Cost, restoration vs. demolition: Examining factors involved in expanding existing structures

By William Gati

My clients often want to know how much they can add to their existing buildings to maximize the square footage. They also want to know how much that would cost. There are hundreds of factors that affect expandability: Zoning regulations, landmark laws and site restrictions are but a few of these. It is often less expensive to keep the existing structure and to build an addition. It is sometimes better to demolish and re-build, especially if the site is greatly underdeveloped and the zoning allows for a much larger footprint and structure. Many builders scout the city for locations and sites that have great development potential. The Meatpacking District, LIC and Downtown Brooklyn are a few examples. The main issue with these projects is whether we should restore the existing structure or should be demolish and rebuild. 

“With the debate of adaptive reuse as a sustainable avenue in the development of key sites, there are many advantages to using certain sites for redevelopment. One of these advantages is the sites’ location. In many cases, historical sites are often located in the centers of large cities. Due to the spatial development of a given area, these buildings can often be landmarked and therefore sold as an entity, rather than just for the land that they occupy which the new tenants then have to retrofit the building for their particular purpose. Older buildings also often have a specific period character through the detailing and joinery of their constructed eras that newer or reconstructed developments lack. In certain cases such as the hospitality industry, the grand character of a site can influence the feel of their building and are used for maximum potential to enhance the sites physical attractiveness to a client. There has been much debate on the economic possibilities and viability of adaptive reuse as different corporations and companies seek to find sustainable ways to approach their corporate or retail sites. There are many outcomes that affect the economic return of adaptive reuse as an avenue to reuse of a given site. Factors such as the reuse of materials and resources as well as a lesser need to involve energy, both in terms of labor and machine powered, can effectively decrease the monetary funds needed for companies to establish sites. However, there can be hidden costs in reusing old buildings such as the unknown contamination of older sites, decay and disuse affecting the usability of a building, and the possible need for modification of an older building to fit current and future building codes. 

The economic costs differ from project to project and some professionals go as far as to assert that new build is always more economical and renovation is universally more expensive, due to their own involvement with adaptive reuse projects. Others claim that the return on investment is enhanced when using an older building because of the savings involved. One developer claims that “reusing buildings generally represents a saving of between 10-12% over building new. In terms of profitability, there are also assertions that adaptive reuse projects often have an uncertainty to their profitably that newer developments lack. When looking for funding to build, these considerations must be addressed.” (From https://en.wikipedia.org/wiki/Adaptive_reuse)

Zoning Laws, Historic Preservation Laws, Environmental Laws affect re-purposing buildings. Commercial storefronts change use regularly. Zoning analysis is usually needed to unravel the many regulations that affect a project. If the zoning permits an expansion, a demolition is usually performed if the structure is not landmarked or of no useful value to the development. If the structure is already overbuilt, adaptive re-use is usually preferred in order to keep the non-complying floor area. If the structure has toxic materials like asbestos, a demolition would be cost prohibitive. Adherence and compliance with the NYC Zoning and Building Codes is an important consideration when deciding whether to re-purpose an existing structure or demolish and rebuild. If the final value of the building is greater than the acquisition cost and the restoration cost, it is worth re-purposing the building, however, if the final value of the building is less than the acquisition cost and restoration cost, it is often better to demolish and re-build. Structures built prior to 1940 were built with better materials and craftsmanship than structures built afterwards. It would cost us way too much to reconstruct many of the pre-war buildings in our city. Adaptive reuse merges the best of both worlds: Incorporating modern technological advances behind the façades of old-world buildings. Build better buildings and people will have a better quality of life and pay more for the privilege.

If you are interested in knowing how much more space you can build on your properties, please email me your address and contact info at wgati@architecturestudio.com.

William Gati, AIA, is the president of Architecture Studio, Kew Gardens, N.Y.

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