Prestige Value

The building which Paul Rudolph--and most other architects--acknowledges as the "most beautiful curtain-wall building" in America was paying a penalty for it. Park Avenue's Seagram Building, designed by Mies van der Rohe and Philip Johnson, has been judged by New York City's Tax Commission to be so expensively elegant that it should be taxed on a basis about 50% higher than if it were one of the bleak glass boxes that surround it.

Bronze-sheathed and thrusting out of a fountained plaza, the 38-story Seagram Building cost $36 million--more than twice as much as a building constructed to the usual speculative standards. On the basis of net rental income, the formula on which other Manhattan office buildings are taxed, Seagram would have had a tax evaluation of about $17 million. But Seagram's splendor prompted the Tax Commission to reason that the company had spent the extra money for prestige, and prestige should be taxable. The Seagram company took its case to court and lost.

"The prestige value," wrote Justice Charles Breitel of the state's appellate division, "has a rental value not based on commercially rented space, but on the building's value in promoting the economic interests of an owner. Thus the owner ... is investing in a real estate project that will contribute to the production of income in its principal enterprise." The Appellate Court upheld the Tax Commission's ruling that Seagram should be taxed on an appraisal of $21 million, half again as much as an ordinary building the same size.

Spending money on beauty, according to the justices' decision, is nothing but a manifestation of Thorstein Veblen's "conspicuous waste." The justices' alternative doctrine was obviously conspicuous mediocrity. Editorialized the Architectural Forum: "Make no mistake, if this outrageous decision is permitted to stand, its effects on our three-dimensional cities will not be superficial, but disastrous." Seagram will appeal.

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