Mansfield Downtown Property Owners Conference

Property Owners Conference - May 13, 2009Downtown Mansfield, Inc.

• A quick introduction to Preservation Ohio

• A look at historic preservation and downtown revitalization

• A look at preservation-based downtown revitalization in Ohio

• Financial incentives for revitalization

About Preservation Ohio

STATEWIDE PRESERVATION ORGANIZATIONS: Education, Technical Services, Advocacy, Partnership

47 States have 1 such organization, leaving:

0 0 2


• Established in 1982; original Trustees include current Ohio Chief Justice Thomas Moyer.

• First organization in Ohio to host statewide meetings on downtown revitalization, smart/sustainable growth, courthouse renovation.

• Current Trustees from all over the state, including Toledo, Youngstown, Oxford and Cincinnati.

• Staff and Board have unparalleled experience in Ohio-based downtown revitalization and in historic preservation/design review ordinance administration.


• Ohio’s largest statewide historic conservation easement program – Butler, Ottawa, Montgomery, Clark, Washington Counties – soon Summit and Franklin.

• Leading statewide preservation organization nationally in use of online technology.

• First and still most visited blog in the country on statewide preservation and downtown revitalization.

• Since 1993, home of annual listing of Ohio’s Most Endangered Historic Sites.

Historic Preservation

“Historic preservation” refers to a decision-making process. Simply put, it means taking the full value of a particular piece of property into consideration when making choices about its future – not only including its ability to generate an income, but also its connection to its neighboring properties and to the community as a whole.

Historic Preservation

“Historic preservation” does not usually mean attempting to save every element of the past. Such an effort would not only be impossible, it would likely prove counter-productive. It does mean using this decision-making process as owners and as communities to maximize opportunities for economic development and a high quality of life.

Madison, Indiana ~ Galesburg, Illinois ~ Hot Springs, South Dakota

1976 – Main Street Program Pilot Communities

Four-Point ApproachTM

By concentrating on the following four areas simultaneously and by seeking incremental change, communities can

maximize their opportunities for downtown revitalization.

• Design• Economic Restructuring

• Promotion• Organization

Preservation and Downtown

“The Economics of Historic Preservation: A Community Leader’s Guide”

~ Donovan D. Rypkema


• Downtown is the historic center of the community, and a healthy downtown is essential for civic well-being.

• As downtown is the home of a city’s leadership, its appearance is perceived as a direct reflection on those leaders.

• Downtown represents a huge investment public funds in infrastructure.

• Historic downtowns provide a diversity of space and rent levels not found elsewhere in the community.

• Older buildings provide excellent locations for start-up small businesses in growth industries.


• The appreciation rates for downtown historic buildings often outperform the market as a whole.

• Preservation and design review ordinances create a stable market that in turns encourages private and public investment.

• Historic preservation creates more jobs that the same amount of new construction.

• Historic rehabilitation is counter-cyclical, providing stabilization of a local economy.

• Quality of life is becoming THE critical ingredient in economic development, and preservation is an important part of the quality of life equation.

Preservation and Revitalization

President Obama's $780 billion stimulus package seeks to create 3.5 million jobs, at a cost of $223,000 per job. But the existing 20 percent federal tax credit for historic preservation can spur economic development at a cost of only $6,873 per job!

Preservation and Revitalization

Differentiation.

It is what makes an object unique that also makes it marketable. A community therefore becomes marketable for investment when it is unique – and downtown represents any community’s largest unique attribute.

Downtown Revitalization in Ohio


• Despite being a location for one of the first Main Street Program meetings and having a pilot program finalist (Tiffin), Ohio did not gain a statewide coordinating program until 1998.

• In the meantime, several Ohio communities began “self-initiated” programs – Mansfield, Galion, Wooster all did this in north-central Ohio.

• Was housed with Downtown Ohio, Inc., then Downtown Ohio/Heritage Ohio, now known as Heritage Ohio.

• First three official programs – Chagrin Falls, Salem and Galion; now has 38 active programs.


Many more Ohio communities use preservation as a basis for downtown revitalization, including former Main Street communities, and others which have never been a part of the program. These include:

Lorain, Fremont, Batavia, New Richmond, Mansfield, Marion, Findlay, New Bremen, New Philadelphia, Tiffin, Mechanicsburg


There are also several other communities that have historic preservation or design/architectural review districts in their downtown areas, several of which are Certified Local Governments. These include:

Canal Fulton, Canfield, Dublin, Galion, Madison, Olmstead Falls, Oxford, Parma, Springboro, Steubenville, Waynesville, Salem, Willoughby, Zanesville, Mount Gilead

Financial Incentivesfor Preservation

• Tax credits – Federal (2 kinds), Ohio

• Tax deductions

• Grants

• Stimulus/special funding opportunities

• Other

20% Federal Tax Credit

• 20% tax credit for qualified rehabilitation expenditures on certified historic structures

• Building must be individually listed on NRHP or certified as contributing to a NRHD – or in certified local district

• Must be income-producing (depreciable)

• “Substantial rehab” – greater of $5000 or adjusted basis

• Hard and soft costs qualify

• Work must be certified by NPS (through OHPO), done according to Secretary of the Interior Standards


• Unlike Shelby, Bucyrus and Ashland, there is no NRHD in Downtown Mansfield

• Individual properties – Bissman Block, City Mills, The Colonial, Hancock & Dow Building, Mansfield Savings Bank, May Building, Mechanics Building & Loan, Ohio Theatre, Richland Trust Building, Soldiers & Sailors Memorial Building, Voegele Building, several others along Park Avenue West

• Possible consideration might be given to certification of the Central Park Historic District


• Must be “non-historic,” i.e., cannot qualify for the 20% tax credit, and must have been constructed before 1936.

• Like the 20% credit, the building must be depreciable and the renovation must be substantial ($5000/adjusted basis)

• No set standards, but must meet “wall retention requirement” – 50% of external walls, 75% of internal walls

• No review requirement

• Mansfield – most downtown Mansfield buildings should qualify for this tax credit

Easement Deduction

• Historic conservation easements are interests in real property that govern the exterior (usually) of a property

• Agreement entered into with non-profit organization (such as Preservation Ohio) that will monitor easement

• Usually done in perpetuity (required for IRS)

• Acts as a continuing watchdog on historic integrity; not susceptible to changes in local government, etc.

• Donor receives charitable donation equal to appraised value (difference in fair market value, before/after).

• Same buildings as tax credits quality for the donation.

• First announced – early 2007; original application deadline was July 1, 2007; first-come, first-serve.

• 25% tax credit of qualified rehabilitation expenditures toward following Ohio taxes: dealer in intangibles tax, corporate franchise tax, personal income tax.

• There is no apparent limitation on the usage of the building; i.e., buildings can be both depreciable and non-depreciable (owner-occupied).

• Rehabilitation governed by same standards as the 20% Federal Rehabilitation Tax Credit

• Must show net tax benefit; must be factor in rehab

Ohio Historic Preservation Tax Credit


• What buildings are eligible? Listed individually on the NRHP, certified as contributing to a NRHD, certified as contributing to a historic district under a Certified Local Government, or “…individually listed as a local landmark by a Certified Local Government.”

• Properties in the Central Park Historic District are therefore eligible.

• The City of Mansfield can also individual list a building under its ordinance outside of a district, thereby creating eligibility for use of the credit.



STATSITICS OF APPROVED OHPTC APPLICATIONS 2007-11

Total project costs – $1.104 billion

Total qualified rehab expenditures - $854 million

Total tax credit - $203 million

Leveraged investment ratio – 5.44

PROBABLE CHANGES

• Geographic diversity• Project size diversity


• Certified Local Government grants – Mansfield is eligible – 70/30 available for 2009; can include acquisition and development of properties listed on the NRHP, as well as planning, survey work, staff work for preservation ordinances, public education, “pre-development” work

• Capital Appropriations Bill

• NTHP, including Community Investment Corporation

• Preserve America, Save America’s Treasures

• “Macro grants” – CDBG, Small Downtown/ODOD, transportation enhancement funding

Grants

• Most stimulus funding reaching downtowns will come through increased CDBG or transportation enhancement funding

• Ohio Department of Development made funds available for brownfield remediation, with priority given for asbestos removal in “historic buildings” (deadline for submission was March 30, may have future rounds)

• $5 billion Weatherization program funded by stimulus – funds can be used for restoration/repair for residential structures (including multi-unit)

Stimulus/Special Funding

• Various Federal and State affordable housing rehab credits

• Tax abatement, if available

• Large projects – New Markets Tax Credits

• Brownfield abatement funding

• Special Improvement Districts (SID) – Lancaster, e.g.

• Others – Preservation Ohio provides information on all available grants to individual members and Affiliate community residents

Other

Property Owners Conference - May 13, 2009Downtown Mansfield, Inc.

Thomas Palmer, Executive DirectorE-Mail: [email protected]: 614.437.8393 – Web: preservationohio.org

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Mansfield Downtown Property Owners Conference