecessor at the Times, and joined by the mainstream press, even, inexplicably, by Ada Louise Huxtable.

Mr. Muschamp, suffering from what I can only understand as a severe case of cultural inferiority, railed against BBB’s proposal, even going so far as to call it “blah, blah, and blah”, advocating instead a collection of office towers, each designed by a global superstar architect, arrayed as if in a kind of museum of late-career-toppers by the superannuated darlings of the global architectural press.  Mr. Muschamp seemed to believe that by building these things, New York would finally get “good” architecture.  The fact is, New York has lots of talented architects, and plenty of good buildings; while developers may need them to push their wares, New York as a city doesn’t need branded starchitect buildings the way, for example, Milwaukee needed its Calatrava, or China needs just about everything.

Chances are, given George Pataki’s delusions of national office, the Port Authority’s internal machinations, and the power of not only Larry Silverstein but the entire New York real estate business, no other plan stood a chance, and the press went along for the ride. Still, one has to wonder what form the discussion would have taken had Mr. Muschamp and others considered the logic of BBB’s plan, and advocated its more evolved thinking, instead of championing the outmoded ideas that have driven the planning of the Trade Center site.

There’s cause for cautious optimism here.  Mr. Kimmelman has had some success in his advocacy for the relocation of Madison Square Garden, the demolition of the current Garden, and the construction of a world-class new Penn Station.

That’s a project we all can, and should, get behind.

Mid Century Modernism Endangered

For those of you who do not read Architects Newspaper, Pamela Jerome of WASA recently published a thoughtful comment on mid-century modernist curtain walls (AN 9 April 2014), which raises a number of important issues that deserve comment and further study.  You can find Ms. Jerome’s article here:   http://bit.ly/1oOKXUS

In the interest of full disclosure, I have had the pleasure of being a client of Ms. Jerome and her preservation studio on two façade rehabilitation projects, one of which involved a single glazed curtain wall on a mid-century modernist building.

Having successfully redeveloped two major twentieth century commercial buildings, and having tried unsuccessfully on a third, I can attest to the fact that the preservation issues surrounding twentieth century commercial buildings are probably the least understood, and the most arbitrarily reacted to, in all of preservation theory.  What is often lost in the discussion is that these buildings were built by clear-eyed, unsentimental men who saw them as tools in the pursuit of trade, commerce, and wealth, and most definitely not as edifices of any kind.  As a result, these buildings were altered time and again within their useful lives as tastes changed, styles and “looks” went in and out of fashion, neighborhoods and districts evolved, and tenants came and went.  In our commercial society, those cultural issues are just as important as the esthetic issues inevitably associated with any building, and they are very hard to reconcile.  Looking ahead, the challenge that the mid-century modernist commercial buildings face, beyond the important one of the integrity of the curtain wall, is whether they will remain desirable in an era when office tenants, for one, demand the higher ceilings, larger windows, vast column free spaces, and decentralized HVAC and control systems that 21st Century office buildings routinely deliver.

Emery Roth & Sons’ contribution to both architectural practice and our landscape is often underappreciated.  In their time, that firm embodied the hard-nosed pragmatism and drive that are at the core of our New York commercial culture.  The buildings Roth’s office produced were efficient, economical, and executed quickly.  The firm also had a clear grasp of the importance of production, something the profession would do well to rediscover today.  Having worked with an Emery Roth & Sons job captain early in my career, when I was with a small firm struggling to execute a large commission, I can freely say that the grounding I got in that three or four month experience certainly shaped me and has served me well ever since.

Market forces aside, though, mid-century modernism really is a particular moment in time that expresses the world’s desire for rebirth as it emerged from the horrors of World War II.  That optimism is evident in UN Secretariat, as it is in every part of the UN campus.  Lever House, the Seagram Building, and scores of other projects of that time personify it, too.  One of the ways we can see it is in the refusal to accept the state of the art as a limitation.

It is a moment worth understanding and serving as inspiration in our own time.  In that context, the story of Lever House is illuminating.  Having survived the infamous Swanke Hayden Connell “White Paper”, which described it as an undistinguished building underbuilt for the zoning, and proposed its demolition and replacement with an SHC design based on an old Wurtlitzer jukebox, it was landmarked.  Around that time, when I was a young associate at SOM, the firm received an AIA award for the building.  In commemoration, the partners retrieved the original full size curtain wall details from the archives, had them framed, and displayed them as fine art in the gallery on our main floor.  The contrast between the Lever House details and the sophisticated aluminum curtain wall systems we were executing at the time was striking:  curtain wall technology in the early 1950s, if it existed at all, was in its infancy.  To do Lever House, they really cobbled the wall together from a collection of miscellaneous iron sections, bent plates, and who knows what else.  With razor sharp hindsight, we know now that they didn’t really understand all of the issues of curtain walls. But they were determined to create somethingbrilliant from the means at their disposal.

And they did.

Scrap Moynihan Station

New York State’s recently announced plan to sell development rights associated with the Farley Post Office site, and the resulting controversy, brings the whole Moynihan Station project into a new focus. I’ll get to New York’s proposal later.  More to the point, we should take the opportunity to do the right thing and scrap the Moynihan Station project altogether.

Twenty years ago, the idea of converting the McKim Meade &White-designed Farley Post Office into a replacement for Penn Station was a beguiling concept.  What better way to right the grievous wrong that is the demolition of the magnificent McKim Meade & White-designed Pennsylvania Station, than to replace it with a new station in another magnificent McKim Meade & White-designed building that, providentially, sits atop the railroad tracks?  And so the project began.  And stalled.  And re-started.  And stalled.  Again and again and again.  The problem was, and is, that it isn’t really a good project.  Conceived as it was in an effort to recapture something that is gone forever, it can’t really be much more than an old post office that someone converted into an approximation of a transit hub.

If it had been a good project, and if there had been real support for it, it might have already been done.  And had it actually been done, soothed by the knowledge that we had righted some historic wrong, we would have put up with the limitations and deficiencies of the plan, best expressed as recently as last year by David Gunn, who used to run Amtrak, when speaking to the New York Observer:

“From a transportation point of view,” Mr. Gunn said, “it makes no sense.” For         passengers coming from the 1/2/3 trains, “what the Farley Building does, is make you walk from Seventh Avenue all the way across Eighth Avenue. You’ll have to go under the Eighth Avenue subway, then climb up to the [new] head house, which is to the west of Eighth Avenue, over towards Ninth Avenue. And then, you walk back to where the train is! The trains are still going to be between Seventh and Eighth avenues.” For passengers arriving at Moynihan Station via the IRT Seventh Avenue Line, Mr. Gunn said, “they’ve gotta walk almost a mile.”

But in the twenty years that the Moynihan Station project has lingered in development limbo, things have changed.   The  best thing to do today is to abandon  the Moynihan Station project altogether and devote our resources and energy to relocating Madison Square Garden and building a completely new Penn Station in its place.

It’s not as farfetched an idea as it seems.  This is, after all, New York.  And thanks to Michael Kimmelman of the New York Times and the Municipal Art Society, a concerted lobbying effort last year got the City Council to deny Madison Square Garden, which was unceremoniously dropped on top of what is left of the old Penn Station, the license it sought to operate on the site in perpetuity.  Instead, MSG got another ten years, and a pretty clear message:  move Madison Square Garden.

There are ideas and schemes aplenty as to what the new Penn Station should look like, courtesy of the MAS and the Regional Plan Association, who asked four local architects what a new Penn Station could be (my point is not to critique or advocate one design scheme over another, but if you really want to see them, they can be found here:   http://bit.ly/1i9wAsW).  At best, they are all conceptual sketches albeit very elaborate and seductive ones; the real design will emerge from the hard work of talented people.  But the weakest and least resolved of the bunch is far better than what is there today, and far superior to an adapted post office.

The opportunity here is that, a little more than a hundred years since the original Penn Station opened to the public, we have a the chance to rebuild to build the world-class transportation hub that New York should have, and get a twenty first century arena in the bargain.  It will take a tremendous effort but it will be worthwhile.

There are a lot of ideas out there as to how to get this done, and it will take a full court press.  Two obvious obstacles loom large:  how to pay for a new Penn Station, and where to put Madison Square Garden.

Because none of this is possible without money, let’s start there.  In July of 2013, the Municipal Art Society released a report that proposed the creation of a revenue capture district, kind of like a BID, which would collect payments from property owners in the area, actually payments in lieu of taxes (PILOT).  These PILOT funds would be the income stream that pays down bonds issued to fund the demolition of MSG and the construction of the new Penn Station.  MAS contends that the area property owners would reap the benefits of increasing property values and rising rents, and so should sign on.  In the abstract it makes sense, but area property owners, in whatever the final configuration of this new district will be, must be lobbied and made to understand the need for this and the benefits to them; otherwise it’s hard to imagine a bunch of NYC landlords leaping at the opportunity to pay yet another recurring cost.  In addition, City and State approval of this new revenue capture district would be required.  The MAS report also recommends that the area be rezoned:  both Madison Square Garden and Penn Station are already in the Hudson Yards Special District and are subject to its regulations, which favor the creation of commercial space over residential at present.  There is also a City Planning proposal from 2007 that may be worth re-evaluating.

Then there is New York State’s latest proposal, which is to sell the development rights from the Farley Post Office to fund Moynihan Station. While it, too, is an intriguing idea, and certainly consistent with the new hypercapitalist concept that government should sell its public assets to the highest bidder, funding Moynihan Station is throwing good money after bad.  As an idea, it may also be premature.

As noted above, the Farley Post Office is in the Hudson Yards Special District, which was designed to foster the creation of 28 million square feet of new office space, 12.6 million square feet of new residential space, 1.5 million square feet of new hotel space, and 700 thousand square feet of new retail space. Development of the Hudson Yards district, by which I mean actual construction and execution of the plan, has really only gotten underway in the past year or so, as we crawl out of the real estate slump.  Of the 28 MM SF of office space the plan provides for, somewhere in the neighborhood of 4MM SF are either under construction or close to starting, and of the 12.6 MM SF of new residential space, only one new apartment building has actually been built so far.  All this tells us that it is early in the process, and that no one really knows what the actual demand, absorption rate, and pace of the buildout will be.  It may be more prudent for New York State to hold these development rights until we can see what the demand, and therefore what the real value of these development rights are.  Selling them today sets the State up to sell them too low.

There is also the issue of transferring those rights, whether they are sold today, or in ten years.  Transfers of development rights in the Hudson Yards Special District are governed by the regulations for landmark development rights transfers in the NYC Zoning Resolution.  As the regulations stand, these rights can only be transferred from a landmark site to a receiving site across a street, or diagonally across an intersection.  So, under the current rules, there is a very limited set of receiving sites, and therefore buyers, for these development rights.  While it would make more sense to expand the set of receiving sites, and therefore potential buyers, of these rights, that would require  amendment of the NYC Zoning Resolution, a proposition approached carefully under the best of circumstances.  Still, it is worth further investigation, and may be part of a strategy that calls for holding them in in abeyance, as a kind of backstop to other funding efforts.

Lastly, what to do with Madison Square Garden?  There are some potential sites within a few blocks of where it currently sits, each with its attributes, and each deserving of further study.

And, inevitably, what of the Farley Post Office?  Having rued the last generation’s demolition of Penn Station, and since we think we are more evolved, I believe it should stay in place and a creative new life imagined for it as the development of neighborhood picks up steam.

Time, however, is not on our side.  The fact that Moynihan Station has lingered for twenty years, despite the work of many, should tell us that ten years is a blink of an eye.  Relocating Madison Square Garden and building a new Penn Station are huge, complicated tasks that require focus and commitment from government at the City, State, and likely Federal levels; lobbying and advocacy from the preservation, design, construction, and development communities; and lots of money from every reasonable source possible.  It can, however, be the signature achievement of a new administration, and create a valuable new public benefit for the next century or so to come.

 

 

Are We Kidding Ourselves?

Earlier this week I attended a real estate panel in Manhattan called Beyond the Headlines:  New Development, Sales & Rental Market, put on by the Real Estate Service Alliance (RESA).  RESA is a group of people who, as its name suggests, provide services to the real estate industry; their periodic presentations are attended by brokers, attorneys, contractors, insurance professionals, environmental consultants, title insurers, expeditors, and the occasional owner’s representative (that would be me).  For this panel, a prominent local residential developer and three residential brokers who specialize in the marketing and sale of new developments discussed the current state of play in Manhattan and Brooklyn residential development.

On the condominium side, not much news here:  inventory is at an all-time low, sale prices are at all-time highs, and all the development activity is focused on the high end of the market.  The developer did acknowledge, to the agreement of all, that new rental development in Manhattan is all but impossible.  In view of the stratospheric price of development sites, you just can’t get these projects to pencil out to any acceptable return; there are no more “easy” 50 x 100 foot sites left; the only development deals in Manhattan that can be done are the ones that involve really difficult sites and significant entitlement risk; if only one could find a site that can be had for around $500/Buildable Square Foot, one could build condos that will sell profitably, and quickly, for under $2,000/SF.   Construction of new condo product, while climbing slowly out of the post-2008 cellar, remains well behind the pace set pre-crash, and still below historical norms.  The prediction was that the current scarcity will continue into 2016 at least, which means that sale prices will remain high for the foreseeable future.

On the rental side, average residential rents in Manhattan, while still higher than in Brooklyn, fell slightly at the end of last year; the feeling was that the market pushed back.  On the other hand, rents in Brooklyn are surging, and while rents there are still lower than in Manhattan, the gap between Brooklyn and Manhattan residential rents has never been so narrow.  Not surprisingly, Brooklyn is home to a lot of new residential rental projects.  One of the panelists noted that of the approximately 10,000 units slated to come to market in Brooklyn in the next two years or so, only 10% will be for-sale units, and the rest rentals.  These new rental projects are underwritten based on earning $55-$65/SF in annual rents: that means to you as a tenant, that your 400 SF studio apartment will cost you somewhere between $1,833.00 and $2,166.00 monthly.  These are big numbers for Brooklyn.

The most notable part of the discussion, for me, came when one of the panelists acknowledged that incomes are stagnant, and have been for some time, and job growth is virtually nonexistent.  Which led to the question I put to one of the panelists after the Q&A session:  if wages really are stagnant, and there really is no job growth, how does one reconcile these high rents?  And where are these tenants getting the money?

The answer was, simply and without blinking an eye:  Parents.  All of the tenants have parents who guarantee the leases, and who likely cover the difference between Junior’s income and the cost of Junior’s pad.

Put this in perspective.  A reasonably sized newly built rental apartment building in New York these days represents a development cost of between $90MM and $200MM by the time you’ve bought the land, built the building, carried the acquisition/construction financing, paid the architects, all the other consultants, fees, insurance, and so on (it’s a broad range, to be sure, but there are a lot of variables here).  In order to make this investment pay, the building has to be filled with tenants who pay the rent at the price that brings the needed return.  But in this environment, the tenants really don’t have the means to pay the rent because their incomes are too low, or they don’t have jobs, or they don’t have jobs that pay adequately.  Which everyone acknowledges.  So the economic success of this multimillion dollar investment rests on the parents’ guarantees, or on the ability of one generation to pay for another.

If we were tapping an endless supply of very affluent parents in perfect health who are extending their peak earning years well into their eighties, this might work in theory.  The reality is very different.  The parents are getting older.  They’ve seen their own investments hammered (at least until very recently).  At some point in the near future, they will either stop working, or work less, and their incomes will plummet.  Throw in the desire to see the world before leaving it, or some medical problems, or the need for extended care, or some other indignity of age that comes with a staggering price tag these days, and sooner rather than later the parents will need their money for themselves.  When this happens, forget the guarantee.  Any support that goes to Junior dries up, and if Junior’s earnings don’t pick up, which doesn’t look likely, there’s nothing to pay the rent.  You can guess the rest.

All in all, it’s a very shaky foundation for a very significant investment.  A better way would be to revert to the world the parents came of age in, when incomes really did rise, wealth was created broadly, and our economy really did grow.  Is that too much to ask?