Historic Bank Buildings Get a Second Act

https://www.nytimes.com/2019/04/19/realestate/historic-bank-buildings-get-a-second-act.html

Version 0 of 1.

The fate of the soaring, palatial and utterly impractical Dime Savings Bank in Downtown Brooklyn was inevitable.

The 16,750-square-foot, 40-foot-tall chamber, with seven kinds of marble flooring, a vaulted-tile dome and Corinthian columns, closed in 2016, a victim of automated tellers and digital payments. Its last full-time tenant, Chase Bank, moved into a squat storefront across the street, about one-tenth the size.

The bank’s second act is more surprising: It will become part of Brooklyn’s tallest skyscraper, 9 DeKalb, a 1,066-foot luxury apartment building with retail at its base. The landmark Beaux-Arts interior will be transformed into a flagship store, and the roof will become an outdoor lounge with a pool that wraps around an ornate Guastavino dome. The marble and pink granite facade will be fused on one side to a slender glass-and-steel tower designed by SHoP Architects, which will have about 425 rentals and 150 condo apartments.

Across the city, a number of old banks are similarly gaining new currency, as developers search for prime sites at a time of near-record land prices. In the past, the scale of these conversions was often smaller — perhaps a handful of apartments above a bank hall, or a drugstore with incongruously ornate chandeliers. Now, thanks in part to residential demand in quickly gentrifying areas, the projects are becoming more ambitious.

“The market continues to be hungry for development opportunities, and these represent niche plays,” said Jonathan J. Miller, a New York real estate appraiser, who added that he noticed a similar trend near the peak of the 2007 housing bubble. There is the same glut of supply now, and developers are hoping the prestige of these buildings will pay dividends.

Historic banks in New York are rare. There are roughly 81 landmark banks in the city, said Sarah Carroll, the chair of the Landmarks Preservation Commission. That designation requires developers who want to alter the facades — and in the case of 13 banks, the landmark interiors — to receive permission.

While the commission does not track the current use of these buildings, most of those designated as landmarks are in Manhattan and Brooklyn. Many other historic bank buildings don’t have protected status, and their original reason for being no longer exists.

“The issue is really analogous to churches — opulent spaces that were built for what was then a very widespread need,” said William Higgins, a principal at Higgins Quasebarth & Partners, a preservation firm that has consulted on a number of bank conversions. “That need recedes, and what’s left on the shore are these spectacular buildings that have lost their purpose.”

In Chelsea, the 1897 New York Savings Bank became a carpet store in the late 1980s, a gourmet grocer in the mid-2000s, and is now a very stately CVS pharmacy. The 1906 Williamsburg Trust Company, an imposing temple to commerce at the foot of the Williamsburg Bridge, became a Ukrainian Orthodox Church in the 1960s. Until last year, the former Corn Exchange Bank on 42nd Street housed Show World Center, an adult-entertainment relic from the old Times Square. Now it is becoming offices.

But there is value beyond a bank’s bricks and mortar: the air space above it. Most of the grand bank halls in the city were built before changes to zoning that allowed for greater height and density. By buying the unused development rights, or air rights, above a bank, a developer may build bigger, taller or both on an adjacent lot. That the banks are often in commuter-friendly business hubs also makes them appealing for redevelopment.

In South Williamsburg, Brooklyn, a 23-story tower is rising beside the landmark 1908 Dime Savings Bank. The developers, Tavros Development and Charney Construction & Development, bought the adjacent lot as well as the bank’s air rights for $80 million, in 2016. The purchase allowed the developers to add 20,000 square feet of floor space to the new tower, making it one of the tallest in the neighborhood. There will be retail and office space on the lower floors, topped by 177 rental apartments, 30 percent rented below market rate. The tower, called the Dime, is expected to open in late 2019.

In 2017, the developers convinced the branch owner to sell the neo-Classical bank hall outright for $12.3 million, allowing them to incorporate the building into their design. The 40-foot-tall interior space, with mullioned windows and decorative columns, will either become an office or retail space, a beer garden or restaurant. (Only the facade has landmark protection.) The roof will become part of an outdoor amenity for residents and office workers, with views of the Williamsburg Bridge. Amenities in the adjoining tower will include an indoor basketball court, yoga room and outdoor “misting stations” to cool down sunbathers.

“When you’re viewed as the big, bad developer, how do you get the authenticity that people moving into neighborhoods like this crave?” asked Sam Charney, the principal of Charney Construction & Development. Monumental architecture isn’t a bad start. Being a block from the JMZ subway lines also helps.

Those perks will be vital to the marketing pitch. About 80 percent of the units will be studios or one-bedrooms, with the average one-bedroom measuring about 560 square feet, said Nicholas Silvers, a partner at Tavros. The average size of one-bedroom rentals in the borough was 727 square feet in March, said Mr. Miller, the real estate appraiser.

Prices haven’t been announced, but the developers’ strategy is to market units for less than those of nearby competitors, like 325 Kent, part of the redesigned Domino Sugar Refinery site, where the luxury rentals list for an average of $3,436 a month for one-bedroom apartments, according to StreetEasy.

“We think this will be leased up in three to five months, at the most,” Mr. Charney said.

A few blocks away, Cornell Realty Management is building a 26-story hotel and condo tower adjacent to the former Williamsburgh Savings Bank. The domed bank hall had already been converted to an event space when the developer bought the air rights and adjacent lot.

The tower, a 277-foot concrete base topped with a glass cube, will have 235 hotel rooms and 21 condos. Completion is expected in 2021. Paul D. Taylor, the president of Stonehill Taylor and the lead architect, said the project might not have made sense a few years ago, when most housing demand in the area was in the northern, more expensive part of Williamsburg.

“Available properties that are in the core of Williamsburg have been picked over,” Mr. Taylor said of the shift south.

This is not the first time his firm has reimagined a bank. In 2017, Stonehill Taylor redesigned the interiors of the First National Bank Building in Jersey City, which was converted into a 258-unit hotel.

In the financial district of Manhattan, the symbolic heart of commerce, conversions of grand bank buildings are old hat. Metro Loft, a development company that has completed 14 similar conversions, many of them in the area, is wrapping up a new rental project at 20 Broad Street. The 29-story tower, formerly offices for the New York Stock Exchange next door, opened in September, with 533 luxury apartments. Built in 1956 and once connected directly to the Stock Exchange building, the tower has a mix of apartments, from studios to two-bedrooms, starting at $2,685 a month.

The connection to banking is still tangible. Below street level, two vaults, once filled with stocks and bearer bonds, are being repurposed: one to store mechanical equipment, the other as a lounge for residents, said Nathan Berman, the founder of Metro Loft.

The developer’s gain is clear in these projects, but what do the historic buildings get out of it? In the case of 9 DeKalb, where the Dime Savings Bank will merge with the borough’s first super-tall skyscraper, the bank will be restored, inside and out.

The developer, JDS, bought the bank and its air rights for $95 million in 2016. That gave the tower an additional 385,000 square feet of development rights, adding about 30 more floors. In exchange, the developer will repair damage to broken capitals and weathered friezes and preserve much of the landmark interior, restoring the hand-painted wallpaper in the upstairs ladies’ lounge, among other things.

The restoration has also uncovered some bank lore. In the subbasement, insulated by thick concrete, security guards used to shoot their weapons against a far wall for target practice, said Marci M. Clark, an architectural historian who is a director with JDS.

On a recent morning, light poured into a subterranean vault that had not seen the sun since the early 20th century. The developer had torn down an accessory building on the lot to make way for the tower. One of the bank’s walls had been temporarily pinned, held up like a theater scrim, so the new building can be integrated behind it.

The new tower, which is expected to be completed in 2022, will be deferential to the landmark, but not derivative, said Gregg Pasquarelli, a principal at SHoP Architects, the designer. The hexagonal geometry of the building, seen in its ornate tile and coffered ceilings, will be echoed in the shape of the new structure.

Not every bank conversion results in towering new construction. Some recent projects have created livable space in the original buildings. At the Brooklyn Trust Company Building in Brooklyn Heights, the Stahl Organization converted the upper floors of the building, which had been used as offices, into 12 condo units, while the grand bank hall below remained open. Sales began in 2015 and prices ranged from about $3.4 million to $4.4 million, said Vanessa Connelly, who led sales with Brown Harris Stevens.

“There’s definitely an incentive to repurpose these buildings,” said Barry Rice, the architect whose firm designed the conversion. As vacant lots have become harder to find in desirable neighborhoods, he noted, these sorts of conversions have become more popular.

“It’s a beautiful, historical-looking building, and that’s what initially attracted us to it,” said Nadine Kim, who bought a three-bedroom apartment in the building in 2016. Ms. Kim, who works in investment management, said the combination of good bones, high ceilings and modern finishes sealed the deal.

But there are challenges that come with bank conversions. Some of the top-floor apartments in the Brooklyn Heights building have no windows, because the Italian palazzo-style facade is a landmark, and changes were not permitted. So some of those duplex apartments make do with skylights instead.

Another quirk is in an apartment that shares a common wall with the still-functioning bank. It is the only place in the building where the controls of one of the bank lobby clocks can be reached. A hidden panel was built into the back of the master bedroom to access the clock, so a building manager can manually change the time twice a year, said Roger Fortune, a vice president with Stahl. While that unit has been rented, it hasn’t yet sold.

Laura Bohn, an interior designer, converted a 1907 Beaux-Arts bank in the West Village into 11 condo units in 2000, with her husband, Richard Fiore, a developer. At the time, she recalled, “Nobody thought it was a good idea — nobody.”

The couple moved into the one unit they couldn’t sell, a 2,700-square-foot apartment with 15-foot ceilings but poor internal light.

After major renovations, including the creation of two outdoor spaces to bring in more light, the couple listed the apartment for $4.5 million in 2016. It lingered on the market, but is now under contract “for a lot less than it should have been,” Ms. Bohn said.

But she is pleased with their decision to convert the building. All of the apartments have finally sold, and their new ground-floor tenant, the whimsical Museum of Illusions, is a fitting use for the dramatic space.

Next on Ms. Bohn’s agenda is moving to France, maybe the Loire Valley, where she envisions another conversion: a 15th-century chateau.

For weekly email updates on residential real estate news, sign up here. Follow us on Twitter: @nytrealestate.