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| 5/24/2009 | Email this article • Print this article | Historic preservation and the Chalmers building: A better way
R. H. von Hasseln
Special to the Recorder
One of the responsibilities of a municipal historian is to advise on historic preservation matters. Towards that end, I offer the following information:
The basic governing law in this area is the National Preservation Act (NHPA) of 1966: it established the National Historic Register of Historic Places as well as the framework for the creation of state registers and programs. Its major aims were two fold:
First, to prevent "big government" type projects from steamrollering historic sites in the name of urban renewal, airport expansion, highway arterials, stadiums or other projects du jour. It does so by requiring that any project involving federal money, permits, or licenses (or state equivalents under the corresponding state historic preservation legislation) that would significantly alter or destroy a national or state registry site, or any such site that is eligible under the legally prescribed criteria, must involve a review with an eye to lessening or avoiding such damage.
Second, it created a system by which substantial tax credits can be granted to private concerns and individuals to partially offset the cost of rehabilitating historic sites and turning them into profitable, tax generating properties. (20 percent federal, 10 percent state; more if the local government has its own program). This was done in the realization that free enterprise, properly simulated, could do more good than any combination of altruism and government spending could. Other points about the law and its impact on the Chalmers debate that deserve clarification are:
Historic registry does not prevent demolition
There has been much misapprehension as to the imagined coercive nature of historic registers; some people seem to confuse them with local landmark laws (such as in New York City and fifty or so other jurisdictions around the state). Some of these laws can be very restrictive: for example, in downtown Village of Setauket, you must match the neo-colonial motif or you can't build. None of this has anything to do with state and federal historic registers. Under NHPA, a building owner's rights remain absolute: Privately own a registered historic colonial and want to add a Florida sun room? Go ahead, but don't expect any tax credits. Change your mind and want to raze it and start again? That's your business if it's your money alone that is used. Your choices may be constrained by easement, covenant, environmental, zoning, local landmark or other laws , but not by historic registry status unless federal or state money, permits or licenses are involved, in which case the matter must be reviewed by the State Historic Preservation Office (SPHO).
That review does not preclude the destruction or other non-preservation of historic buildings, it only requires that every reasonable attempt be made to find some other solution before state or federal money can be spent to alter or demolish the building.
I have personally been involved in many of these actions. Some where another successful repurposing of the building was found. Others where it was obvious from the beginning the building, no matter how historic, was beyond redemption and had to come down: a marker was placed on the site. Still others quickly slid down a ladder of possible options to destruction: in one case, only one wall was saved to become the backstop for an expanded school playground; in another, the building was thoroughly photographed and documented under the Historic American Building Survey (HABS) before being imploded.
A state historic preservation review will be required before the building can be destroyed
The law requires such a review whether the building is registered or simply determined to be eligible for listing before any state or federal money can be spent that would impact it. The building has already been determined to be eligible.
To the best of my knowledge the SPHO has already forward the nomination of the Chalmers Building for final review: it would not have done so useless it had established with certainty that the building is eligible (in fact, my reading of the law is that it falls in the highest of the three categories of eligibility): any building can be nominated to SPHO, but SPHO will only forward the nomination of an eligible site. Therefore, under the law, there will be a state review if there is any state money involved in the demolition of the building, whether it is accepted for national and state registers or not.
How can Uri Kaufman nominate a building he doesn't own?
Anyone can nominate any building: you can nominate my house if you wish: it doesn't mean it will be accepted, let alone acted on. The state and federal governments have policies of not granting registry status if the building is privately owned and the owner objects. The Chalmers building is not privately owned. It's important to remember Kaufman acted not only within the letter of the law but also its spirit: to encourage private investment to save historic buildings through returning them to profitable, tax revenue generating status.
Why wasn't the city notified of this action?
Under the law, there is no requirement for the state to notify a subordinate jurisdiction of a pending registry action except when the local government is what is known as a Certified Local Government (CLG), in which case the state must notify and provide several months for comment by the local government before taking action. In essence CLGs receive from the state some of its historic preservation authority, akin to when the City was chartered and granted police, judicial, taxation, and other powers from the state. The city government considered this briefly several years ago, but dismissed it as "requiring too much work."
How likely is the Common Council resolution opposing historic registry to influence the final determination?
Not very: in essence, they are asking the state and federal governments to not apply national, uniform standards as to how they spend their money and who may receive tax credits in a single case, not because of ineligibility, or improper procedure, but because ... we would rather they didn't. As the NHPA was intended to help localities not only preserve history, but to stabilize neighborhoods, grow the tax base, etc., it's highly unusual to have a local government in opposition. If it the sole outcome of this was that we appear to be confused as to fact, and divided in purpose, that would be one thing. However, the secondary consequences of this action are much, much more troubling, and will have lasting impact, regardless of were you stand on the future of the building:
We appear to be underhanded
While both eligible and registered buildings require reviews before spending government money that impact them, only buildings that are on at least one register qualify for tax credits (and then only if they met specific Department of the Interior guidelines). Since we didn't need to block registry to keep the demolition option open, it wouldn't speed things up, it can't be argued that the building isn't eligible, and there is no harm that will come to the city through registry, making this resolution (have we ever done likewise before?) appears to be targeted specifically at Mr. Kaufman's profit and loss calculations to force him to withdraw from the contract. This may be true or not, but a reasonable person could draw that conclusion.
A spho review may find we have not taken reasonable action
The grant money for demolition is only allocated; it cannot be expended against an eligible building until a SPHO review is conducted. Any review itself may take up to a year: the State Historic Preservation Advisory Board meets quarterly. Longer, if they hold that after forty years of nothing, we had a working deal with someone who had done this elsewhere, and we kicked the financial stool from under him in mid contract. Their answer may be "Before you spend our demolition money, try to find another Kaufman and this time don't scuttle the deal. Give it a year or two, and then we'll talk." How different from: "Well, you gave him every chance, and if he couldn't do it, probably nobody could. Get some drawings and pictures and take it down."
There may be grounds for a lawsuit against the city
Of course, Mr. Kaufman may simply cut his losses. Or, he may feel he has been wronged and still has an enforceable contact. We can't unilaterally exit the contract without having good and sufficient cause, which could be subject to a court review. When we need an outside attorney to tell us if we're even close to having cause, any hypothetical proceeding would not likely be summarily dismissed. Our taking arbitrary action outside the contract that would increase his costs by 30% would probably significantly improve his standing in litigation and worsen ours. And surely one of the first things that would occur would be an injunction to prevent disposition of the subject building until the lawsuit is settled.
There will be a chilling affect on future development
Certainly among anyone who might be seeking the leverage of the historic register tax credit, but in general, for anyone having to rely on the intentions of the City. Not only does word travel fast and wide among developers, most businesses and investors will survey the general business climate before making a move into the area. Just reading the last few weeks' news coverage on this project would probably send them elsewhere, unless we act now and clearly demonstrate we play fair with any and all comers.
Because that is how it does not appear: we entered into a contract stating this was our mutual interest and requiring him to spend considerable sums of money to accomplish specific actions, and promising him that if he acted in good faith, we would continue our end of the bargain; then before even a thorough examination of whether he was in compliance, we attempted to influence state and federal determinations that would make it all but impossible for him to continue with the contract - even if he had completed all requirements .
This "trapdoor" strategy of insuring the destruction of the Chalmers building by poisoning the well for the developer may at first appear clever, neat, and simple to those who want nothing other than its removal at the earliest moment, but it comes at too high a price: the city-wide ability to attract new development. And even if that is of less value to you than the removal of this particular building, consider that ultimately this strategy may backfire and create delays long beyond the expiration of the current contract. Remember: as anyone can nominate a building so can anyone challenge the state government to honor its obligations to conduct a review of any proposed state or federal expenditure that would impact an eligible building, demanding proof that every reasonable action has been taken prior to the release of funding. Just one person who feels as passionate that the building must stay up as you do it must come down.
There must be a better, middle way, to avoid losing either opportunity or time, which should be acceptable to reasonable persons on both sides. Here is one possibility:
1) Reconsider and rescind the resolution opposing registry approval. If the nomination fails (and so therefore, does Kaufman's financing) let there be no doubt - we had no part in it; our hands are clean. If it succeeds, it poses no significant barrier to demolition if that must be. And we will not have set an official precedent that we oppose individuals and corporations from using their legally entitled tax benefits within our city.
2) Accept mr. kaufman's contractual right to extend his option for an additional year in exchange for $50,000. No action can be taken before the remediation is complete and the in rem seizure of the building is finalized, which will occur during the period of the extension. Therefore, in real terms, should Kaufman fail, demolition would only be delayed an additional six to eight months, for which we will be compensated $50,000, if we do not create any other delays by our recent actions.
3) Precoordinate exactly what actions/information the shpo would require before state money can be expended to demolish the building. This could be as simple as compiling drawings and photographs of the building under the Historic American Building Survey (HABS) at little or no cost to the City. Our position with the state would be greatly strengthened: we've done everything we could, and more: no need for a lengthy attempt to find as yet another new purpose - end it now.
4) Take those actions while the extension counts down to success or failure.
5) Seek designation of amsterdam as a certified local government (clg) And begin harnessing the power of historic preservation, proven over forty years across the country, for the rebuilding of the city. At the same time, it would ensure our involvement in and notification under the state program, and give us access to federal funds that are only available to CLGs. We need to abandon the idea that historic preservation is too much work, and something we need not be concerned about until an issue arises, and put it to work for the betterment of all of the city, all of the time.
Under this plan, if Mr. Kaufman succeeds, we gain tax revenue (approximately $1.2 million dollars a year), avoid the amount we will have to pay above and beyond the grant for demolition, cartage, and disposal, and may be able to repurpose the grant money (less remediation costs) to other rehabilitation projects. On the other hand, If he fails, it will only have cost us several more months after the completion of remediation and seizure rather a year or more for the historic preservation review, and certainly years if a lawsuit is involved. And we can apply his $50,000 to offset the demolition cost overruns. Also avoided are potential legal and settlement costs, and the increased possibility that an expiration date will be applied to the demolition grant money if its use is pushed too far beyond the plan above.
Most importantly, in either case, the good name, faith and credibility of the City will be preserved for all future developmental partnerships. Regardless of our individual hopes and fears, we must not shortsightedly seek to undo the failures of our past at the expense of our future. Otherwise, it's urban renewal and arterial highways all over again.
The author is City Historian of Amsterdam and formerly the New York State Military and Naval Historian and Director of the New York State Military Museum.
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