Friday, July 18, 2008

Rudin/St Vincent’s Proposed Greenwich Village Development

The following is Noticing New York's written comment to the NYC Landmarks Preservation Commission delivered in connection with its July 15, 2008 hearing on the Rudin/St Vincent’s Proposed Greenwich Village Development.

July 15, 2008

Hon. Robert Tierney
Chair, NYC Landmarks Preservation Commission
One Centre Street, 9th floor
New York, NY 10007
fax: 212/669-7960 or 669-7955

Re: Rudin/St Vincent’s Proposed Greenwich Village Development
Dear Chair Tierney:

This comment is being offered in the name of Noticing New York, an independent entity dedicated to the proposition that developing New York and appreciating New York go hand in hand.

As an attorney experienced in real estate and an urban planner, I am thankful to be able to offer this testimony with the benefit of having reflected upon the testimony that was offered at the portion of the hearing held on June 3, 2008.

The proposed St. Vincent’s plans, as most recently revised, will punch down from the north and shrink the boundaries of the Greenwich Village Historic District with two piercing stabs. Each of the two spearheads into the district for new buildings proposed to be built represent significant increases in district density which will have considerable value to the property owners.

In one case, the ultimate proposed owner benefitting is a consultant real estate developer that will be buying property from St. Vincent’s Hospital. Presumably, a higher price will be paid for the property because the developer hopes to inherit, undiminished, an ability to build at greater density in the district that was conferred upon the hospital when occupying the site. The hospital was able to build at greater density and to build at all on the site to be acquired because of its special status. Buildings that were previously part of the historic district are no longer there as a result. The density that was granted was partly to allow the hospital greater density it was believed necessary for it to function. Extra density beyond the minimum was probably allowed by variance not because the density per se was needed but because the configuration of buildings and mismatched floor heights required extra passageways and backyard extensions to permit all the necessary connections. The same hospital use will require a smaller FAR with a better configuration. The hospital now proposes to abandon the premises with the special accommodations that were afforded it in the past.

St Vincent’s itself is the owner proposed to benefit from the second spearhead of density into the district. It proposes to benefit by using its special status in an ad seriatim manner to achieve an increase in density going far beyond what is typical in the district. St Vincent’s financial gain will be more pronounced than it would be if another site were involved because the much smaller building it will be demolishing was bought by it at a low price that assumed the protections already in place. St. Vincent’s would now have those projections be set aside.

Each of these two proposed spearheads of density into the district represent subsidies to St Vincent’s to the extent that they would not be given in accordance with generally recognized principles. St. Vincent’s President and Chief Executive Officer Henry J. Amoroso as a guest on the edition of the “Stoler Report” real estate program whose broadcast coincided with the Commission’s June 3, 2008 hearing, said that St. Vincent’s was looking to “leverage” its real estate assets. What is proposed here is not “leverage.” It goes beyond using the package of rights St. Vincent’s or any property owner could normally expect to have. It looks instead for St. Vincent’s to use its special status to transmute the value of its real estate, not only for itself but for real estate developers who may buy from them. Creating real estate value (at community expense) so that it can be sold to a developer is the most obvious subsidy imaginable.

No doubt there is an understandable urge to subsidize a worthwhile hospital which we desire to see continue to operate, especially when that hospital has had a brush with bankruptcy. But should subsidy be furnished by bending the community’s landmarks laws to create subsidies not previously known? If so, there are a lot of venerable nonprofit institutions in the Greenwich Village Historic District that can be subsidized by the creative carving up and selling of the district. When all is said and done we will have no Greenwich Village and no historic district left. We will also have no operational principles with which to protect other districts.

Hospitals in New York State are subsidized by the government by other means. I suggest that the LPC be on guard against getting involved in the hospital subsidization business. To outsiders it will be a frightening morass. Hospital accounting in New York State is far from easy, counterintuitive and, at best, can only be understood by experienced insiders. Regulations involving highly complex reimbursement formulae force hospitals to operate constantly on the brink of artificially narrow and rather manipulable profit margins. In New York the dance is done with the thinnest margins in the country. Hospitals are regularly forced to internally subsidize patients for which they receive only 25% reimbursement. Meanwhile, heavy reliance on philanthropy complicates the picture. (I am sure that LPC is also aware that instincts toward philanthropy in the resolution of these matters would be inappropriate, while presenting separation of church and state problems.)

One should be wary of designing new subsidies for industries that are beyond one’s ken. Subsidies if not properly designed can turn out to provide odd inducements. They typically encourage the thing that generates the payment. For instance, a subsidy that operates by rewarding a hospital to move and using its special status to create density and wipe out historic district protections will likely result in hospitals moving repeatedly and too often, as each move will generate a payday. And whenever a hospital moves people will be left guessing whether the investment in the old premises has been sensibly amortized by a long enough stay. As the Coleman and Link buildings were built in 1984 and 1987, respectively, this is probably a question people should be asking now. The way to avoid the question is to avoid the artificial creation of a subsidy.

The current revised proposals are clearly better than the original proposals the LPC rejected. While that has allowed some politicians to applaud the improvement and thereby endorse what is now before the Commission, anyone who thinks that relative benchmarks can be set by the seriously flawed proposals that preceded these revisions is in error. The benchmark is, was and always should be the Greenwich Village Historic District itself and both these spearheads of density would alter its boundaries and shrink the district. The previous proposals were significantly more dense. Not only were they were out of character with the district, they were out of character with the development to the north of the district. It is doubtful that their purpose was anything other than a ploy proposing the worst. The new proposals are more consistent with simply moving the line which separates the district from the greater density to the north. The proposals are commendable efforts if the goal is to shrink the Greenwich Village Historic District by moving density inward, but they are not acceptable if the goal is to protect the district.

The two spearheads of density have an interesting relationship to each other. Clearly the spearhead proposed to be the new St. Vincent’s Hospital will have the greatest bulk but retaining bulked-up size for the new Rudin residential buildings on the Coleman and Link building sites serves (in the models and drawings) to make less clear to the public how large the new hospital building will be. Viewed standing alone, it would be much more clear how large the moved and consolidated hospital is. Conversely, because the hospital is so very large people looking at the models are much less likely to appreciate how much atypical bulk the Rudin Organization hopes to incorporate into the new residential buildings they want to build. Two wrongs, however they may jade us, do not make a right.

Whatever the alternatives might be, St. Vincent’s proposes to demolish the O’Toole Building to build a new hospital building. The deeply flawed previous proposal spuriously also sought to tear down many more buildings, most of which are now proposed to be more appropriately reused. It is still proposed to tear down the Reiss and Cronin buildings. The Reiss building is valuable to its streets and the neighborhood and should be preserved, while it is harder to argue significance for the Cronin building. They are both proposed to be demolished for in order to create underground parking. Since the parking is underground it is an opportunity to create density and real estate value that is not as obvious as above ground floors, but should the creation of underground parking in Greenwich Village trump the goal of preserving buildings like Reiss in the district? If so, the overall district could change a lot more because there are many more buildings suitable for leveling on the same grounds. Or is this proposed to be done specially to subsidize St. Vincent’s?

There has been repeated mention that Rudin, the developer involved with these proposals, is going to be building a school on another site. When mentioning this people point out that it is separate and ought not to be considered in conjunction with these proposals. That is disingenuous because the mention is almost certainly intended to have political effect whereas the mention that it is a separate matter avoids scrutiny. We can’t but help that there is a current fashion of behavior for developers who want consequential favors from the populace to engage simultaneously in multiple endeavors. While being paid by the public to build a school at a profit might in itself never be considered a favor, doing it in conjunction with pursuing another project somehow lets overall discourse get confused as to whether it might be a favor.

One quick note to end. I believe that the plans mentioned with respect to the brass doors of the Nursing Residence were intended to generate a more suitable counterproposal from the LPC.

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