In response to yesterday’s post about landmark districts, one commenter said that it wasn’t a good example of landmarking gone awry, since the project was approved, apparently without controversy. Of course, he’s right – even the Landmarks Preservation Commission isn’t going to turn down an incredibly tasteful four-story neoclassical flagship store of a major American retailer in place of an unremarkable, run-down, two-story post-war building – the risk premium on this project was probably very low. But change any of the variables – have the new building be a bit taller or more modern, or, god forbid, have it replace a pre-war building – and all of the sudden you’re going to end up paying extra for the uncertainty. (And in fact, it’s highly likely that the only reason Ralph Lauren could afford to build such a store in that location in the first place was because the land was devalued by its restrictive landmarking and perhaps zoning.) As one commenter, whose email address suggests he works in real estate finance, puts it:
It is always difficult and costly. Think of a few months delay. There is also the uncertainty. With zoning, you can build “as of right.” So, as long as you follow the law, you can spend vast amounts of time and money and care planning your project. With [the NYC Landmarks Preservation Commission], there is no certainty. That’s another ball game. Architects always ask, when you speak to them about your project, with a haggard look in their eyes, if the property is landmarked. It’s like having a high strung and unpredictable spouse who could blow up your project at any point, for any reason, and for none.