These were the most active architects in NYC’s spring awakening

Covid, uncertainty over 421a slowed development, but architects are hopeful for continued rebound

Richard Dattner of Dattner Architects, Anthony Morali of Morali Architects, Gene Kaufman of Gene Kaufman Architect P.C.

The sky was the limit for Nima Badaly early last year. The owner of Badaly Architects claimed developers, eager to invest, were requesting zoning analysis on a daily basis.

But Badaly’s business was turned upside down, along with the rest of the real estate industry, when Covid slammed the city shut in March 2020. While developers had been knocking down the architect’s door only weeks earlier, Badaly said his average rate of zoning analysis work shrunk to just two meetings a month.

“Everything was booming,” Badaly told The Real Deal. “Then Covid hit and a lot came to a stopping point.”

A year-and-a-half later, the biggest factor in the decline in new building projects is no longer the pandemic, Badaly said, but the murky future of a key public policy.

“I speak to my clients, and nobody’s looking to buy anything right now because of the uncertainty of the 421a,” Badaly said.

The 421a tax abatement — which gives developers a partial property tax exemption in exchange for preserving a portion of a building’s units as affordable — is set to expire in June of next year.

“Most developers cannot make a profit and build unless you’re talking about luxury,” Badaly said. “Regular apartments without a tax abatement, it just doesn’t pay. If you buy today, chances are, you’re not going to have the foundation in by next July.”

Amid the ongoing pandemic and 421a’s pending expiration, The Real Deal compiled a list of the most active architects in NYC during the second quarter of 2021. TRD analyzed initial job applications filed with the Department of Buildings by registered architects between April 1 and June 30 for both new building and ground-up construction, as well as major alteration projects.

Badaly ranked second on the list of architects with the highest estimated cost of new building projects across the city. His firm’s six applications are estimated at just shy of $30 million, trailing only Dattner.

Despite the potential drop-off in project volume for some architecture firms, companies like Marvel and SLCE remained among the top five firms by total building square footage on ground-up projects.

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In last year’s square footage ranking, Marvel led all firms with 11 new building projects across 2.1 million square feet. The square footage of Marvel’s lone new building application in the second quarter of 2021 would account for nearly a quarter — 23 percent — of its 2020 square footage totals. That project is a proposed 14-story, mixed-use building at 1 Java Street in Brooklyn. The plans for the building are still under review, according to DOB data.

For applications of major alterations involving a certificate of occupancy, HDR led in the second quarter based on total estimated cost, while Anthony Cucich had the most job filings.

Architect Ralph Kowalczyk, whose firm Issac & Stern ranked 28th on TRD’s 2018 most active New York City architects list, differed from Badaly’s take on the impact of 421a anxiety on development.

“With 421a expiring, there is going to be more interest and more pressure on the clients to get things done and lock in those tax incentives,” said Kowalczyk.

Kowalczyk has two new building projects in the pipeline, plans for which his firm filed at the end of May. The first is a 24,000-square-foot, five-story residential building at 540 Graham Avenue in Brooklyn. The other is a 34,000-square-foot, nine-story mixed-use building at 2739 Creston Avenue in the Bronx with an estimated cost of $6.68 million. Both projects carry an estimated cost of $8 to $9 million, Kowalczyk said.

Both Badaly and Kowalczyk, whose work was primarily in the outer boroughs for the second-quarter, are examples of how ground-up and alteration project volume remains strong in parts of Queens, Brooklyn and the Bronx, which lead in total estimated cost and total square footage of projects.

Kowalczyk is optimistic that the pace of new projects will continue to rise, as there is still time for developers to get a shovel in the ground and lock in tax benefits under the current system. But, he warned, developers and investors will have to move quickly.

“We see a big interest from the clients, and we’re expecting much more movement in September and in the fall,” he said.

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