Another data point illustrating that Austin's historic landmarking process is deeply flawed.
Last week, the Historic Landmark Commission unanimously voted to grant historic landmark zoning to Westgate Tower, the 1966-vintage condo tower between Lavaca and Colorado at 11th Street. Planning Commission and Council will vote next.
- it was designed by prominent architect Edward Durell Stone;
- it is an excellent example of the New Formalism approach to modern architecture;
- it was one of the first mixed-use high-rise buildings in Austin;
- it was an early innovator in the now-standard practice of perching a condo tower on a pedestal of parking;
- its height and proximity to the Capitol made it terribly controversial, and sparked the creation of the Capital View Corridors;
- it has been inhabited over the years by prominent state government leaders; and
- it was at one time the home of the Headliners Club.
Staff could have added that it is an excellent illustration of mid-century architectural flourishes such as the anti-pedestrian faux arcade. Here's the Lavaca streetscape:
The Colorado arcade is just a few notches removed from a blank street wall:
Westgate Tower is thus a nice counter-example to the principle that street-fronting, ground-floor uses make for pedestrian-friendly buildings.
This is gratuitous snarkiness because I don't really quibble with the Commission's finding that Westgate Tower meets the criteria for landmark designation. It is, in fact, listed in the National Register of Historic Places. And given the very low barthe city has set for historic designation in recent years, Westgate Tower is quite significant indeed.
The fundamental problem here is not the designation itself but the consequence of the designation. The designation comes with an automatic tax break of up to $2,500 in City taxes and up to $3,500 in AISD taxes. The staff report doesn't calculate the total loss to the city and schools from the designation -- which, frankly, is a glaring omission -- but we're talking serious money: if the 105 condo owners receive just an average of $4,000 each, that's $400,000 in lost tax revenue per year.
What, exactly, would we get for all this money?
The building is in no jeopardy of being demolished. Thanks largely to Westgate Tower itself, the northwestern and southeastern portions of the property are in a Capitol View Corridor and all of the property is in the height-capping Capitol Dominance Zone. It's a safe bet that no one will ever be able to build anything bigger there, and I seriously doubt whether it would be possible to squeeze in as much square footage as exists today.
I haven't tried to calculate the market value of the building. Assuming just an average of $400,000 per condo and ignoring common space and commercial space yields a total value of $41 million. In order to be redeveloped, someone would have to assume that the relatively small tract would be worth $41 million (plus cost of demolition) more with another building there. Land just isn't worth that much in Austin.
Even if someone did float a redevelopment proposal, it would have to get the assent of the condo owners. I don't know whether the condo declarations require a unanimous vote or merely a supermajority vote, but there's no way a rational offer would ever buy near-unanimous agreement among the condo owners to sell out.
And what if someone did make a crazy offer that the condo owners accepted? Because the building is now listed on the National Register, any building or demolition permit application would automatically go to Steve Sadowski, the City's historic preservation officer, who would put a hold on it for consideration by the Historic Landmark Commission.
There is simply no credible threat that the building will be demolished. The city is proposing to give away hundreds of thousands of dollars per year to condo owners for doing nothing other than continuing to own their condos.
The condo owners association tried to make a case that the building is under threat from rogue condo owners. From Infact Daily:
Ann Dolce, a director of the Westgate Condominium Association, said that throughout her 11-year board tenure she had seen many threats to the exterior of the building. She said the landmark designation would be a major tool to retain the design and integrity of the building.
Dolce cited as threats property owners’ requests to tint windows, install satellite dishes, enclose terraces and remove brick screening. She singled out the board’s greatest concern-- attempts by owners to purchase numerous units to obtain control and make decisions about the building.
If what we're buying is protection from minor alterations such as window tinting, then that's a pretty bad deal. Preserving the original window tinting on Westgate Tower or keeping it satellite-dish free isn't worth hundreds of thousands of dollars per year in tax breaks. Plus, chances are any alteration that would bug me very much would bug the other condo owners a lot more.
The root of the problem is that the City (and AISD) tax breaks are not tied to the cost to the owners of preserving the property. Tax breaks grossly undercompensate the owner of a run-down building on an underdeveloped piece of property. They grossly overcompensate the owner of a property that is already being put to its approximate best and highest use. The City’s one-size-fits all compensation policy gives neither the city nor the property owners the incentive to make the right decisions.
A better system would tie the City award to the owner’s actual cost. As part of its investigation into the landmark designation, staff should estimate the cost to the owner of any extra maintenance burden and lost development rights, using clear and well-articulated criteria. The City should then award a percentage of those costs when it landmarks the property, whether in a lump-sum grant or in the form of taxes rebated over a fixed period. The County and AISD could follow suit if they want.
The size of the award, naturally, would vary with the stringency of the restrictions. We might be willing to pay someone $10,000 to preserve the building in perpetuity but only be willing to pay $10 to keep satellite dishes off the roof. A flexible system would allow us to pick and choose how much preservation to pay for.
If that were the system in place today, then landmarking Westgate Tower would not be a controversial matter. The Westgate Tower condo owners would receive only nominal compensation for agreeing not to do what they won't be doing anyway. Under the current system, they stand to make a windfall for doing nothing other than buying into a politically savvy condo owners’ association.