Any Wall Street investor will tell you that generating a return on your investments takes vision, hard work and maybe some luck. In that case, the efforts that turned a $10 purchase from the federal government into a $16 million investment in the preservation of New York City’s historic properties are perhaps worth a tickertape parade. With the purchase of an obsolete federal building, the state and city of New York have used excess income from their investment to fund preservation projects for the past quarter century.

Only blocks from the city’s docks on the Hudson River, the brick-and-granite, Romanesque Revival style federal building was completed in 1899 as the U.S. Appraiser’s Warehouse. Occupying an entire city block, each floor of the 10-story building is more than one acre in area.
It was here in this warehouse that U.S. Treasury Customs Service agents would examine, test and appraise imported goods to determine duties due to the federal government.

In 1938, when Treasury determined it no longer needed the warehouse for the Customs Service, the federal government converted the building into an archive for government records. The National Archives Record Center in Greenwich Village became outdated in the years that followed. By 1976, the federal government had determined that the Archives had become obsolete and declared it surplus property. Then, using provisions under the Federal Properties and Administrative Services Act of 1949, it offered the building for reuse to state and local governments.

The New York Landmarks Conservancy, a private, nonprofit organization, spearheaded the efforts to examine the feasibility of the building’s reuse and to generate state and city interest in obtaining the property. The city eventually applied to the government to obtain the Archives Building as Historic Surplus Property. Based on the city’s creative reuse plan, the federal government determined that the city’s ownership would create enormous benefits to the public.

In 1982 GSA sold the former federal Archives Building, which appraised for $3.3 million in 1976, for $10 to the City of New York. The city, in turn, transferred it to the Archive Preservation Corp. (now the Empire State Development Corp.), a subsidiary of the New York State Urban Development Corp.

The Archive Building was converted into 479 residential apartments, subsidized rental space for nonprofits and ground-floor commercial space. Although the development plan was imaginative, it was the financial plans for the reuse that have created far-reaching public benefits for the citizens of New York City. .

The financial plans for the Archive Building require the developer contribute a minimum annual payment plus a percentage of the gross commercial income for preservation purposes. The developer, chosen through a competitive process, contributes excess profits from the building to the Landmark Conservancy’s Historic Properties Fund, a preservation revolving fund. This fund provides low-interest loans and small grants to owners of historic residential, nonprofit, religious and commercial properties. Most of these properties are located in lower- and moderate-income communities in the city’s five boroughs.

To date, the Historic Properties Fund has received approximately $8 million in payments from the developer. This money has made it possible for the community to complete many historic renovation projects throughout the city. Through the low-cost loans they obtain through the fund, owners of these properties have been able to restore brownstones, repair and duplicate wood windows, clean and repoint brick, make structural improvements, replace roofs and repair architectural elements from cornices to stoops. Loans from these funds have also allowed owners to install more appropriate wood siding instead of vinyl; to replace missing features such as brackets, cresting and parapets; and to even restore the corroded hull of a harbor tugboat. Most incredibly, the default rate on the entire loan portfolio is near zero.

It is just this kind of large and continuous return to the community that the 1949 law envisioned in forgoing a public sale of properties such as the Archives Building. With its partner GSA, the National Park Service has used its Historic Surplus Property Program, a small program within the agency, to save many National Register-listed properties. This program not only has succeeded in connecting communities with their history but also has helped these communities preserve their neighborhoods’ historic and economic vitality.

While New York’s return on its initial $10 investment may “only” be $16 million — and growing, the benefit to preserving this piece of our history for future generations is priceless.

To learn more about the Historic Surplus Property Program, visit  http://www.nps.gov/history/hps/tps/hspp_p.htm

For additional information on this article, contact Alisa McCann, architectural historian, NPS, Northeast Regional Office, Preservation Assistance, at (215) 597-0651, lisa_mccann@nps.gov.