Tuesday, February 3, 2015

Can Property Taxes Discourage Demolition By Neglect?

By Jason Yots

Buffalo Rising recently reported about the ongoing preservation battle at 110 - 118 South Park Avenue, in Buffalo's Cobblestone Historic District (1).  In short, the owner would like to demolish the building and replace it with a multi-story tower.  Having been denied a demolition permit in 2011, the owner now is ignoring code enforcement directives and allowing the building to rapidly deteriorate.  Efforts by surrounding business owners to buy-out the owner have been rebuffed.

Our city's building code enforcement process can and should do more to discourage demolition by neglect.  But tougher code enforcement alone will not eradicate DBN tendencies.  Hitting owners in the wallet, however, might be effective.  One such measure that's been considered in other states is land value taxation, through which the land beneath the building - rather than the building itself - is allocated most of the property's value.  Under our current property tax system, as an owner disinvests in his/her property, the market value drops and, eventually, so will the property tax assessment, making it easier for a DBN-owner to stay in title without reinvesting.  Under a land value taxation system, DBN is discouraged because an owner's taxes are based on the value of the land (which generally is not negatively affected by DBN), requiring an owner to maintain his/her building to keep it cash-flowing.

Coupled with a receivership-based code enforcement process, land value taxation can be a valuable tool for communities battling DBN.

1. The People vs. Darryl Carr (February 2, 2015, http://buffalorising.com/2015/02/the-people-vs-darryl-carr/)

2.  Photo credit: Buffalo Rising

Monday, January 19, 2015

New York’s Brownfields Cleanup Program: Back From the Landfill?


By: Jason Yots

Like most Rust Belt states, New York has its version of a brownfields cleanup program (BCP) that offers financial assistance to developers willing to remediate and redevelop environmentally contaminated land and buildings.  In New York, that assistance is provided largely in the form of reimbursement-based state tax credits.  The last iteration of the BCP legislation was set to sunset at the end of 2015, prompting renewal negotiations in Albany last year.

At issue in those negotiations were perceived abuses (mostly downstate) of the redevelopment component of the program.  Critics argued that, despite prior rebalancing, the BCP still was too light on remediation results and too heavy on redevelopment upside (for which, goes the argument, there are other incentives, if needed, or the private market itself).  Proponents of the program argue that in hard-to-develop areas like upstate New York, the BCP is a critical component of the bundle of economic development incentives required to plug the funding “gap” that plagues most real estate redevelopment projects.

Backing critics, New York Governor Andrew Cuomo recently vetoed the legislative renewal of the BCP, casting a cloud over numerous upstate projects that would have relied on the program in the coming years.  But there may be a silver lining:  The Buffalo News reported today that Governor Cuomo is stepping back from his prior veto in exchange for more changes to the program during the budget process.[1] 

The most significant change for historic rehabilitation projects may be that the redevelopment component of the BCP would be available only if at least one of three criteria is satisfied:

1.            The area surrounding the project is “economically distressed” (to be defined, but presumably will take a cue from similar provisions in New York’s rehabilitation tax credit law).

2.            The project involves “affordable housing” (generally meaning households earning less than 60% of the area’s median income).

3.            The project is “upside down” (meaning that the cost of the remediation exceeds the current market value of the building).

Will these new requirements constrict the overall flow of projects toward the BCP?  Potentially.  But most upstate New York projects enjoy the dubious benefit of satisfying one, if not all, of the new criteria.  Hopefully, that will mean that the BCP - which has become so critical to the feasibility of historic rehabilitation projects in upstate New York - will remain fully available and funded.



[1] “Cuomo Plans Changes for Brownfields Tax Breaks”, The Buffalo News, January 19, 2015 (http://www.buffalonews.com/city-region/cuomo-plans-changes-for-brownfields-tax-breaks-20150118)

Saturday, March 22, 2014

National Park Service Issues Its Annual Historic Tax Credit Report Card


By Jason Yots

If you’re like me, then you’ve been anxiously awaiting the issuance of “Federal Tax Incentives for Rehabilitating Historic Buildings”, the National Park Service’s annual report about the performance of its historic tax credit (HTC) program.  Well, wait no longer because the 2013 version hit inboxes this month (Note #2), and this year’s issue was illuminating to watchers of the historic rehabilitation industry.

Preservation By Numbers

Like all good annual reports, the HTC report is packed with statistics.  On the macro level, the historic tax credit program generated over $6.7 billion in new investment in 2013, an increase of 21% from 2012.  At the micro level, the average cost of an HTC project was $5,820,000, while forty percent of all HTC projects cost less than $500,000 to build.  An interesting tidbit for small cities like Buffalo, NY: projects both large and small can work with HTCs.

Jobs, Jobs, Jobs

In historic preservation, we never tire of that broken record: “Preservation Means Jobs!”  Because it’s true.  Since 1978, the HTC program has created over 2.4 million new jobs.  In 2013 alone, the program created nearly 63,000 net new jobs, up from 58,000 in 2012.   And before you can ask, “Where, in China?”, we read that an average of 78 new LOCAL jobs are created with each HTC project.  Factor in the $40,000 average annual pay-days on HTC jobs, and suddenly it’s a no-brainer that small market cities like Buffalo should be encouraging HTC development.

Lofts, Lofts, . . . Affordable Housing?

The HTC program is a strong housing generator.  In 2013, the program rehabilitated 247,625 units and helped to spur the creation of another 236,886 new units.  Of those 484,511 total units, 131,438 – or a full 27% - were low-to-moderate housing.  So, while the perception at times may be that HTCs only result in fancy urban lofts, the reality is that the impact of HTCs on the housing industry is in fact diversified.

Most Importantly, How Did WE Perform?

In the end, it’s all about us, so let’s close with some statistics specific to our state.  2012 was an active HTC year for New York, and 2013 built on that momentum.  In overall “Part 2” approvals (the government’s OK to start work on your HTC project), New York placed 5th with 63, behind Virginia (128) Louisiana (119), Ohio (78) and Massachusetts (72).   To give that number some context, however, consider that New York led the nation in total HTC project costs with an eye-popping $1.165 billion in estimated HTC investment (that is, about 17% of all HTC investment in the nation in 2013).  Ohio placed a distant 2nd in that category with $612,610,000.  New York’s total investment undoubtedly skewed a bit higher due to New York City’s propensity for mega-projects, but it’s clear that New Yorkers in general are aware of what only a handful of other states have figured out: commitment to the HTC program means new investment, new jobs and new lives for old buildings.

Jason Yots is President and CEO of Preservation Studios LLC  www.preservationstudios.com.

Notes:

1.  For background on the federal and NY HTC programs, please see http://buffalorising.com/2012/10/survival-of-nys-historic-tax-credit-program-may-depend-on-bifurcation/

Sunday, March 9, 2014

Scajacuada Creek and Expressway


Written by Derek King, Architectural Historian at Preservation Studios.
In August of 2012, an urban explorer who runs the blog "Concrete Aperture" explored the tunnels that comprise the capped stretch of Scajacuada Creek. The blogger and his friend traversed the three miles of capped creek from Forest Lawn to the edge of Buffalo, documenting the smells, sounds, and sights (or lack there of, in the pitch-black darkness), of one of the most curious urban planning decisions in Buffalo's history.
tunnel-14
Entrance to the capped section of the Scajacuada Creek, from Concrete Aperture's exploration of the tunnels.
In 1921, the City of Buffalo responded to the concerns of citizens in the quickly multiplying urban developments of the city's East Side. The Scajacuada Creek, a tributary that flowed westward from the surrounding towns out to the Niagara River, was being polluted by nearby factories, overflowing waste, and negligent homeowners. Rather than address the reasons why the creek was contaminated, and thus, smelled awfully, the City decided to construct a concrete cap over the three mile stretch from the city's Largest Cemetery all the way out to Cheektowaga. Constructed at the height of Buffalo's wealth, the capping of the Scajacuada was an engineering feat, but an irresponsible and wasteful one that defines the blunders of Buffalo's planning history.
Many of Buffalo's decisions over the last century followed similar simplistic logic. Like many cities, Buffalo pursued the easiest solutions to problems rather than the most correct ones. The city ran highways through parkland, and railways through neighborhoods. They let 500,000 square foot factories emerge right next to schools. They demolished entire blocks of buildings in order to combat blight, without any plan to address the poverty that leads to it in the first place. From 1920 until 1980, the actions of Buffalo's planners, whether pushed by modernist hubris or by an automobile-based planning ideology, irreparably harmed the landscape of the city.
If the capping of the Scajacuada Creek represents the modern ideal that there is a man-made solution to any natural "problem", the created of the Scajacuada Expressway represents the sacrifices made to appease car-dependent citizens in the years after the Second World War. Route-198 was finished in 1961, connecting the Niagara Thruway (which runs along the waterfront) with Route 33, an urban arterial that was finished around the time as the Scajacuada and runs downtown. The NY-198 corridor has been praised as one of the only east-west corridors through the city, but at what cost?
The route runs through the middle of Delaware Park, the heart of Olmsted's Parkway System here in Buffalo. Frederick Law Olmsted, designer of Central Park in New York City, chose Buffalo to highlight the true capabilities of urban parks. His parkway system  here connected the entire city to the large Delaware Park, running wide tree-lined boulevards and large-roundabouts through neighborhoods, all leading back to "The Park." 
Elm-ave-Bridge-Buffalo-NY-steel-1
Aerial Photograph of Elmwood Avenue and Delaware Park prior to the creation of the Scajacuada Expressway
Combined, the creation of the NY-198 and the NY-33 represent two of the most irresponsible blunders on the part of Buffalo planners in the past.  The NY-33, or “The Kensington Expressway,” created a rift through one of the city’s most affluent African American neighborhoods, creating a literal canyon down what had been Olmsted’s most glorious parkway in the city. The Scajacuada Expressway bisects Delaware Park with a four-lane highway in the middle of one of Buffalo’s best public spaces, and then runs along and over the western terminus of the Scajacuada Creek.
Together, the condition of Scajacuada Creek and the fate of route NY-198 are intricately tied, as citizen-groups advocate not only for the remediation of the waterway, but the downgrading of the highway, if not its outright removal. Though representative of much larger issues in Buffalo (aging and disruptive infrastructure, and neglected natural resources), these two campaigns signify the growing trend in Buffalo to not blindly accept the mistakes of previous generations.
Scajacuada Creek, with expressway in background.
Scajacuada Creek, with expressway in background.
Over the course of the next few months, I will explore the history of the Creek and Expressway, the current campaigns regarding their improvements, and lastly, what the broader implications are for similar problems throughout the city. The series will take a closer look exhibits at Buffalo’s History Museum and Burchfield Penny Art Museum that are highlighting the issues surrounding these two campaigns, as well as the community groups and organizations driving the effort to effect change on these hot-button issues.
Looking back at these mistakes, however, the intent is not to assign blame. Instead, with 100 years of urban planning blunders, this series, and these campaigns, are about learning from previous lessons, and creating a Buffalo that we not only want, but that we deserve.
Like the “UrbEx” bloggers who trucked through three-miles of sewage and stagnant water that currently defines the Scajacuada Creek, the goal is not to criticize and complain, but to understand and improve, so that maybe the future of the creek, and expressway, wont be as dark as the caverns that wind beneath Buffalo’s East Side. 
This piece also appeared on the Buffalo Exchange.

Tuesday, February 11, 2014

Embody This

By Jason Yots


Historic preservation advocacy is delivered in many forms – economic, environmental, aesthetic, political, moral, ethical.  Some concepts are more accessible than others, but they all share a goal: to promote historic preservation as a path toward more sustainable living.

Perhaps the most direct path to that goal is the historic preservation argument built on the notion of “embodied energy.”  Before you jump back to Reddit, hear me out.  This is actually pretty interesting stuff, especially if you like to geek-out on preservation stats.

Let’s start with some dictionary.  One way to define “embodied energy” is “the energy required to extract, process, manufacture, transport, and install building materials” (Note #1).  In other words, it’s the collective energy required to bring a new building into the world.  Compare this to “operating energy” – the energy expended in using the building – and you’ll see that we’re heading into some new theoretical territory.

Most “green building” efforts focus on the operating energy side of the equation, where the primary focus is on building the most energy-efficient structure possible (within your budget, of course).  The proliferation of the U.S. Green Building Council’s “LEED” energy ratings for new and existing buildings is an example of this emphasis.  However, particularly where a building will be demolished and replaced by a new building, a tight new building envelope and efficient new systems are only part of the analysis, argue some preservationists.  In that scenario, one must also factor in the embodied energy that is squandered when a building with a remaining useful life is demolished and landfilled.  When you do, “green” buildings become, well, less green.

Still a little fuzzy?  Maybe some math might help.   The May T. Watts Appreciation Society created an intriguing online program called “The Embodied Energy Calculator” (Note #2).  Using only your building’s type and its gross square footage, the EEC estimates your embodied energy investment in a building.  The EEC also calculates the “demolition energy” that would be generated by demolishing a building by factoring its construction type and its gross square footage.

Let’s say that Developer plans to demolish a 25,000 sf masonry building to construct a similarly sized “green” building on the same site.

41,000,000 – mBTUs (Note #3) expended to build the tear-down
     387,500 – mBTUs expended to demolish the tear-down
41,000,000 – mBTUs expended to construct the new-build
82,387,500 – total mBTUs to construct the new-build

How much energy is 82,387,500 mBTUs?  One measure would be the equivalent of 716,413 gallons of gasoline, or enough to propel my Honda CR-V over 14 million miles.  Yeah, that’s a lot of energy for one medium-sized building, however green it may be.

Based on this methodology, then, a building’s overall efficiency would seem to depend heavily on the decision to include in the equation the embodied energy from the construction and demolition of the building it replaced.  Whether that's a fair measurement of a building's energy efficiency may be debatable but the adage “the greenest building is the one already built” certainly merits serious consideration.
  
Notes:

1 – Wayne Curtis, “A Cautionary Tale.”  Preservation (Jan./Feb. 2008).


3 – One mBTU = 1000 British Thermal Units.

Wednesday, February 5, 2014

Preservation Bytes


Written by Jason Yots, President and CEO of Preservation Studios

The former Duffy Silk Factory at 1210 Broadway,
located near the Belt Line
The New York Times recently featured Chattanooga, Tennessee in its Business Day section, describing it as possible model for the resurgence of former industrial centers (Note #1).  More specifically, the article discusses the connection between Chattanooga’s investment in ultra-high-speed fiber-optic infrastructure and a recent surge in capital and professional talent flowing into the city.  Known as “The Gig” locally, the taxpayer-owned fiber-optic system is considered by some to be the fastest system in the United States.  How fast?  How about one gigabyte per second (or about 33 seconds to download a two-hour high-definition movie)?  That’s 50 times faster than average the “high speed” internet available to American homes.  For less than $70 per month.

But folks aren’t moving to Chattanooga because they can download movies faster; they’re moving there for the jobs that have emerged from the businesses that have started or expanded there to access The Gig.  Here’s a bit of the article:

“Since the fiber-optic network switched on four years ago, the signs of growth in Chattanooga are unmistakable.  Former factory buildings on Main Street and Warehouse Row on Market Street have been converted to loft apartments, open-space offices, restaurants and shops.  The city has welcomed the new population of computer programmers, entrepreneurs and investors.  Lengthy sideburns and scruffy hipster beards – not the norm in eastern Tennessee – are de rigueur for the under-30 set.”

Former factory buildings?  Scruffy hipster beards?  We have a few of those in Western New York, don’t we?  If Chattanooga launched The Gig only four years ago, we aren’t that far behind.  In fact, this reminds me of a local effort from the late-1990s encouragingly called the “Buffalo Byte Belt” that focused on attracting technology companies to the trunk of Main Street downtown (Note #2).  I don’t know if the Buffalo Byte Belt took off downtown but it might be something that Buffalonians should reconsider, perhaps along the re-emerging Belt Line (no relation).

-----------------
Note #1 - “A City Wired For Growth”, Edward Wyatt, February 4, 2014

Note #2 - See, for example, this 2001 Business First article - http://www.bizjournals.com/buffalo/stories/2001/06/18/story3.html?page=all.

Wednesday, January 22, 2014

The History of Hamlin Park Finale: The Legacy of Model Cities and Hamlin Park in the Present

This information comes directly from the National Register nomination that Preservation Studios completed. Check back for additional installations in the series in the coming weeks. Stay up to date with all things Hamlin Park by liking the Hamlin Park Historic District on Facebook.

As a whole, the Model Cities program is remembered fondly by participants, not only for vestiges like the Build Academy, which survived the end of the program, but for achieving some of the less quantifiable goals of the program regarding power and agency, noted this in the documentary Model City:

Buffalo is a great example of the level of agency created for citizens by the Model Cities program. Aside from larger projects run by the Model Cities Agency, dozens of other programs were enacted through the Model Cities funding, often collaborating with other groups in the city. Two programs were run in junction with the Buffalo Library; the Readily Accessible Materials Van (RAM Van) brought magazines, books, and films to areas without access to a library, and the Bars Beautyshops and Barbershops (The Three Bs) program provided encyclopedias to areas where residents typically congregated. In August 1972 a Model Cities Expo was held to highlight all of the different projects made possible by the program, around 36 in all.

HP-1280


Tangible results of the program are more difficult to evaluate, though the effects of the funding on Hamlin Park seem apparent. Though much of the area east of Main Street suffers from poverty, Hamlin Park fared better than most. The seven census tracts that encompass all of Buffalo’s Model Cities area have dropped by over 50 percent in population and are now largely impoverished African American neighborhoods. Indeed, beginning with the topmost portion of Hamlin Park, the census tracts increase in poverty the deeper you get into the Model Cities program areas. Tracts 52.02 and 33.01 (the boundary of the Hamlin Park historic district) have poverty rates of 26.27 and 25.5 percent, whereas the tracts immediately to the south (within the remainder of the Model Cities area) have rates of 30.2, 37.3, 29.9, 37.05, and 44.7.

HP-0749

In many ways, the goals of Model Cities were far too lofty: broad, sweeping programs that combated blight, poverty, health, recreation, and education. Based on its own criteria, the program utilized in Hamlin Park was actually highly successful, largely because it was unburdened by the full program’s expectations. Indeed the city’s only expectation for rehabilitation programs was to prevent conditions from getting worse:

While code enforcement projects represent the least costly of the available urban renewal activities, they are also capable of the least amount of change. Consequently the areas which have been selected for code enforcement action have been drawn primarily from residential areas which are presently stable with the object of maintaining this stability. - Model Cities Pamphlet

HP-0738

A variety of factors contributed to Hamlin Park’s maintaining building integrity, population density, and low poverty rates compared to the remainder of Buffalo’s East Side. The establishment of the Hamlin Park Taxpayer’s Association in 1965 enabled a largely middle class neighborhood to mobilize against the issues of poverty spreading throughout Buffalo’s East Side. Working with city officials, they helped qualify the area for a project that would eventually be folded into the Model Cities program, enabling families the tools to help improve their neighborhood and fight off blight. Hamlin Park was chosen initially because of the neighborhood’s proximity to impoverished areas, a buffer community against blight and poverty, and the Taxpayer’s Association was pivotal in maintaining that integrity after Model Cities ended, not only by assisting homeowners with subsequent state and federal assistance programs, but helping to establish the local historic district in the 1990s. 

HP-1282

While Hamlin Park demonstrates neither the unqualified success nor failure of the entire program, it does demonstrate that with successful targeting and implementation, rehabilitation programs can succeed in stemming or counteracting the effects of blight. Unlike the lofty goals for much of the city, the code enforcement program, run simultaneous with and then through the Model Cities program, was highly successful at preventing the effects of poverty that spread through Buffalo’s East Side, particularly in comparison to the surrounding neighborhoods today.

1913 4-24 Buffalo Express

While Urban Renewal funding enabled the rehabilitations that maintained the neighborhood’s integrity, Hamlin Park’s success in the Model Cities program is tied to the Taxpayer’s Association that formed to facilitate the dispersal of those funds. The involvement of the group in the district did not end with Model Cities but continued in the following decades, whether implementing “Watch Dog Programs” to battle building deterioration, or assisting residents in applying for subsequent HUD program funding. In this way, Model Cities was successful in Hamlin Park by providing important funds for the community, but more importantly, by prompting the development of an organization shaped the neighborhood long after the program finished in 1975.

Northland Avenue

In the course of 153 years, the area known as Hamlin Park has been influenced by a variety of individuals, ideas, and movements, and the effects of those influences can be seen in the physical features of the district itself. The earliest stage of its history is traced in the curving streets of the northeast corner. Designed by August Hager, but inspired by Frederick Law Olmsted, it captured the dilemma of the nineteenth-century urbanite attempting to create the flowing, open spaces of the rural environment within the bustling crowded cities they occupied. The second period of development, at the turn of the twentieth-century, epitomized much of Buffalo’s streetcar neighborhoods: small, narrow lots with rows of identical houses, offering thousands of families the ability to relocate “home” to quiet, secluded neighborhoods only a transfer or two from their workplaces in the industrial and manufacturing parts of the city. Finally, the neighborhood epitomizes Buffalo’s, and the nation’s, attempt to combat the poverty and blight creeping into areas that seemed so idyllic only a generation before.


Driving Park
Back in the days of the Driving Park

Hamlin Park emerged from the 1970s as one of the city’s only Urban Renewal success stories and, coupled with Allentown-Lakeview, could be used as an example for future revitalization programs. When Buffalo applied for Model Cities funding in the 1960s and began outlining its plan for Hamlin Park, it saw that neighborhood as a vanguard against the poverty spreading through its East Side neighborhoods. Though the concentrated code enforcement program, and the Community and Taxpayer’s Association that emerged because of it, were successful at mitigating the effects of poverty in Hamlin Park, the remainder of Buffalo’s Urban Renewal programs were largely failures. Today, Hamlin Park is one of Buffalo’s last intact historic East Side neighborhoods.