Do the new NPS Sustainability guidelines ease the task of integrating sustainability into the fabric of preserving historic buildings as intended?

Review of New NPS Illustrated Guidelines on Sustainability - Albert Rex

The Architectural Team (TAT) principals Bob Verrier, AIA, NCARB and Michael Binette, AIA, NCARB, recently published a detailed analysis on the new guidelines from the National Park Service (NPS). Their article raises the question: Do the new guidelines ease the task of integrating sustainability into the fabric of preserving historic buildings as intended? If so, why are owners and developers of historic structures more concerned than ever about varied interpretations by federal and state reviewers“ and how those could affect certifications for LEED and model energy codes?

As Binette and Verrier write in the online exclusive for EcoStructure magazine, design solutions for creating buildings that meet NPS review and green building certification demand experts with a command of the letter and spirit of preservation standards. We also need to bring project owners and developers the ability to anticipate, address, and argue issues raised by evaluators.

Having completed over 150 historic adaptive reuse projects over the firm's past 40 years, TAT is frequently sought out for their expertise by project owners and developers. MacRostie Historic Advisors has collaborated with TAT on numerous historic redevelopment projects, most recently the award-winning Bourne Mill Apartments in Tiverton, RI developed by EA Fish Associates, which involved the conversion of eleven separate buildings located on the abandoned mill complex into a new 165 unit mixed-income multifamily development.

BACKGROUND Preventing old buildings from being torn down is a key aim of historic preservation. We want to preserve our historic fabric so that future generations can experience the places and buildings that informed (our) past. In the past, preservationists have been accused of keeping buildings frozen in time, with a mission often seen as conflicting with the emerging green building movement, and its focus on new and energy-saving technologies.

This isn't the case today, write Binette and Verrier. Organizations that champion historic preservation and those that champion green building now largely embrace each other's missions. It's widely accepted that historic buildings are inherently sustainable, and that embodied energy is an important calculation used alongside evaluations of energy efficiency to determine overall environmental impact and carbon footprint, says Binette.

Yet the EcoStructure article identifies critical challenges that have arisen after new federal rules have been enacted. The National Park Service (NPS) guidelines – unveiled in April last year by the agency that oversees the Federal Historic Preservation Tax Incentive program “are meant to improve opportunities for saving historic structures while also making them lean and green," says Verrier in the article:
To bridge the gap between attaining historic tax credits and the criteria for LEED certification and similar green standards, savvy building owners and developers are working with experts well-versed in the preservation standards. These experts can help anticipate, address, and argue issues raised by evaluators, especially when they affect the sustainability or energy profile of the buildings – or worse, when they actually put a project's feasibility at risk.

According to the EcoStructure article, the NPS guidelines allow flexibility in how the unique conditions of individual buildings can be addressed so that preservation efforts can be aligned with today€™s energy codes and standards,” while it also “recommends certain paths to maintain a building's historical status and significance, and dissuades the use of others.

CURRENT SITUATION
According to the NPS, the Federal Historic Preservation Tax Incentives program – which offers a 20% tax credit for qualified historic preservation projects “ is the federal government's largest revitalization program, and has helped assemble $58 billion in private-sector investment for at least 37,000 building projects. Many states offer similar incentives that may add as much as 10% to the tax breaks.

The new NPS guidelines replace more specific, prescriptive guidelines. "But this new flexibility means that different reviewers“ from both federal and state agencies“ may have different opinions," says Binette. In the EcoStructure article, Binette and Verrier recommend various means for meeting the NPS guidelines while also meeting programs such as LEED. Examples of key building systems and products include fenestration and insulation.

INSULATION
Especially for older masonry buildings, adding insulation boosts energy efficiency of historic properties dramatically. However, Adding insulation invariably changes how a building responds to a host of internal and external environmental conditions, most notably moisture, Verrier writes. Condensation or moisture vapor can accumulate within the newly insulated building envelopes because they will be tighter than anticipated by the original designers and builders.

If project teams don't take these changes into account, say the authors, the historic structures can suffer from mold, spalling bricks, damaged façadds and other problems.

Again, however, with the proper engineering, an insulation upgrade is the singular most effective and least expensive way to improve energy efficiency. Also, new insulating technologies are being developed at a rapid clip. So far the NPS permits most, including certain treatments with spray-applied products that – once installed – could even with some effort ultimately be removed and the original surfaces restored. This, like other technologies, requires expertise and evaluation.

As for windows, preservationists tend to see window replacement as the least preferred solution. At the very least, window profiles should not be altered to retain the original architectural fabric.

LEED fails to acknowledge that historic windows are important features and that their energy efficiency can be upgraded, according to the Whole Building Design Guide (WBDG), published by the National Institute of Building Sciences. Employing storm windows, proper weatherstripping, and caulk, original window systems can achieve efficiency similar to that of new insulated glass window systems.

Verrier and Binette offer these ideas in the EcoStructure article:
While this is often true in most cases, there are projects which window replacement is necessary. Technically speaking, the ability to save a historic window over the long term is often very limited given the costs “which are often unavailable“ of de-leading and restoring the wood frames and sash and then maintaining them over the long term.

For buildings that have been abandoned or neglected for decades, replacement windows are often the only viable option. In these cases, the fine points such as what type of replacement window systems, or whether insulated glass is appropriate must be sorted out with reviewers to strike the right balance between energy savings and architectural authenticity.

The forward strides made by the NPS should be beneficial to developers interested in rehabilitating historic buildings. More flexible guidelines mean more access to tax incentives and more private investment.

But with the new guidelines come a greater need to plan, understand, and engineer projects that balance modern energy efficiency with the goals of historic preservation. Successful developers and owners are working with project teams that not only provide creative architectural and engineering solutions but that also can understand and navigate the increasingly complex issue regarding legislative, code, and tax nuances.

About The Architectural Team, Inc. - Founded in 1971, The Architectural Team, Inc. is a 60-person master planning and architectural firm that has grown through its design excellence and commitment to responsive and collaborative client relationships. The firm has developed a portfolio of distinctive design solutions for a broad range of building types and programs, and has earned more than 75 awards for design excellence. These include the new construction of large urban mixed-use developments, residential, commercial, hospitality, recreational, and academic facilities, as well as a national reputation in the area of historic preservation and adaptive reuse. The firm is located in the restored 1840s-era Commandant's House in Chelsea, Mass. Visit the firm's website here.

About the Blogger – Albert Rex is the Director of the Northeast Office of MacRostie Historic Advisors. Albert has been active in preservation and real estate in New England for the past 17 years. Read more about Albert here. Bourne Mill photo courtesy of © Nat Rea

"The cosmetic and content updates to the site make it well work a visit for those in the historic tax credit field."

New NPS/TPS Website Worth a Look - Albert Rex

The Technical Preservation Services (TPS) branch of the National Park Service (NPS), the division that manages the federal historic tax credit program, has recently expanded and improved their website. The cosmetic and content updates to the site make it well work a visit for those in the historic tax credit field.

The home page features a series of recent case studies on a loop and you can click on the studies to see additional information. Another nice feature is the “Latest Headlines” section that appears in the body of the homepage. This page provide a list of recent NPS speaking engagements and other news such as press releases, statistical updates, and regulation changes, which are also published in the Federal Register.

The site continues to provide access to full-text Preservation Briefs and other Preservation Tech Notes put out by TPS as well as information about Cultural Landscapes. This information is now complemented by a new section that specifically addresses the intersection of historic preservation and environmental sustainability. Here, users can access TPS’s recently released new sustainability guidelines as well as information about weatherization of historic buildings and examples of historic tax credit projects that have successfully combined historic preservation and sustainability.

The improvements to the TPS site are part of a comprehensive expansion and improvement of the NPS website, which also has some new bells and whistles worth mentioning. The new interactive mapping system on the “Find A Park” page, which allows a user to search by state for a variety of NPS-related information, includes a layer for historic preservation tax credit projects with specific information on completed tax credit projects throughout the country.

This feature is a useful tool for quantifying the economic impact of the federal historic credit, which is critical to promoting the credit in the current environment of tax credit reform.

Similar changes have been made to the National Register of Historic Places page, making it a much more interactive experience. NPS is currently working to plot National Register-listed properties on Google Earth, which is accessible under the “Database/Research” tab. The site also provides other useful information about the National Register process.

So, if you have not clicked over there, it's worth a look.

About the Blogger – Albert Rex is the Director of the Northeast Office of MacRostie Historic Advisors. Albert has been active in preservation and real estate in New England for the past 17 years. Read more about Albert here.

The Minnesota report clearly shows that historic tax credits are not just about saving buildings, but about creating jobs, stimulating the economy and creating real investment opportunities in core urban areas across the country.

Report on Minnesota State Historic RehabilitationTax Credit Just Released - Elizabeth Breiseth

Yesterday, the University of Minnesota Extension, with funding from the Minnesota State Historic Preservation Office, released the first ever report on the Minnesota State Historic Rehabilitation Tax Credit, which was signed into law in April 2010, making Minnesota the 30th state to enact a state historic rehabilitation tax credit.

The program mirrors the federal rehabilitation tax credit, and projects are eligible to claim the state credit if they are allowed the federal credit. The Minnesota program allows a state income tax credit equal to 20% of the cost of rehabilitating a qualifying historic property. The Minnesota credit allows a developer to choose either a certificated or refundable credit or a grant (which will stimulate nonprofit use of the incentive). Since becoming law, the credit has stimulated green job growth, increased local tax bases, and helped to revitalize urban and main street communities through reinvestment in historic properties.

The report shows a bright spot in an otherwise challenging economic landscape. During the program's first year, 14 projects received preliminary approval for the credit and had begun construction. An estimated $343 million dollars will be spent on these projects, with $250 million on local, qualifying rehabilitation expenses. These projects will also support 2,948 jobs. The total economic impact of projects currently being leveraged by the Minnesota Historic Rehabilitation Tax Credit is $451 million, including $152 million in labor income. Click here to read the report.

Our own experience at MacRostie Historic Advisors (MHA) has been a positive one, in that the new credit program has generated real rehab interest. We have seen an up-tick in the number of projects happening, particularly in urban areas such as Saint Paul and Minneapolis. The projects are taking many different forms. In Minneapolis, Dominium Development is creating affordable housing in the Buzza Company Building and artist housing in the Pillsbury A Mill. Another Minneapolis project is being undertaken by the Village Green Companies, which is creating 250 units of market rate housing with ground floor retail in the Soo Line Building. The Chittenden & Eastman Building in St. Paul is being undertaken by Ironton Asset Fund and will house 104 apartments while the Jacob Schmidt Brewery Complex has been subdivided and is being developed by Dominium Development and Fort Road Federation for commercial and residential uses. Combined, these projects represent more than $170 million in total development costs.

The success of the Minnesota historic credit as quantified in the report is just another great example of how the rehab of historic buildings continues to be one of the best economic development tools during one of the worst economic downturn. Like several other states, the Minnesota program is directly tied to the federal program, making the urgency of preserving the federal program even greater. The Minnesota report clearly shows that historic tax credits are not just about saving buildings, but about creating jobs, stimulating the economy and creating real investment opportunities in core urban areas across the country.

About the blogger: Elizabeth Breiseth is an Associate in the Midwest Office of MacRostie Historic Advisors.

Without all of these sources, great projects like those highlighted in the Timmy Awards would not exist.

The National Housing & Rehabilitation Association celebrated the winners of the 7th Annual J. Timothy Anderson Awards for Excellence in Historic Rehabilitation - Albert Rex

The National Housing & Rehabilitation Association (NH & RA) was back in Boston this week for its annual fall meeting. This is the 35th year they have been here and many things have changed in the affordable housing and historic rehabilitation fields during that time – one major issue being the complexity of the financing it takes to make these projects work.

This was apparent during the annual Timmy Awards presentation. The Timmys, as they are affectionately known, are in honor of J. Timothy Anderson. Tim was an architect and an early leader in the preservation movement especially in the adaptive reuse of historic buildings. As a practicing architect and adjunct professor at Boston University, Tim had a major impact on many still working in the field and if you had the opportunity to meet him, you would remember the experience fondly.

The awards are given in many different categories and represent a wide range of building types and uses. As you would imagine from NH & RA’s name, many of the awards go to buildings that twin the use of the historic and low-income housing tax credits, but they also cover market rate and commercial projects as well. A complete list of the award winners can be found here.

The final award of the event was the Most Advanced Financial Structure. Larry Curtis of Winn Development, NH & RA's most recent past president, presented this award. During his remarks Larry noted that any of the project that were nominated or won could have easily been in this category. He went on to note the complexity of these transactions and how it takes every bit of real estate knowledge gleaned over the past decades to make them work. Development is not getting easier, and even before the 2008 downturn, projects were using multiple sources of tax credit equity to make the financing work. Now the projects are even more complex relying on multiple tax credits and other sources of soft funds in order to provide high quality affordable housing or rehabilitate significant historic buildings.

There was not one project in the Timmys that did not combine multiple tax credits either utilizing the federal low-income housing tax credit, the federal historic investment tax credit or the new market tax credit. In addition, many of these projects had corresponding state tax credits. If one of these sources goes away, either at the federal or state level, then most likely these award-winning projects go away as well. Credit Worthy is a blog about the historic tax credit industry, but all the tax credit programs that foster development are important.

As we in the historic tax credit industry do things like reach out to our legislators, you can read more about that on the National Trust website, in support of the historic tax credit, we should also support the new market and low income credits as well. Without all of these sources, great projects like those highlighted in the Timmy Awards would not exist.

About the Blogger – Albert Rex is the Director of the Northeast Office of MacRostie Historic Advisors.
Albert has been active in preservation and real estate in New England for the past 17 years. Read more about Albert here.

For the gold standard in historic rehabilitation tax credits, look no further than America's heartland

Missouri: Preservation’s Gold Standard - Mary Nastasi

For the gold standard in historic rehabilitation tax credits, look no further than America's heartland. Missouri's state tax credit program, one of the oldest and most influential in the country, offers a 25% credit on income-producing historic rehabilitations. Yet despite its incredible impact, legislation introduced in 2010 meant to bolster the state’s flagging economy threatened to cap and ultimately sunset out the credit. After weeks of debate in a special session, the bill was tabled, leaving the current $140 million cap in place and preserving one of the state's most important economic development tools.

The rehabilitation of the Hamilton Hotel is a good example of the program's impact. Opened in Saint Louis in 1903, the Hamilton was speculatively built in anticipation of the 1904 World's Fair. Over the course of the twentieth century, the building's function transitioned from a hotel to a medical facility to affordable housing. Rehabilitation work will restore and preserve the building's historic character while updating the property and allowing it to continue serving the community's need for affordable housing. In addition to the jobs created by the rehabilitation process, the project will create at least three permanent positions.

The historic tax credit has been a great economic development tool for Missouri. A 2002 Missouri Department of Natural Resources study found that, since its introduction in 1998, the state historic tax credit has created 6,871 jobs, $121 million in income, $283 million in gross state product, $60 million in total taxes, and $249 million in in-state wealth all at little net cost to Missouri taxpayers. Worth 25% of a projects QRE's, Missouri has one of the largest state credits in the country. Results of the 2002 study also indicate that $500 million in state tax credit allocation generated $2 billion in investment. The credit serves large and small developers alike, with approximately 2/3 of the completed projects valued at less than $500,000 each.

The state tax credit program is also valuable for its ability to create jobs. Building materials can come from anywhere, but the actual restoration work, the installation and eventual maintenance of those materials, that's all local. Donovan Rypkema, principal of PlaceEconomics, estimates that the Missouri state tax credit has created over 40,000 full-time equivalent jobs since its implementation, adding $673 million directly and $700 million indirectly to Missourians. Similarly, a 2010 Missouri Growth Association study found that the credit is associated with higher-than-expected rates of annual job growth and higher-than-expected increases in high-paying sustainable jobs, among other great economic benefits.

It's clear that the credit has become a major force in Missouri's economy, and its loss would have been a huge blow. Many projects, the Hamilton Hotel included, could not happen without state tax credit financing. Missouri's close call is a clear reminder of the importance of vigilance and advocacy; the credit is too valuable to lose.

About the Blogger: Mary Nastasi is a Junior Associate in the Northeast Office of MacRostie Historic Advisors.
Read more about Mary here.

Constant vigilance has long been a part of the ethos of the preservation community, and is really needed in creating and sustaining a historic tax credit programConstant Vigilance - Albert Rex

Constant Vigilance - Albert Rex

A few weeks ago I had the opportunity to once again testify at the State House on behalf of the Massachusetts Historic Rehabilitation Tax Credit. I've done this numerous times since the credit was first submitted as a component of an economic stimulus bill in 2003 and passed into law later that year. From the beginning, Jim Igoe and his staff at Preservation Massachusetts has organized these efforts along with their lobbyist Paul Pezzella. It seems like each trip to the Statehouse to testify or meet with a legislator does not immediately bear fruit, but over the eight years since the legislation was passed the credit has had its sunset date extended by a decade and the credit has been increased five fold.

Constant vigilance has long been a part of the ethos of the preservation community, and is really needed in creating and sustaining a historic tax credit program. Many statewide preservation organizations have brought this level of commitment to advocating for these programs. They have funded or undertaken studies that show the impact of these credits on their state's economy from job creation to increases in tax revenue and their state’s gross domestic product. They have developed relationships with their legislators and other stakeholders and educated them about the importance of the credit. They have spent hours upon hours testifying and working for the retention and increase of these credits. Finally, they have developed relationships with the development community, who has also come out in support of these programs.

This same level of vigilance has not taken place at the federal level – because it really hasn't needed to. There have been no significant threats to the credit in the 30-plus years it has been around, with the biggest changes happening during the Reagan tax changes in 1986 and the reduction of the credit from 25% to 20% . There were efforts to create a homeowners historic credit, led by the late Rhode Island Senator John Chafee, but until the last two years, there has been little effort in trying to have any impact on the federal historic credit. With tax reform at the federal level now a reality, it is time to look at the successful track record in many states of creating and maintaining their credits. Over the past year or so the Historic Tax Credit Coalition (HTCC) has made important headway on expanding advocacy on behalf of the federal credit and its constituents. A good- and necessary- first step, but the effort must continue.

The success of advocacy at the state level, at a time when state budgets are being slashed, should provide a course of action in addressing the federal program. The historic credit has been the most affective tool for historic preservation and has led to the rehabilitation of thousands of buildings. The same level of commitment and constant vigilance that is seen at the state level must be applied at the federal level, or the preservation community risks losing a most valuable asset.

About the Blogger – Albert Rex is the Director of the Northeast Office of MacRostie Historic Advisors.

Albert has been active in preservation and real estate in New England for the past 17 years. Read more about Albert here.

Advocacy around tax reform should not only be seen as a time to play defense, but also a chance for us to highlight job creation.Welcome to Credit Worthy

Welcome to Credit Worthy - Bill MacRostie

Welcome to Credit Worthy, a blog about the historic tax credit industry. With the specter of tax reform looming on the horizon and what seems like daily changes in state historic credits, we felt this was an opportune time to launch the blog. Credit Worthy is being developed in conjunction with MacRostie Historic Advisors’ new web site, which will be coming in October.

Our goal in launching the blog is to provide a forum for news and discussion about all aspects of the historic tax credit industry. Having a national practice, headquartered in DC, we have an opportunity to experience firsthand what is happening across the country and want to share this experience. We will keep you up to date on the latest lobbying efforts on the federal credit front and on changes with NPS guidance. We will also be calling on many of our colleagues to guest blog about their areas of expertise, ranging from accounting to tax law to syndication of federal and state historic credits.

In addition to providing information about all aspects of historic tax credits, we hope we can help promote efforts by organizations like the Historic Tax Credit Coalition and National Housing & Rehabilitation Association to lobby on behalf of our community. Advocacy around tax reform should not only be seen as a time to play defense, but also as a chance for our industry to highlight job creation, and other positive impacts the credits have at the local, state and federal levels. We plan to blog a couple of times a week, so if there is anything you think we should be discussing…let us know and look for our next post.

About the Blogger - Bill MacRostie is the Principal of MacRostie Historic Advisors, a firm which he founded in 2004. He has been in the private sector consulting on historic tax credit projects for over 27 years.

Read more about Bill here.

"We have helped to stabilize the community..." Shaun Donovan

HUD Secretary Shaun Donovan Tours Pullman Wheelworks Apartments in Chicago - Allen Johnson

Chicago, Illinois — Shaun Donovan, Secretary of the U.S. Department of Housing and Urban Development recently visited the Pullman Wheelworks Apartments in Chicago's historic Pullman neighborhood and touted the value of this historic rehabilitation as a poster project for affordable housing and neighborhood stabilization. For an account of Secretary Donovan's visit to Pullman click here.

MacRostie Historic Advisors is providing historic preservation consulting services to Mercy Housing Lakefront for the Pullman rehabilitation which is utilizing federal historic tax credits. For more information on the project click here.

Photo courtesy of the Chicago Tribune

About the blogger : Allen Johnson is the Director of the Midwest Office of MacRostie Historic Advisors, which opened in 2006.

Developed by our client, Baltimore-based Wexford Science and Technology, the $105 million project will create 350 new high-paying jobs in the heart of Winston-Salem.

R. J. Reynolds Tobacco Factory 91- Now 21st Century Bio Tech Lab - Bill MacRostie

On February 21st, Jen Hembree and I attended the Grand Opening of Wake Forest Biotech Place in downtown Winston-Salem, North Carolina. Located in the former R. J. Reynolds Tobacco Factory 91, a unique building constructed in 1937 with 100% glass-block walls, BioTech Place provides 242,000 square feet of substantial laboratory, meeting and commercial space. 

Developed by our client, Baltimore-based Wexford Science and Technology, the $105 million project will create 350 new high-paying jobs in the heart of Winston-Salem. The rehabilitation’s completion represents the first phase of a larger project that will convert the historic R.J. Reynolds tobacco factory complex into a state-of-the-art medical research and bio-tech park conceived by Piedmont Triad Research Park. 

At the opening, Governor Beverly Perdue and Senator Richard Burr spoke eloquently about the re-purposing of a former cigarette factory into a health science facility, and both heavily emphasized the role the research park will play in the re-alignment of North Carolina’s economy from tobacco and manufacturing to knowledge-based activities. As a Republican member of the U.S. Senate’s tax-writing Finance Committee, we were especially pleased that Senator Burr attended the ceremony and witnessed first-hand the importance of the federal and state historic tax credit programs in job creation and economic revitalization. We expect Senator Burr to play an important role in the upcoming debate about federal tax reform. 

For more great images of the event check out the North Carolina State Historic Preservation office Facebook page here. 

Blog photo courtesy of Wake Forest Baptist Medical Center. 

– Bill MacRostie is the Principal of MacRostie Historic Advisors, a firm which he founded in 2004. He has been in the private sector consulting on historic tax credit projects for over 27 years. Read more about Bill here.