Friday, November 1, 2013

Putting the Preservation back in Historic Preservation Tax Credits

When I recently attended the Massachusetts Historic Preservation Conference the first session I signed up for sounded enticing:  Current Challenges in Applying the Secretary of the Interior’s Standards for Rehabilitation.   The blurb in the program mentioned what you’d expect about how the “Standards for the Treatment of Historic Properties promote consistent and responsible preservation practices and help to protect the historic features that define the character of significant cultural resources.” 
It went on to advertise that expert panelists would present case studies that dealt with the challenges of adaptive re-use:  energy efficiency, sustainability, code compliance, and accessibility.  ‘Sign me up,’ I thought, ‘this is what I’m all about!’  The repurposing of existing buildings for new or continued use is the most important issue on the horizon of the built environment today. And preserving the “historic features that define the character of significant cultural resources” is a challenge close to the heart of those engaged in such endeavors. 
Before I get to the point, here’s some background for the uninitiated or a refresher for my colleagues in the field.  The Secretary of the Interior provides four distinct but interrelated approaches to the treatment of historic properties:  preservation, rehabilitation, restoration, and reconstruction.  Preservation is the most desirable approach and focuses on the maintenance and repair of existing historic materials and retention of a property's form as it has evolved over time.  Rehabilitation acknowledges the need to alter or add to a historic property to meet continuing or changing uses while retaining the property's historic character.  Remember that last part—retaining the property's historic character—it’ll be important later.
I was surprised that the presentation was on the standard of rehabilitation … poster boards on easels spelling them out in bold letters. Literally, it was on the standard of rehabilitation, not preservation.  Two historic preservation consultants presented one tax credit project after another and one slide even listed substitute materials that were gaining acceptance:  Azek instead of wood, copper-colored aluminum sheet metal, aluminum windows instead of steel, Hardi-board instead of cedar clapboard.   An attendee in the audience raised the question of the all-too-common practice of replacing the fenestration in large-scale adaptive re-use projects, but the issue of wooden replacement windows was dismissed as we were told that no “cost effective” options are available.  The presentation should have been titled Pushing the Envelope: What you can get away with when pursuing preservation tax credits.
 
According to the National Park Service’s website, the Federal Historic Preservation Tax Incentives program “encourages private sector investment in the rehabilitation and re-use of historic buildings ... It has leveraged over $62 billion in private investment to preserve 38,000 historic properties since 1976.”  The heading on the NPS web page advertises Tax Incentives for Preserving Historic Properties, but that’s not technically correct.  Our government offers a 20% income tax credit for “the rehabilitation of historic, income-producing buildings that are determined by the Secretary of the Interior, through the National Park Service, to be ‘certified historic structures.’” 
The Massachusetts Historical Commission and the National Park Service review the proposed rehabilitation work to ensure that it complies with the Secretary’s Standards for Rehabilitation.  The tax credits can be applied to offset the project investment or sold privately.  IRS regulations significantly limit the ability of non-profits to redeem the credits, for obvious reasons—you know, they don’t pay taxes.  However, they may pursue them and then “syndicate” them.   Syndicate is a fancy word for “sell” in this context.  Interestingly, many of the projects presented were for non-profits. The presenters also stated that Bank of America is the largest buyer of tax credits, nationally.
The modern day robber barons strike again, and it comes out of our pockets—yes, our pockets—that's where tax credits come from.  Since we're all invested in this system, I'd like to see the Standards of Rehabilitation, if not elevated to Preservation, actually enforced.  Why give in immediately to the replacement of the fenestration to satisfy some empty goal of LEED certification?  They give points for replacement windows, but not restoration of the existing sash and frames.  LEED isn’t interested in full life cycle analyses of systems.  And the designers of these projects are looking for low- and no-maintenance solutions to the issues of the envelope as they fly the “green” flag of the USGBC.
 
In the beginning I quoted the Standards: “Rehabilitation acknowledges the need to alter or add to a historic property to meet continuing or changing uses while retaining the property's historic character.”  And the session description that indicated that preserving the “historic features that define the character of significant cultural resources” is at the heart of such endeavors.  What are these features? The walls, the roof and the fenestration are the character-defining, distinctive features of the envelope.  Rehabilitation standard number six states that “where the severity of deterioration requires replacement of a distinctive feature, the new feature will match the old in design, color, texture, and, where possible, materials.”  Translated: In-Kind.  Yet, here are the experts promoting the wholesale replacement of said features in a manner other than in-kind.
Consider the Village Hall in North Hadley, Massachusetts.  A developer wants to buy it and repurpose it into an income-producing property.  He can create a Disney World version of an Italianate by replacing the standing-seam roof with copper-colored sheet metal, the trim, moldings and cornice with Azek, the original clapboard siding with Hardi-board, and the 150 year old windows with something double-paned and clad in anodized aluminum.  And he can obtain tax credits as a reward, selling them if he wants to a bank.  Or he can use them to offset the costs associated with his private investment. 
If the alternative is losing a building like this to demolition by neglect, is the Disnefication better?  You bet it is.  I don’t blame the developers for this.  That would be like blaming a lion for attacking a zoo keeper who sticks her arm in the cage.  They’re animals, it’s what they do, devouring whatever they can without a second thought.  As preservationists, it is our job to safeguard the significant, character-defining features of historic buildings.  When the state of deterioration is such that replacement is warranted, we must demand replacement in kind.
 
We need to resist and reverse this trend of pushing the envelope, assisting developers as they push harder and farther to see what they can get away with.  We must hold the line:  “Where the severity of deterioration requires replacement of a distinctive feature, the new feature will match the old in design, color, texture, and, where possible, materials.”   They still make materials with wood, copper, and slate.  If private entities want to profit from these buildings, and gain tax credits in the process, make them follow the Standards.  


Don’t be a historic preservation consultant.  Be a historic preservationist.

3 comments:

  1. Ward, I could not agree more. Local, state and Federal agencies seem to be working against those of us striving to do "preservation." When are "we" (the collective we) going to work together again to save what is feasible to save?

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    1. Kim, I actually chickened out right before publishing this and deleted the fact that the session was moderated by MHC's executive director. I guess I've since gained the fortitude (halfway) to include that detail. When people in the audience started peppering the speakers with tough questions about the almost automatic loss of the fenestration in every large-scale adaptive re-use they turned to the moderator for help. The answer was avoided with a red herring, wish-the-NPS-guy-could-be-here (but for the Tea Party shutdown), "We all hate the GOP" response. I have since spoken to MANY of our colleagues who were in attendance and left asking "Huh?" It was pretty startling to hear. Next year the conference will be hosted by the UMass-Amherst HP program. I'd like to convince Max Page to allow a session that speaks to the heart of this issue. Perhaps you and/or Jack would be interested. /ward

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  2. I wrote the below comment on another blog in response to a comment that the post was difficult to understand(http://www.gossipsofrivertown.blogspot.com/2013/11/the-state-of-historic-preservation.html#comment-form):

    My goal was to approach the subject from a very technical viewpoint in an attempt to create an indictment of a system that has gone sideways. Those of us who are hyper-focused on these issues and the application of the standards see this struggle as a tug-of-war. We want to repurpose buildings and preservation tax credits were created to encourage private developers to do just that. I’m ok with the syndication of tax credits by non-profits, too; just a little sickened to learn that B of A is the largest consumer.

    The problem is that developers aren’t satisfied with the tax credits and they are constantly “value engineering” their projects to increase profits. Couple that with the fact that they are usually working with architects that put LEED alongside AIA after their names. LEED certification is a fabulous goal to strive for in new construction as it encourages the use of sustainable materials that promote energy efficiency. Trouble is, the lines start to blur when they start tossing the word ‘sustainable’ around and what’s good for a new L.L. Bean big box store isn’t the same as what’s good for a new L.L. Bean store in a repurposed building.

    I included an image of the Cambridge (MA) City Hall Annex in the blog and should have explained why. The restoration of the building in 2005 was the first time a historic building (NRHP) received LEED Bronze or whatever the ribbon was for. But they should have received LEED Aluminum for replacing the window sash and frames. A report on this building was presented by a UMass grad student that looked at how energy efficiency was improved, etc., as a result of the project. When considering only the energy savings vs. window costs, the City expects to recoup their investment by 2080. When I asked how that compared to the estimated cost to restore the existing windows and add interior or exterior storms he advised that that option was “never even considered.”

    Never even considered. Wow. Do you feel that? That’s the place I’m coming from when I talk about the frustration with the way adaptive re-use projects are tainted by the “green” flag of the USGBC (a private corporation, by the way, NOT a government agency.) The City paid for the project with revenue generated from its tax base and with state and federal grants. There’s our tax dollar, hard at work again for us. LEED was designed by the USGBC, with mostly good intentions, to promote smart, responsible growth in NEW construction projects. New construction is way down since 2008 and they’re looking for new markets. In fact, last year, they launched a new LEED specialization called “Neighborhood Development.” They still refuse to consider full life cycle analysis when assessing building systems, but it’s a step in the right direction.

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