tax credits

According to a survey by TurboTax, New York ranks #2 in the nation in the number of last-minute tax filers (Chicago is #1). Each year the Farley Post Office holds an unofficial celebration of the city’s culture of procrastination as last-minute filers, protesters, and even the Singing CPA convene on its steps and in the lobby.

This year “dozens of Uncle Sams” will hand out “tens of thousands of crunchy Pretzel Crisps (fat free, cholesterol free pretzel crackers) — providing consumers with a stress-relieving crunch to help them make it through the day.” And, as usual, the Singing CPA will serenade tax filers with hits from his recently released his third album from 11pm to midnight.

If you find yourself at Farley on Tuesday take some pictures and submit them to our Flickr pool or send them to khughes@mas.org.

Read about why historic tax credits should be used for redeveloping the Farley Building.

Over the past few months, we received several comments in favor of keeping Farley’s name on the new train station in the Farley Post Office Building. For example:

”I think the Garden should be torn down moved into the Farley Annex, a Train Hall should be built in the Courtyard of the Farley Building's Post Office, and a New Penn Station should be built and renamed Moynihan Station. The Train Hall in the Farley Building should be called the Farley Station, and the new rebuilt Penn should be named the Moynihan Station. The Farley Building is the Flagship Post Office of the United States of America, it is a Historic Landmark, and was dedicated as a monument to the political career of James A. Farley in 1982. All that being said, the sooner those involved with the project realize that Farley's name is not coming off the landmark, and that the post office is staying, the sooner they will get their Moynihan Station. You can't turn a historical figure's monument into a modern politician's monument. Also Moynihan has a federal courthouse in lower Manhattan dedicated to him. Yeah lets destroy a landmark to replace a lost one makes no sense.”

And:

”The James A. Farley Building/Post Office is a National Landmark dedicated in 1982 as a "monument" to the political career of former Postmaster General and Franklin Roosevelt's campaign manager James A. Farley. This dedication has historical significance because Farley is a historical figure. (comes via H. Res 368 1982) Removing his name and the post office from the Landmark does not recognize the physical record of "it's time, place, and use." The assertion that the construction of the Moynihan Station inside of the Farley Building, somehow negates the fact that the Landmark is Mr. Farley's monument is a legally weak argument and is one of the largest historical crimes anyone has ever attempted in the City of New York in the name of Development. Daniel Patrick Moynihan would have been honored to have the station dedicated in his honor, and it is only fitting that before he passed he warned those involved with the project "Good old Jim Farley's name should stay there!" The removal of the Farley Post Office from the Farley Building kills the project, and would be a crime against Farley's legacy and thus the nation, 2-4 billion dollars is not worth it.”

Just as we provided a brief bio of Moynihan, we thought it would be fitting to do the same for James A. Farley.

James A Farley was born in Grassy Point, NY in 1888. After a brief stint with the United States Gypsum Company in New York City, Farley returned home and embarked on a remarkable political career. He served as the town clerk in Grassy Point, NY, warden of the Port of New York, New York State Boxing Commissioner, Postmaster General, head of the Democratic National Committee, trusted advisor to President Franklin D. Roosevelt, commissioner on the Hoover Committee, and presidential candidate in 1940. He is recognized as the first Irish American Catholic to achieve political success at the national level.

He was also famous for what became known as the Farley File. Farley kept a file of information on anyone he or President Roosevelt met with, including names of children, background, and interests.

As Postmaster General Farley was instrumental in bringing public art into the Farley Building and post offices throughout the country. According to a biography from the USPS:

Between 1934 and 1943 Farley oversaw the acquisition of art for the new headquarters building and Post Offices around the country by working with the Treasury Department's Section of Painting and Sculpture, later called the Section of Fine Arts. In contrast with the Works Progress Administration/Federal Art Project (WPA/FAP) designed to provide general economic relief, the Treasury program's mission was to commission art, murals, and sculptures for newly-constructed federal buildings. The art purchased for headquarters included murals and sculptures for the facade and interior of the building. Another 1,200 murals and 300 sculptures were commissioned for Post Offices. Works were selected through national and regional competitions, and winning artists were asked to consult with Postmasters and townspeople before starting a project.

Click here to read a New York Times article about the Louis Lozowick WPA-era murals in the Farley Post Office. Farley passed away in 1976 and the General Post Office was renamed “James A. Farley Building” by Congress in 1982.

What do you think of the comments above? Is it ok to rename the building?

Biography from the National Park Service

Biography from the USPS

Read “Post Office Murals, at 50, Get Face Lift,” by James Vescovi in The New York Times

Watch a NYT video about the restoration of the Farley Building

The New York Times just posted a short video about the recently completed exterior renovation of the Farley Post Office Building. It features Hugh Hardy of H3 Hardy Collaboration Architects, the lead architect of the renovation and Vice Chairman of MAS. The exterior renovation is an important first step toward creating a new gateway for New York, but the building still faces an uncertain future.

The MAS strongly supports the use of the federal rehabilitation tax credit in the redevelopment of the Farley Building, a city, state and national landmark, for two main reasons:

First, adhering to the rehabilitation standards required to qualify for the tax credit will safeguard the Farley Building’s historic fabric, including significant interior areas.

Second, the tax credit would be a significant financial boost of Federal funding to the project (up to $250 million).

At this point, it’s unclear whether the developers and MSG are willing to preserve enough of the historic features, like the lobby’s ticket windows and the brick walls of the future train hall, to qualify.

Watch “An Old Face Rejuvenated: The Farley Post Office Building,” a New York Times video

Historic tax credits for the redevelopment of the Farley building could lighten the financial burden on New Yorkers by up to $250 million. But it’s unclear whether the developers and MSG are willing to preserve enough of the historic features, like the lobby’s ticket windows and the brick walls of the future train hall, to qualify.

The MAS strongly supports the use of the federal rehabilitation tax credit in the redevelopment of McKim, Mead & White’s Farley Post Office, a city, state and national landmark, for two main reasons:

First, adhering to the rehabilitation standards required to qualify for the tax credit will safeguard the Farley building’s historic fabric, including significant interior areas.

Second, the tax credit would be a significant financial boost of Federal funding to the project – especially when faced with rising construction costs, tightening lending conditions, and the ever present danger of “unexpected” costs and delays.

Since 1976, the federal rehabilitation tax credit has encouraged the preservation and adaptive reuse of historic buildings by offering federal tax credits to owners. The tax credits represent a dollar-for-dollar reduction of federal taxes owed based on 20% of the cost of the rehabilitation project.

We think utilizing the rehabilitation tax credit is in the best interest of both the developers and the public. Here is how it could work:

Basically, there are 4 factors that determine whether a rehabilitation project meets the basic application requirements for the 20% tax credit. With a strong commitment from the developers to preserve the interior and exterior of the Farley building we believe it is possible for the project to meet all 4 factors:

1. The historic building must be listed in the National Register of Historic Places or be certified as contributing to the significance of a "registered historic district."

2. After rehabilitation, the historic building must be used for an income-producing purpose for at least five years.

3. The project must meet the "substantial rehabilitation test." In brief, this means that the cost of rehabilitation must exceed the pre-rehabilitation cost of the building. Generally, this test must be met within two years or within five years for a project completed in multiple phases.

4. The rehabilitation work must be done according to the Secretary of the Interior's Standards for Rehabilitation. These are ten principles that, when followed, ensure the historic character of the building has been preserved in the rehabilitation. (Source: U.S. Department of Interior)

We can check off factors 1, 2, and 3. The big question mark is #4 - whether the developers are willing to complete the project according to the Standards for Rehabilitation. The developers of Moynihan Station will have to work closely with the State Historic Preservation Office to determine which interior and exterior features define the building’s historic character. They must commit to preserving those features in the rehabilitation project.

For example, the rooftop addition over the western annex for the new MSG will have to be appropriately set back from the historic façade and not highly visual from the street. The lobby’s ticket windows must be preserved – not blasted through for new hallways. Another hurdle could be the “Wall Retention Requirement,” which requires the project to retain “at least 75 percent of the internal structural framework.” Some early renderings of the train hall showed the historic brick walls of the interior replaced with glass.

Due to complex tax rules, it’s likely the Moynihan Station Venture would syndicate the credit rather than redeeming it themselves. Syndication typically means “selling” the tax credit to an investor or group of investors exempt from passive loss rules (typically a large bank, corporation, or other institutional investor). The “investor” enters the partnership and provides upfront equity to the project in exchange for the right to redeem the federal tax credits. In other words, if the developers can’t use the tax credits, they find an entity that specializes in using them, and the developers form a partnership with them. As a result, both the public and the developers benefit from more federal funding.

Please let us know if you disagree or see some other way to leverage the tax credits. We'll have more info on preserving the Farley building throughout the week.

Resources
The Secretary of the Interior’s Standards for Rehabilitation

A guide to the Federal Historic Preservation Tax Incentives Program

The National Trust’s Guide to Rehabilitation Tax Credits