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A Claim of Hardship is Disputed

city suburban first avenue estate small

Two landmarked buildings on the Upper East Side are threatened with demolition because the owner is making a claim of economic hardship. The two buildings in question were built at the turn of the 20th century, and as part of First Avenue Estate complex, are important for their innovative design as well as in their role in social housing reform. MAS has long been a supporter of its designation and even filed an amicus brief upholding their landmark status.

The owners of the complex (from First to York Avenues between East 64th and East 65th Streets) submitted an application to the Landmarks Preservation Commission (LPC) for the demolition of 429 East 64th Street and 430 East 65th Street on the grounds that they do not generate a sufficient economic return.

The New York City Landmarks Law’s economic hardship provisions are intended to ensure that landmarks regulations don’t deprive a property owner a “reasonable economic return” … “under reasonably efficient and prudent management.”

On Tuesday, January 18, Laurie Beckelman, a member of the MAS Board of Directors and Chair of the Preservation Committee, testified on behalf of MAS in opposition to the demolition and hardship appeal. Beckelman was the chair of the LPC when the buildings were first designated, and later de-designated by the now defunct Board of Estimates and Appeals (click her for more background). MAS opposition was based on the fact that the applicant failed to present the convincing documentation necessary for the LPC to determine the existence of a hardship.  MAS based this position on an economic analysis commissioned by FRIENDS of the Upper East Side and undertaken by HR&A Advisors that revealed that it is possible for the buildings to generate a net annual return that is more than double the legal threshold of reasonable economic return, even with existing rent controlled and stabilized units.

MAS’s testimony focused on how the hardship application used data that is out of synch with the Upper East Side’s robust housing market. For example, the owner indicated that the market-rate apartments could only garner $600 a month in rent. That is an astonishingly low rent for any neighborhood in New York City, and particularly in the Upper East Side. Furthermore, even with those rents the owner assumes a 10-24% vacancy rate in the buildings, which is exponentially higher than New York City’s average 2.76% vacancy rate.

Laurie Beckelman, in testimony to the Landmarks Preservation Commission stated, “Saving these buildings will not only preserve an important part of the city’s cultural and historical legacy, but also the affordable housing the city so desperately needs. This can be accomplished while providing the owner a reasonable economic return, which was precisely the intention of the philanthropist-developers who first built these landmark model tenements.”