De facto eminent domain

Building owner Ricky Wong is being shafted by NYC’s Landmarks Preservation Commission, but it’s his fault because he should have known better than to think that “the land of the free” was anything other than an empty slogan when it comes to property ownership.

As the Real Deal reports:

Five months after the Department of Buildings approved his proposal for renovation, Wong received a letter on June 7 from the [LPC] commission telling him that they wanted to designate his three-story building — a specimen of the early 19th-century Federal style — as a city landmark. That designation would likely prevent Wong from adding four stories, a project he’d been planning since he bought the building in 2003.

In contrast to the vanilla eminent domain takings, Landmarks is the fullest expression of centralist planners to control and shape the living environment of society to their whim but at your expense. In the standard eminent domain scenario, the owner can at least expect some monetary compensation for the theft forced transfer of his property. On the other hand, when a building is subject to a Landmarks designation, the legal owner ?remains, but in reality he is reduced to the role of an unpaid property custodian for the city government.

He may no longer do whatever he feels is the best and highest use of his property. Any minor renovation or visible alterations to the exterior will have to wait for a committee hearing with all the requisite filing fees, architectural drawings and paperwork filings in the meanwhile. Potential business lessees that may have an interest in the retail space will have to file proposals with Landmarks which include architectural renderings of the intended build-out in order to obtain approvals that certify that their usage and signage is in conformity with Landmarks’ tailored material and color lists, often with attached samples of awning fabrics or paint colors. None of this comes cheap of course. Many potential businesses balk at the steep barrier of entry and seek less prohibitive locations.

Like any city with zoning restrictions, the sales price of a building is determined not only by the existing structure, but what can be built given the zoning envelope. It is reprehensible enough that zoning regulations are the norm, but it’s a lot worse when someone purchased something with the reasonable expectation that they would be able to profit by maximizing the structure within the proscribed limits and find themselves in a situation quite beyond their control in which not only will they not profit, but stand to lose based on how much they will have overpaid for that property.

The NY Observer notes that:

In the months since January, Mr. Wong hired an architect and gutted the structure, knocking down all interior partitions. But then, on June 7, the LPC sent a letter.

“I spent all the money already,” Mr. Wong said. “And now they turn it into a landmark. I have no idea how they want me to do it. Of course, I don’t want it to be a landmark building. Then all my money is gone.”

Mr. Wong bought the building with the expectation of adding on additional stories. He was willing to pay the price based on this assumption, a quite normal one. But when some overly-nosy neighbors got wind of his plans, they contacted the commission in the hope of stopping the project, one they did not desire in their neighborhood among a number of others.

If the building is ultimately designated a landmark, Mr. Wong will have lost much his invested money and time, something which should trouble anyone who stands for private property rights.