Since its legislative origins in the 1960s, the National Register of Historic Places has blossomed into more than the official federal list of buildings and districts significant in history, architecture, archaeology, engineering and culture. For building owners and investors, the designation continues to open doors to incentives that help rehabilitation projects proceed.
Yet myths about the designation still exist. Contrary to public perception, the National Register of Historic Places bestows honorary recognition and does not place restrictions or requirements on private-property owners who do not seek the federal tax credit linked to the list.
However, “if you select to participate in the investment tax credit rehabilitation program, there are rules that come with how you are going to repair your building … and these guidelines come from the National Park Service,” says Cynthia Howk, architectural research coordinator at the Landmark Society of Western New York Inc.
She adds: “You never need to talk to the National Park Service or the National Register if you simply want to go ahead and rehabilitate your building and spend your money and your investors’ money. And the only review you’re going to be getting is to go to city hall—or the town or village—and get building permits. The National Register designation does not affect a building owner unless you want to take those tax credits for the rehabilitation.”
In practical terms, that means “you can do anything that is permitted within your local city, town or village zoning ordinance,” Howk says. “The National Register of Historic Places does not affect you because you are doing this with your private funds.”
In addition to the 20 percent tax credit for rehabilitation that is available to owners of income-producing properties listed in the National Register, New York State sweetens the deal by offering an additional 20 percent tax credit.
“This is a tremendous economic incentive for developers,” Howk says. “(They) may not be interested in history or have only passing interest in architecture, but they’re certainly interested in a good financial strategy.”
Some studies suggest that a National Register listing alone boosts a property’s value, but “I don’t know that I would make that statement,” says Wayne Goodman, executive director of the Landmark Society. Nevertheless, the federal and state tax credits are immensely attractive and make “rehabilitation more affordable and, in some cases, even possible,” he says.
He adds: “There have been numerous studies performed over the years that show that the taxes generated from projects funded through the tax-credit program turn, I guess you could say, a profit for the federal and state governments all across the United States. So (the Landmark Society is) hopeful that we can continue to make the very strong case that these are tax credits that work for everyone.”
A listing in the National Register of Historic Places triggers inclusion in the New York State Register of Historic Places, but one difference between the two programs is that a property can be listed in the state’s register “without an owner’s permission, where to get a property listed on the National Register, you do need an owner’s official permission,” Howk says.
Though nonprofit organizations do not have tax liability against which to apply historic tax credits, they can turn to syndication. That process involves “selling” the credits to investors interested in redeeming them to lessen their own tax burden, in exchange for additional equity capital to help finance rehab projects. Syndication typically entails a property owner bringing an investor into a building’s ownership structure.
Among the most widely known buildings in downtown Rochester to receive National Register designation and the related tax credits is the Hilton Garden Inn at 155 E. Main St. Owned by Rochester-based DHD Ventures LLC, the 106-room hotel opened last year at the site of the former National Clothing Co., once a major retailer of men’s apparel.
Reviving the structure, which was built in 1924 and then added on to in 1938 and 1954, involved significant rehabilitation and demolishing the fire-damaged Stone Street Grill. Beaux Arts design elements and the National Clothing Co. logo on the building’s facade were retained.
One Rochester-area historic district recently approved—but not yet officially announced—for inclusion in the State and National Registers of Historic Places is the LeRoy Downtown Historic District. The area encompasses the historical commercial and residential center of the Genesee County village. The district is oriented around the intersection of routes 19 and 5, primarily along Main and West Main streets, with several buildings included from the cross streets of Bank, Lake and Clay.
“That gives the opportunity to the commercial building owners, if they are going to do major rehabilitation, the possibility of considering using the investment tax credit program for their buildings—or not,” Howk says. “If they don’t want to, they don’t have to. It’s completely up to them to make that decision.”
One particular gem in LeRoy’s historic district is an Italianate commercial row building known as the Washington Block. The building, which once housed an apothecary, was constructed immediately after a massive fire razed the northern half of Main Street in 1855.
“Above each window is a cast-iron profile of George Washington,” says Lynne Belluscio, director of LeRoy Historical Society. “That’s why it’s called the Washington Block.”
Officials and congregants from the Christian church that currently owns the Washington Block’s west side have expressed interest in investing more in the building, Belluscio says.
There also have been rumblings that other parties may step up to rehabilitate the building’s east side, Belluscio says, and “maybe, now with making the National Register, that will give them a little bit of encouragement to further restore that building.”
Sheila Livadas is a Rochester-area freelance writer.
11/18/2016 (c) 2016 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email email@example.com.