PlaceEconomics Blog

This blog is the lessons learned from cities, clients, and students about what makes good cities, about historic preservation, about downtown revitalization and about economic development based on my work and travels throughout the US and elsewhere.

Saturday, January 31, 2009

World Monuments Fund, Time Honored, and John Stubbs

In 1965 a new historic preservation organization was founded - the World Monuments Fund. In the 40+ years since its founding, few organizations have had as large an impact internationally on our built cultural heritage as has the WMF.

While the WMF has numerous programs and projects, its largest and best known is the biennial World Monuments Watch. Every two years since 1996 WMF publishes and broadly publicizes its list calling "international attention to cultural heritage around the world that is threatened by neglect, vandalism, conflict or disaster."

Since this program began, nearly 550 sites in 79 different countries, on every continent (yes, including Antarctica) have made an appearance on the list...a few more than once. While the primary purpose of the list is to bring to the fore imminent risks to the built heritage of our world, the WMF does more than point out the problems. Nearly half of the listed sites have received funding which over the years has totaled more than $50 million in WMF grants which have leveraged investment by others of over $150 million.

Reflecting the incredible diversity of the world's cultural heritage, listings have ranged from such international icons as the Taj Majal and Angkor Wat to far less known sites such as Levuka Township in Fiji and the Humberstone and Santa Laura Industrial Complex in Chile. To get a sense of the range of sites one only needs to look at the 2008 World Monuments Watch list of Most Endangered Sites.

Because of the magnitude of this effort, WMF begins soliciting nominations for the next listing nearly two years in advance. Already accessible are guidelines for nomination for sites for the 2010 list, which are available in English, Arabic, French, Italian, Spanish, and Chinese. Anyone - government, NGO, private person, local organization - can nominate a site, but now is the time to act. The deadline for submission of the nomination and related materials is March 15, 2009, so get moving!

Why has the World Monuments Fund become so successful? I think there are four reasons; 1) they have a fundamentally good idea; 2) they know how to partner; 3) they bring significant resources (both human and financial) to the table; and 4) they have a superb staff.

Although it is a non-profit organization (NGO) the World Monuments Fund operates like a great entrepreneurial private sector company. And they have identified this "niche" in the market that no one else is as comprehensively filling.

The partner list of the WMF is extensive and varied and ranges from American Express, the Aga Khan Trust for Culture, the World Bank, and the Getty Conservation Institute on the international level and hundreds of national, regional and local governments and organizations around the world.

I noted earlier the direct grants WMF has made and the additional dollars those grants have catalyzed. But on other projects they also bring expert technical skills to address the specific issues of a particular site.But of the four reasons for success perhaps the most important is the people of the WMF. President Bonnie Burnham is the personification of the adjective indefatigable. Executive Vice President Lisa Ackerman came to the World Monuments Fund from the Kress Foundation, is well known in historic preservation circles and was the first recipient of the Ann Webster Smith Award for International Heritage Achievement given by US/ICOMOS. Recently joining WMF as Director of Research and Education is Erica Avrami about to finish her PhD at Rutgers University and with previous experience at the Getty Conservation Institute, as a preservation consultant, and as an adjunct faculty member at Pratt and the University of Pennsylvania.

But also at the WMF (and here's the disclaimer - he's a long time friend) is John Stubbs. I highly doubt that there is another person on the planet who has physically been to as many sites of international cultural importance as has John. I don't know if there are any of the sites that have been listed on the Monument Watch that John has not visited, but if there are any, damn few.

So John has put this incredible hands-on experience into a new book - Time Honored: A Global View of Architectural Conservation. If, anywhere in the world, you are teaching a course on international heritage conservation, this should be your core text. If you are a student in historic preservation and have an interest in international issues, buy this book. If you are a professional, a civil servant, an interested amateur, or an advocate for cultural heritage in your own country, but want to understand your efforts in an international context, this book should be your next read.

The book ranges from the academic (Nomenclature Used in International Conservation Practice) to the theoretical (Who Owns the Past?) to the history of conservation (The Forging of a Discipline: The Late Eighteenth to Early Twentieth Century) to the very practical (Options for Involvement).

There is one downside to reading the book, however. Looking at the photos of places John has visited and sites that have been assisted by the World Monuments Fund, you'll wish you had his job.

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Friday, January 30, 2009

You've Come a Long Way Baby (or not)

Back in the late 60s when the Women's Movement was becoming an important and influential voice in American politics, life and culture, the ever opportunistic tobacco industry leaped into the fray. Philip Morris introduced a new brand of cigarettes - Virginia Slims - specifically targeted toward women. And the slogan? "You've come a long way baby."

There are times when I think that the historic preservation movement has come a long way...when I hear the success stories of local Main Street programs; when I attend the awards banquet of a statewide preservation organization; and particularly when I teach my Spring semester course at the University of Pennsylvania. All those really bright and (mostly) young people preparing for careers in historic preservation. Every year I learn far more from them than they ever learn from me.

But other times...well, we haven't come so far after all.

This morning up pops this news story, headlined "Mayor rejects downtown preservation efforts". But the headline itself wasn't the biggest issue. While usually preservationists try to do their best, there are circumstances where the preservation proposal of the day might merit review or dissent from an elected official...it's how democracy does and should work.

No, it wasn't that Mike Hadick, Mayor of Albion, New York (population 7700, 1400 of them guests of a State women's prison) didn't like some particulars in a proposed preservation ordinance. No, it was his reasons:

1) Young people are leaving Albion because "people don't want to live in an outdated village"

2) He didn't like the fact that the Preservation Commission denied a Certificate of Appropriateness for a sign Verizon wanted to put in their Main Street store. So, of course, Verizon went to the Mayor and he approved the sign.

To all of this Mayor Hadick said he would "prefer the collection of historic downtown structures be leveled to make way for a new commercial district." And as for the downtown "I can live with brand-new buildings."

Mayor Hadick's reasoning is, "You can't have a [preservation] commission that's not looking out for the businessman first. The way times are right now, do you really want to mess with a businessman?"

Well, as a private sector guy myself, I'm certainly for considering the needs of "businessmen". But who in the hell is going to build a new downtown in Albion, New York? Where's the debt going to come from? Where is the equity going to come from? Where are the rents to justify new construction going to come from? Where's the pent-up demand for new commercial space when there have been 5 or 6 building permits issued in the last four years in Albion? Who are going to be starting those businesses to pay those rents in that new downtown?

Here's an oversimplified formula for you. Let's say you get the land for free in downtown Albion (maybe the stimulus plan will provide the local government with all the money it needs to acquire and raze every building in downtown). Now you build a new building, even one of mediocre quality - one story, concrete block, and stick on some z-brick and Styrofoam beams. What's that going to cost? I don't know, let's say we can do it cheap for $125 per square foot. Now what will the rents have to be? Well, if the banks choose to lend and the investors choose to invest, and if this economic chaos is over...you'd need rents of around $20 per square foot per year. Is that what the rent levels are in downtown Albion, Mr. Mayor?

I honestly believed that the Urban Renewal approach of "Let's tear down this old crap and the developers will be lining up for the chance to build new" having been proved such a disaster, would no longer be the vehicle of choice for any elected official. Well, once again, I was wrong.

If there were an assembly of absurd idiocies, "young people are leaving town because of these old buildings" would certainly make the collection. You don't think that high unemployment, low wages, and limited opportunities for higher education might not have something to do with it Mr. Mayor? That is as misguided as the Virginia Slims implication that women would be independent and cool if they smoked skinny cigarettes.

I have great sympathy with small towns struggling for economic survival and have worked in probably a thousand of them in the last 25 years. But I'll leave it at this...show me the small town that came back to prosperity by tearing down their historic downtown and someone building them a brand new one.

While we still have mayors who haven't learned that yet, we as preservationists haven't done our job. We haven't come that far, baby.

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Sunday, January 11, 2009

The Magnitude of Numbers and the Stimulus Plan

Some people learn through words. Some people learn through pictures. Some people learn through numbers. I'm a numbers guy.

But big numbers, really big numbers, often lose their significance because we just can't comprehend that many zeros.

And that's what's happening with the stimulus plan(s). They will end up being $2 trillion (that's trillion with a T) before we're done. The first components were the $150 billion tax rebate last spring and then the $750 billion bailout from October. In the next week or so Obama will introduce his $775 billion program and there will be more before we're done. So let's just say $2 trillion.

How much is $2 trillion dollars? Well it would be enough to have paid for:
  • the man on the moon project, plus
  • the entire Interstate highway system, plus
  • the Vietnam War, plus
  • the first Gulf War, plus
  • the entire budget for the United Nations for the next ten years, plus
  • all the tax act historic preservation projects of the last 15 years, plus
  • the entire Gross Domestic Product of Canada
and there would still be enough left over to pay this year's room, board and tuition for every college student in America.

So a bit of money.

Saturday President-elect Obama said that his stimulus plan would create 3.7 million jobs. It's going to cost $775 billion. But here's the calculation he didn't make. That works out to around $209,000 per job created. I want one of those jobs!

Now don't get me wrong, the stimulus plan is crucial. But let me make a small comparison. There's already a stimulus in the US tax code. It is a tax credit for the rehabilitation of historic buildings -- to "stimulate" private capital to invest in heritage resources. And like any stimulus program it has a cost -- $6,873 per job created.

Let me see....a financial stimulus for $209,000 per job or one for $6,900 per job. Which is giving the taxpayer the biggest return?

Or we could put that in slightly different terms. Based on the Obama figures every $1 million spent in his stimulus plan creates around five jobs. Every million that the historic rehabilitation tax credit costs creates around 145 jobs. I'd like to say "you do the math" but I've already done the math.

The stimulus plan is necessary, but please understand these two things: 1) 100% of the stimulus is coming from borrowed money, and 2) if you have a child or a grandchild who is 5 years old today, they will spend their entire working life paying off this bill.

So it sure as hell better be well spent.

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Thursday, January 8, 2009

What's Good for Preservation is Good for the Greens

I have ranted with regularity that the environmental movement as a whole absolutely does not get the connection between historic preservation and sustainable development. But there are notable exceptions. One of them is Knute Berger who is, among other things, an environmental journalist in Seattle. He writes for a couple of publications including the online periodical Crosscut.

A week or so ago Knute was preparing a two-part article about preservation issues that will be facing Seattle in 2009. As part of his research he emailed me some very thoughtful questions. With Knute's permission I'm including below both his questions and my answers to them. I knew at the time that my answers were far more than Knute needed or wanted. But his questions were so good that I answered them more fully than he needed, but for as much as clarifying my own thinking as for his use.

Read the below if you wish, but certainly read Knute's two-part series. Part 1 is entitled "Recession, wrecking balls, and history" and Part 2 is headlined "What's Good for Preservation is Good for the Greens" which I've stolen from Knute as the title of this blog. While the articles are specifically about Seattle, many of the issues raised will face many American cities.

By the way, Knute has a new book out entitled Pugetopolis: A Mossback Takes On Growth Addicts, Weather Wimps, and the Myth of Seattle Nice, published by Sasquatch Books. I have to think it will be a great read.

Anyway, below are Knute's great questions and, for what they are worth, my answers.


I checked your blog and saw an entry from August about the Obama campaign being preservation-friendly. Is that still your view? Is there anything tangible that would indicate how that could take form in '09?

I think there is at least a chance that this new administration will be good for historic preservation for a number of reasons. First, Obama is going to establish an office of urban issues within the White House. While there are certainly wonderful historic resources in this country in rural areas, most of them are in cities. And for anyone with a more macro view of things, historic preservation and urban quality go hand in hand. Historic preservation is certainly not the solution for every urban problem, but it is part of the solution for most of them. And Obama is nothing if not a sophisticated, nuanced thinker.

Second, potentially is Michelle Obama. In the Clinton years Hillary Clinton was a big preservation supporter through the Save America’s Treasures initiative. Laura Bush followed that tradition and established the Preserve America program. A bipartisan bill was introduced in the last Congress, co-sponsored by Senator Clinton and notably supported by the First Lady. The bill would make those two programs permanent within the federal structure. The "champion of American cultural heritage" mantle is one that Michelle Obama could take for herself and that would have significant benefits both for historic preservation and for the future First Lady.

Third, Obama has included in his list of stimulus programs retrofitting buildings for energy efficiency. If that initiative isn't hijacked by green gizmo manufacturers, historic preservation can play an important part.

Is preservation the kind of economic booster/shovel-ready work that could be part of the new administration's economic package?

Absolutely, and it should be front and center. And others in the world are beginning to get that. In March there will be a hearing at the European Parliament on Heritage Conservation as a Counter-Cyclical Economic Development Strategy.

I wrote a blog about the criteria for the stimulus package that you may or may not find useful. But my basic argument is: 1) because it is my grandchildren who aren't even conceived yet who will be paying off what will end up being $2 trillion in additional Federal deficit spending, we at least ought to make investments with that money from which they will derive some benefit; and 2) the components of the stimulus plan should advance a comprehensive sustainable development approach.

But, unfortunately, it appears that the bill has simply become a Christmas tree with every imaginable interest group saying, "We'll help the economy. Give a couple billion of that money to us." That represents the pork barrel approach that we've seen far too much of in recent years and certainly not a "change" approach that Obama promised us. There ought to be an established set of principles as to how that money should be spent. And if there were, I have no doubt that historic preservation would emerge as a priority.


Also, I wondered if you had anything to say about the state of relations between greens and preservationists. Seattle will get the National Trust Green Lab in '09. Is there anything there we should be watching for?

That's a tough question but, I have to say, I do see some positive signs. But as usual, it's from the bottom up, not the top down. Look, maybe 10% of what the environmental movement does advances the cause of historic preservation. But 100% of historic preservation activities advance the cause of the environment. But I see no movement at the leadership level of organizations such as the Nature Conservancy or the Sierra Club to understanding that at all. It looks like to me the US Green Building Council is taking the "check is in the mail" approach, promising more sensitivity to historic buildings, "in our next revision". I, frankly, haven't seen much movement there beyond lip service.

But more and more environmental journalists such as you and Lloyd Alter at Treehugger, are at least beginning to reflect the argument that "green" is more than solar panels and that existing historic buildings contribute significantly to environmental responsibility.

And then there is a handful of architects, planners and academics who are quickly moving to the sustainable development approach that recognizes there are far more components than just green buildings.

As to the National Trust's Sustainability initiative, its whole original premise was "Beyond Green Buildings". Hopefully the Seattle Green Lab will finally do that. We'll see.

Be curious if there's anything else on your radar for '09 too.

If there is anything that the economic chaos of 2008 should teach us, it is that we absolutely need to adopt a sustainable development strategy that includes not only environmental responsibility, but economic and social/cultural responsibility as well. Einstein was once quoted as saying, "Things should be made as simple as possible but not more so." Thinking that a green building approach is sufficient for sustainable development is vastly and myopically oversimplifying the complex challenges ahead of us.

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Saturday, January 3, 2009

New Year's Resolution and a List

I'm not really one to make New Year's resolutions...I'm too irresolute for that I suppose. But I do have one for 2009 - be more diligent about writing this blog. I am really lucky in the places I get to go, the people I get to meet, and the lessons I get to learn. And, frankly, it's a bit selfish of me not to share all three.

But here's what I've learned in writing a blog over the last 9 months: 1) it takes me much longer than I would have anticipated. Between writing, editing, posting, and then correcting the sloppy format I always seem to end up with, it takes me a couple of hours to get one of these short pieces up. 2) When I'm traveling, if I don't post within a day or two of wherever I was, I absolutely forget the nuances of whatever it was I found interesting or new or challenging. So somehow I have to find the self discipline (never one of my strong suits) to get these missives written quickly. I'll work on that.

In the meantime, as many of you have heard me say over the years, what I really am is not an economic development consultant, or preservationist, or real estate consultant or economist, but a list maker. I tend to think in lists.

So the first blog of 2009 is one of my lists -- 20 things we've learned about historic preservation.

1. Not every historic building can be adapted for every use, but the vast majority of quality historic buildings can be adapted to the vast majority of uses.

2. You can nearly always build something cheaper than you can do a complete renovation; but if quality is part of the equation, historic preservation is a cost competitive alternative.

3. The more similar the adaptive reuse of the historic building is to the original use, the more cost effective the rehabilitation will be.

4. The cost competitiveness of rehabilitation versus new construction is distorted when the costs of demolition and disposal are not included in the new construction cost estimates.

5. The remaining economic life of a quality rehabilitated historic building is not measurably different than the remaining economic life of a quality new building.

6. Rehabilitation will be more labor intensive (60/40) then new construction (50/50) which results, dollar for dollar, in a significantly greater local economic impact from rehabilitation project.

7. There has never been a major preservation success story where, before the project began, some building inspector, architect or structural engineer didn't claim, "This building has to come down - it's on the verge of collapse." Rarely, in fact, is that true.

8. Architects, contractors, trades and structural engineers who are experienced in rehabilitation projects will be much more creative in addressing problems and cost effective in construction than will those professionals who deal primarily with new construction.

9. It is nearly always a mistake, both functionally and economically, to try to force the interior design dejure into a historic building. It is neither "form follows function" nor "function follows form" but accommodating the necessary functions creatively into the existing form.

10. 90% of historic preservation projects fit seamlessly into the existing physical context. Maybe 20% of large new buildings do.

11. Items likely to cost more in total rehabilitation projects on a component-pricing basis are: interior construction, conveying, mechanical, general conditions. Items likely to cost less include: foundation, superstructure, exterior, roof structure. Items likely to be equivalent: substructure, electrical, architect.

12. Projects not requiring total renovation will be much more cost effective than even moderate quality new construction.

13. "Functional obsolescence" in historic buildings is far more often a conclusion drawn from unchallenged conventional wisdom than from reality and usually is much more indicative of designers either not experienced in rehabilitation projects or lacking in imagination.

14. Technological innovations are steadily increasing the comparability of rehabilitation to new construction in systems and environmental response. At the same time historic buildings were designed to accommodate the local environment and there are important lessons to be learned from them.

15. As the time horizon for building use and ownership lengthens the relative advantage of rehabilitated historic buildings increases. Therefore institutional ownership (which has a long-term investment horizon) of rehabilitated historic buildings often makes more relative sense than it does for those with a short-term investment perspective.

16. The cost effectiveness of historic preservation as part of an urban revitalization strategy far surpasses the "tear down and build up" urban renewal mistakes of the past.

17. Historic preservation is a core element of an environmentally conscious, stewardship minded public policy.

18. There are uncertainties with historic preservation and the unexpected will happen - things will go wrong. Experienced architects and contractors understand, however, that while some things will go wrong, everything won't go wrong.

19. Historic preservation provides connection and continuity to the local culture.

20. We know what the most expensive mistakes are.

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