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Will Tax Bill Eventually Deliver for CRE?
By Erika Morphy
December 17, 2010

The House of Representatives has sent legislation that extends the Bush-era tax cuts as well as several other business-friendly initiatives to President Barack Obama for his signature.

For the most part it is a mirror image of the $858-billion deal that passed the Senate earlier this week. The crux of the package extends the tax cut as well as unemployment insurance-along with a new 2% payroll tax reduction for all workers. Energy and other tax breaks that were expiring this year have also been folded into the package. Some House Democrats balked at the last minute, protesting a revision to the estate tax, which exempts families inheriting up to $10 million. Democrats did win some measures of their own, in the form of government spending on certain projects.

In the end, neither side was completely disgusted or totally enthralled by the bill, which has largely been pushed by the president and the Republican party. The Democrats see it as adding to the nation’s ever-growing national debt, but Republicans wanted the tax cuts to be made permanent instead of extended for two years.

For the real estate community as well as the debt and equity market, and particularly the residential market, the bill’s passage is a net positive, says Dennis Yeskey, senior advisor and leader of the commercial real estate practice at AlixPartners.

The bill cuts Social Security payroll taxes and extends jobless benefits, key tax credits and mortgage insurance deduction-basically, all of this means people have a little more money in pockets, he tells GlobeSt.com. “The theory is that consumers will spend that extra money which will help the residential real estate market, which has been really hurt by the downturn.” Also, in terms of commercial real estate, increased consumer spending will benefit retailers, which will help the retail real estate market and eventually industrial real estate.

Finally, Yeskey says, leaving capital gains rate the same through 2012 is very important to commercial real estate “very, very important. One of the reasons is that the rate on dividends will remain the same as well-the REIT market is really a dividend play and this has the potential to help the REIT market.” Also, the bill has extended bonus depreciation, says Harvey Berenson, managing director in the Business Tax Advisory group at FTI Schonbraun McCann Group in New York City. “The law also extends 15-year depreciation for qualified leasehold improvements. This will also encourage investment in rental property.”

The bill’s passage will also go far to improve the mood in the business community, which should help, observers say. In discussions with local real estate professionals, the primary benefit they see from the passage of this bill is the removal of a big near-term uncertainty, Edward F. Manzi Jr., chairman and CEO of Fidelity Bank, a Leominster, MA based community bank, tells GlobeSt.com. “Generally speaking, for the decision-makers in the real estate investment community, less uncertainty is better because they can complete analysis and move forward with more clarity,” he says.

Based on the overall dollars saved by the bill, it won’t promote new development in the commercial real estate industry, agrees Scott Spector, a principal at Spector Group in New York. “However, the perception will be very attractive to developers and end-users and this will help to provoke more much-needed activity across the industry.”

Perhaps the most intriguing-but also the most amorphous-benefit of the bill is its promise to increase employment. The package has been forecast to create 3.1 million jobs, Peter Cohan of Peter S. Cohan & Associates tells GlobeSt.com. Whether that is worthwhile from a fiscal perspective-those jobs are coming at a cost of $276,774 per job, higher than the $254,857 per job cost of the $787-billion stimulus bill-is debatable, he says. But from a pure commercial real estate perspective, those jobs will all require new office, retail and industrial space.

The bill just may push the economy towards the tipping point of businesses seeking to create jobs because demand is there for their products and services, Cohan adds. “We are not at that point yet,” he says. Even with a 9.8% unemployment rate, businesses are ringing up profits just fine.

But businesses may have to step up hiring if they want to save face-even if they haven’t reached the point of responding to growing demand. The 20 executives that met with President Obama this week promised that if the bill goes through they will be on the road to hiring people again, says Howard Hammer, of Fiske & Co., a CPA and consulting firm in South Florida. “I don’t see how it can’t help…the government is encouraging businesses to buy equipment, to grow, and that will require more employees and new hires,” he tells GlobeSt.com.

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As published in Real Estate Weekly
December 15, 2010
By Scott E. Spector, AIA

Nearly a decade has come and gone since the tragic events of September 11th, while New York City has gotten back to “business as usual,” we New Yorkers have certainly not forgotten what happened that day.

“One place where this is especially evident is in the lobbies of commercial and residential buildings, retail stores and banks throughout Manhattan, As an architect, I saw first-hand the reaction of building owners and managers after the terrorist attack: they wanted us to immediately incorporate high security into the design of their buildings.

Starting in the fall of 2001, requests for “in your face” security came pouring in.

Aesthetics were less of a concern, and the primary task: was a visible show of safety, from large, steel scanning identification booths and emergency concrete bollards to unconcealed cameras and desks for security guards to inspect bags and badges.

While these measures are still employed today – and are certainly appropriate for high-security buildings, such as the NASDAQ Stock Market space Spector designed with visible security in mind- many landlords are finding ways to combine safety and subtlety.

In other words, many of our clients are strategically incorporating security into design without going over the top.

The level of such security varies vastly by building use. In Class B office buildings, individual tenants may take a more active role in being responsible for the security on a floor-by-floor basis, with only a minimal amount of support from the management.

For the tenants of Class A buildings, high-tech turnstyIes and even X-ray machines may be de rigueur. However, landlords and building owners are hardly becoming lax in their security demands. The measures are just as stringent as they were following September 11th, but the way they are being implemented is less reactive. Spector’s clients are – now that the urgency is less severe – becoming more mindful of the tenant and visitor experience.

The badging process has become more streamlined at many of the city’s most high profile buildings, and the apparatus itself has become less clunky. The trend has shifted from the use of lots of steel, a visible sign of strength and defense, to transparent glass tumstyles. The design aesthetic is more minimal than massive.

In many midtown Manhattan buildings, the design carries visitors into separate elevator areas, where they can themselves in and security can intervene only as necessary. These spaces are just as secure, but certainly more inviting and elegant Security is being woven into the architecture, rather than placed there after the fact. Large bollards or planters are being preplanned into the program, rather than placed on-site as an afterthought. At Spector, we are being awarded projects that call for a lobby, plaza or storefront retrofit or redesign which is the perfect time to make such security-related changes.

Another minimally invasive way that security can be embedded in design is by being mindful of customer flow and security staff view lines. For instance, at the recently completed space Spector created for Christie’s Fine Art Storage Services’ (CFASS) in Brooklyn, we worked around the industrial factory’s existing structural conditions to promote the smoothest possible flow of traffic for visitors and staff, particularly in the lobby and corridor areas. This smart design complemented the high security technologies utilized by the client, and optimized the efficiency of them to best protect the client’s multi-million dollars; worth of fine art, antiques and collectibles.

The balancing act bas begun: tenants want to feel secure but without “seeing” that security everywhere they go. A security desk where they are greeted, but the security equipment itself is hidden beneath the desk, allows for
that, as does separate “security suites” where visitors to a building can be badged and directed without breaking up the everyday flow of traffic and causing undue concern.

IT consultants, or in-house IT directors, play a vital role in making security more aesthetically pleasing. Spector recently worked closely with IT consultants as part of a team charged with retrofitting the lobbies of two New York City banks.

Finishes were revamped, the spaces were modernized and the security was stepped up five notches in each branch, but you would never know about the changes to security level by looking at the spaces. All technology was hidden from the end user’s view, with no turnstyles or visible cameras in sight.

Another perfect example of incorporating security in design from the get-go is the new Bank of America tower in New York City. Hidden barriers and mantraps were a part of the design of its loading docks and wisely placed, technologically advanced camera systems and infrared video and motion detectors ensured top-notch security for some of the city’s most prestigious financial firms, but not at a cost to the design scheme.

Security is, and will always be, necessary, but one thing it does not need to be is intrusive. The move towards smoother, more subtle security, where appropriate, is a step in the right direction, and one that an architect can assist a client in making.

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On Wednesday November 17, 2010 at the Chateau Briand located in Carle Place, Long Island, the Nassau County Enforcement Exploring honored “Persons of the Year” Michael Harris Spector FAIA and Marc B. Spector AIA.

Law Enforcement Exploring is a community service, career oriented program designed to educate young men and women, ages 14 (and have completed eighth grade) through 20 years old about Law Enforcement. Nassau County currently has over 300 young men and women in the program.

Other Honorees included:
Nassau County Law Enforcement Exploring Emissary
Peter Guggenheim, Director
Nassau County Law Enforcement Exploring and Executive Vice President Nassau County Police Reserves

Theodore Roosevelt Award
Senator Charles Fuschillo and Senator Dean Skelos

Special Appreciation Award
Lorna Y. Atmore, Deputy Inspector and Robert Graves, Police Officer
Nassau County Police Department

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December 7, 2010
By Lois Weiss

Auto Row along 11th Avenue is turning space age as newly remodeled and created car dealerships perk up the aging infrastructure.

Manhattan’s auto industry is digging in for the long haul, said Michael Laginestra, vice chairman of CB Richard Ellis. “It continues to reinvent itself on Eleventh Avenue.” Manhattan Auto Company has Ford, Volvo. Jaguar, Land Rover and Mazda in 360,000 square feet between West 54th and 55th Streets. Its 1928 facility, originally designed by architect Albert Kahn for the Packard Motor Car, was updated at a cost of more than $15 million in 2004.

“We were the pioneers of the renovations on Eleventh Avenue,” said Gary Flom, Manhattan Auto Company’s CEO. “I looked at other businesses in Manhattan, at the Bergdorf Goodman and the Tourneau Time Machine, Customers already have a level of expectation in Manhattan so we set our facility design and processes
on meeting future needs.” While Volkswagen and Audi are now retrofitting the former Potamkin building, most eyes are glued to the new Two Trees Management staggered
height apartment tower on the east side of 11th Avenue between West 53fd and 54th Streets.

Here, Mercedes Benz is building out a company-owned entirely new showroom and service area – mostly underground. Laginestra and CBRE colleague Michael Geoghegan represented Mercedes in this year’s approximately $190 million purchase of the 335,000 square-foot retail condo unit at 710 11th Ave, The $30 million facility will replace its current dealership on West 41st Street – by the entrance to the Lincoln Tunnel-and is expected to be open in 2Oll.

Mercedes-Benz USA President and CEO Ernst Lieb said the “Autohaus project” involves both brand elements as well as architectural designs that are oriented around creating more transparency, comfort and convenience for the customer.

“We are creating an all-new MB Manhattan dealership to shine as the jewel in the crown of the network,” Lieb said when announcing the project.

According to architect Scott Spector of The Spector Group, the new Mercedes showroom will have three stories below grade and two above. Spector worked closely with developer Two Trees and its owners rep. Gardiner & Theobald, on overseeing the construction.

“Our role was to make sure…Mercedes got what they were supposed to get [architecturally].”

Spector also designed some of the interior spaces to Autohaus design standards. This company owned dealership will become the flagship of the Mercedes Benz Autohaus initiative. “a new set of design standards geared toward optimizing the customer’s experience with the dealership.”

The main showroom on the ground floor will be all new car sales that will include both Mercedes-Benz and Maybach. The first level will have the service write-up area along with a locker room. The second level will have pre-owned sales.

A “feature wall” will showcase new products, the Mercedes-Benz racing heritage and show historical footage. New technology will permit customers to design their dream car.

A unique double helix ramp connects all the levels and to traffic from both side streets, a mirror image of what was built in Germany for one of the main Mercedes facilities in Munich.

The dealership is the fifth-largest in the country for new vehicle sales and more than 253,000 cars were sold in the US in 2007.

(To read entire article, please view it here: http://www.spectorgroup.com/content/publications/0000/0060/VWAudi.pdf )

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2010 American Institute of Architects Design Awards

On November 4, 2010 at The Inn at New Hyde Park located in New Hyde Park, the American Institute of Architects celebrated an evening full of festivities as they commemorated outstanding architectural achievement through Architects and Architecture.

We are pleased to announce that Spector Group received three design awards.

Commendation: The Renaissance at McGinley Square

Furniture & Furnishings Award: Nathans Famous Inc.

Color Award: Private Duplex Residence – Park Avenue

Spector Group also nominated Edward P. Mangano, Nassau County Executive for the Legislator Award (presented to a Legislator who has assisted in sponsoring bills that benefit the health, safety and welfare of the community) and Scott Rechler for the Benefactor Award (presented to a public group, private individual or group of individuals or corporation who has sponsored and supported distinguished works of architecture on Long Island). Both gentleman won the 2010 Honor Award.

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Nathan’s HQ Goes Modern
Long Island Business News
by Gregory Zeller

Q: What did the Zen master say to the hot dog vendor?

A: “One with everything.”

That old gag became a bona fide challenge for Nathan’s Famous last year when the wiener king decided to modernize its headquarters. The lease on its decades-old Westbury HQ was expiring and Nathan’s had found its new home, roughly 12,000 square feet inside Jericho Plaza One, but considerable renovations were required and Nathan’s was committed to one overriding theme: It wanted everything.

A progressive, productivity-based design. A modern space incorporating current technologies and welcoming new ones. Improved public accessibility. And all of it with a nod toward the company’s century-long standing as an iconic American enterprise.

“We really needed to contemporize,” said Don Schedler, Nathan’s vice president of development, architecture and construction. “We had a lot of closed offices and we were always adding a little here, a little there, taking offices across the hall. After 20 years, you wind up with a space that’s very different from the one you started with, and pretty outdated.”

After choosing Jericho Plaza, Nathan’s spent months formulating a dream plan that covered critical needs and wistful hopes, but repeatedly fell short. It finally turned to Woodbury’s world-famous designer of corporate cribs, the Spector Group.

Spector was uniquely qualified for the job. It had designed the 250,000-square-foot Jericho Plaza One and the similarly scaled Jericho Plaza 2, and boasted a long history of successful corporate HQ projects, including ground-up design of CA Technologies’ 1.1-million-square-foot Islandia facility in 1994 and the 1999 renovation of Sbarro’s 125,000-square-foot Melville mothership.
Recognizing Nathan’s concern for aesthetics, Mannetta locked himself in a room with Schedler and started drawing. “Nathan’s is New York,” the architect noted. “It’s representative of a time and place … the 1920s and ’30s, black-and-white photos of the boardwalk, all that. People love that about Nathan’s. So how do you keep that, and not make it look like time has passed them by?”

For more on this article, please see our Publications – Inside Spector.

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Spector Group has been named executive architect for the Volkswagen Group of America’s new, full-service dealership in Manhattan, at 798 11th Avenue. The 260,000-square-foot facility will house new and certified pre-owned cars from Volkswagen, as well as its luxury, sister-brand Audi. The renovation of the existing building — once home to Potamkin General Motors — is now underway and is slated for completion in mid to late 2012.

“It is an exciting opportunity for Spector to work with Volkswagen Group of America in creating an aesthetically pleasing, state-of-the-art dealership for these two brands,” says Spector Group Principal Scott Spector, AIA. “Our skilled design and project management team and proven successful track-record contributed to this project award.” Spector’s expertise in automotive showroom design is further underscored with its design of other high-end dealerships along 11th Avenue, which have previously been featured in The New York Times.

Working alongside Volkswagen’s design/brand architect Cityscape Architects, Inc. and Audi’s design/brand architect CR Studio, Architects, PC, Spector is seamlessly transforming the client’s new facility to fit with the national image of its dealerships. The collective design team will interpret conceptual base designs and work to realize them. Once the metamorphosis is complete, Volkswagen will occupy six floors of space, along with the building’s roof and a portion of its cellar.

Spector will blend the existing and new exterior façade with the interior design as part of its work for the Volkswagen Group. Flexibility will be a key component of the design scheme, so that additional showroom or parking space can be easily converted from its existing use, as needed. The space will also boast the latest in eco-friendly technology, utilizing green materials in every finish — from floor to ceiling — and meeting or exceeding standard United States energy codes.

Spector is working in cooperation with Construction Manager J.T. Magen & Company, CB Richard Ellis and both design/brand architects on the project.

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Real Estate Reporter Jill Urban interviews Marc Spector on whether homeowners should tackle a renovation themselves or involve an architect. Marc Spector gives honest and thoughtful advice on the topic.

You can listen to Marc’s interview here.

http://www.ny1.com/content/126812/an-architect-is-not-always-necessary-for-a-renovation

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As published in the September 2010 Issue – New York: In Living Color

For full article go to the following link http://www.spectorgroup.com/content/publications/0000/0055/Interior_Design_-_Nathans.pdf

The City That Never Sleeps
Wakes Up

It’s been a tough two years. But designers working in New York are a tough bunch. To find out how you’ve been faring, we sent out a survey, and the 70 responses we received prove that, no matter how grim the circumstances, the fighting spirit of the A&D community cannot be kept down for long. Many of you can point to substantial projects here that are either finished, on the boards, or green-lighted. The following pages showcase 18 of the most exciting-we just had to share the good news. – Annie Black

Nathans Famous…
“After 25 years, it was time for Nathan’s to move to a new headquarters – where the logo’s long-standing mustard yellow and kelly green are updated with notes of lemon and wasabi”