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SPRINGFIELD'S historic downtown is undergoing some dramatic changes — changes aimed not at demolishing and replacing what is already there but at keeping it and making it better. In a $9.6 million downtown development effort known as the Lincoln Square Project, one square block of 19th century buildings just south of the popular Old State Capitol Mall will be rehabilitated for commercial and residential use. Although buildings in the southwest quadrant of the block will be torn down and replaced with a new apartment complex, the essence of the project is to preserve the square's architectural integrity and to put to good use the varied, elegant and colorful buildings which have graced downtown Springfield for more than 100 years. "If the project works, it will be a model for the Nation," wrote Illinois Times editor Fletcher Farrar Jr. in March. "Every town in the country is trying to figure out what to do with its old downtown, and they'll all come to Springfield for a look." A decade ago the Lincoln Square Project would not have been possible. Tax laws favoring new construction made it more profitable to demolish an old building than to repair and use it. Preservationists standing in front of bulldozers to save historic buildings were often viewed as standing in the way of jobs, profits and an expanding tax base. Today historic preservation and economic development go hand in hand. In fact, they can not go any other way: The financing package which enables Springfield to redo such a major portion of its downtown includes tax incentives for rehabilitating older buildings. A major attraction for out-of-town investors was the city's association with Abraham Lincoln — whose law office is one of the buildings in the project. Why are developers, investors, city governments and preservationists — if not always thinking alike — at least trying to work together? For years, preservationists have appreciated older buildings and styles of architecture. They understood the need for a sense of constancy with the community. Add to this the fact that today, the materials and craftsmanship that went into older buildings are often impossible or too expensive to duplicate in new buildings. The plain truth is it's cheaper to rehabilitate an old building than to construct a new one. A more interesting explanation is offered by Nanchen Scully, a Springfield restoration contractor who has pioneered rehabilitation of historic buildings in the city and surrounding areas: "Historically, all of our periods of distinct architectural style have been either during or in reaction to political and sexual conservatism. Historic spaces that are more exciting and flamboyant will command the highest dollar return, as people seek different means of creative expression." The delicate task is to balance the participants' various needs like a scale with equal weight on all sides. Developers and preservationists have different motivations for working together on preservation projects, but if the scale is properly balanced, the results will benefit not just the participants but all people with a pleasing environment. August 1983/Illinois Issues/19
Whatever the reasons, old buildings are looking better and better, both aesthetically and commercially, and the market for rehabilitated and recycled old buildings is expanding. The federal government now recognizes the desirability of preserving historic buildings and provides financial incentives to do so. These incentives, especially in the current tight money situation, have helped developers put together finance packages for the Lincoln Square Project and numerous others, large and small, across the state. The federal Tax Reform Act of 1976 started the trend by providing tax incentives to owners to rehabilitate historic buildings. Prior to this law, it was more profitable for an owner to demolish an old building and construct a new one. After 1976, incentives such as accelerated depreciation and rehabilitation cost write-offs, previously available only for new construction, were made available to owners of historic buildings. There were also penalties for demolition of a "certified historic structure" and a denial of accelerated depreciation for a new building on that site. (A "certified historic structure," in contrast to one that is merely old, is one that has been listed in the National Register of Historic Places or is part of a national or local historic district. See box on page 22.) The most recent federal law to encourage preservation is the 1981 Economic Recovery Tax Act (ERTA) which allows generous income tax credits and depreciation deductions for rehabilitating buildings at least 30 years old. Fear has been expressed, however, that some of the ERTA tax incentives are not restrictive enough and could easily be abused. (See box on page 22.) ERTA has stimulated many rehabilitation projects in Illinois. Whiting Hall in Galesburg, built in 1854, with 1885 and 1892 wings, as a Knox College dormitory now provides housing for the elderly as does a rehabilitated 1857 factory in Belleville. In downtown Rockford, the old Midway Movie theater, a 1918 cinema palace, has been restored to its former glory as a theater for stage performances. A Mount Carroll funeral parlor, built in 1871, is now a restaurant, and in Champaign, the Cattle Bank, a city landmark since the late 1850s, has been converted into an office building. Taking advantage of a 1982 revision of ERTA which makes it easier for a unit of government or a not-for-profit organization to rehabilitate its buildings, the city of Dwight converted the 1891 Chicago and Alton railroad station into city offices. Lincoln Square The Lincoln Square Project, which also uses ERTA provisions, typifies the mix of outside and local interests and public and private financing which is needed to put together a downtown preservation/development project. The developers are McCormack Baron & Associates of St. Louis. Baron and his partner Steven Stoegel have spent months getting agreement from the 30 property owners and finding financing for the project. The funds will come from local banks, public funds (including preservation tax incentives and tax increment revenues) and limited partnerships which have been purchased by investors nationwide. "This project could not have happened without the right combination of the three sources of financing," Stoegel said May 24 at a downtown development seminar. The ERTA tax credit will be used by the Lincoln Square developers for the rehabilitation of most of the buildings. The project will also take advantage of an Illinois law in combination with a U.S. law providing a tax deduction for the donation of a "conservation easement," which can include the facade of a certified historic building, to a preservation organization or municipality. The value of the Lincoln Square Project's conservation easement is estimated at $1.6 million. Besides the 1976 Tax Reform Act and ERTA, there are other incentives, both governmental and private, for preserving historic buildings. The emergency jobs bill recently passed by Congress includes provisions for historic preservation. Financed by the 5 cents a gallon gasoline tax increase, also just passed, the jobs bill designates about $25 million for preservation projects in the U.S. Restoring historic structures is labor-intensive work requiring many careful human hands and comparatively few materials. It is estimated that a preservation project will generally create about one-third more jobs than a conventional construction project. In Illinois the Department of Conservation (DOC) will administer the grants. 20/August 1983/Illinois Issues Other federal grants and loans are tied to economic development in downtown areas, which are often both architecturally rich and economically depressed. These include Urban Development Assistance Grants available from the U.S. Department of Housing and Urban Development, and Community Development Assistance Program grants and loans available from the U.S. Department of Commerce. Both programs are administered in Illinois by the Department of Commerce and Community Affairs (DCCA). DCCA encourages rehabilitation of existing buildings. Since 1980, it has also been possible to get loans from the U.S. Small Business Administration (SBA) for preservation projects. Under the provisions of SBA's "503" program, rehabilitation work is included as an acceptable fixed-asset improvement if the business meets the size standard of 50 employees or less. The largest of the private, not-for-profit organizations providing financial help for preservation projects is the National Trust for Historic Preservation (known affectionately as "the Trust"). Chartered by Congress in 1949, the Trust was then supported by individuals, corporations and private donations. Since the National Historic Preservation Act of 1966, the Trust has been a vehicle through which matching grant funds from the National Park Service are awarded and administered. The Trust studies the feasibility of incorporating preservation into the nation's economic development plans. Along with other groups it lobbied for the pro-preservation sections of ERTA and the jobs bill. Illinois Congressman Sidney R. Yates (D-Chicago) was recently honored by the Trust for outstanding leadership and achievement in preservation and for strengthening the movement by challenging preservationists to justify their work in economic terms. A major effort to merge economic development and historic preservation was the Main Street Project, which originated in the Trust's Midwest Office in Chicago in 1977. After being flooded with requests for advice from small towns and cities seeking ways to revitalize their downtown areas, the Trust selected three midwestern small towns for a three-year pilot program. Galesburg was one of the towns. Technical assistance and funds were provided for downtown revitalization and the results have been impressive. From this national program, the Main Street Illinois project evolved, but ended this year as a state-supported project. However, six other states now have programs to assist five communities within each state with help from the National Main Street Center in Washington, D.C. An important not-for-profit preservation organization in this state is the Landmark Preservation Council of Illinois (LPCI). That group was formed in 1971 in Chicago in reaction to plans to demolish the Chicago Stock Exchange Building built by Adler and Sullivan, two of the city's most famous architects. Efforts to save the structure were unsuccessful, but LPCI members turned to the long-term goal of developing a comprehensive preservation strategy for Chicago and Illinois. Supported by individual memberships, business and institutional contributions, LPCI is working on Chicago projects in the Tri-Taylor neighborhood on the west side and the North Loop redevelopment downtown. In addition, LPCI keeps track of all legislation in Springfield and Washington. It also maintains a fund to purchase threatened buildings and to initiate rehabilitation anywhere in the state. Bottom-line questions Obviously there is considerable support, both of a moral and a financial nature, for preserving and recycling old and historic buildings. But the bottom-line questions still remain. Which buildings should be saved? How should they be used? Can they be used in a way that will pay back the costs of saving them? The first question has been answered for many historic structures. They have been demolished. Preservationists call them "failures" and Historic Illinois (a DOC publication) features them regularly in "In Memorium." Among those honored recently was the Zion Hospice in Zion. The Zion Hospice is an example of a building which was torn down after strenuous efforts on the part of local government to save it. Built in 1902 to temporarily house men who had come to Zion to build homes for their families, the 350-room hospice was, until its demolition, the largest frame structure in the state. Converted to a residential hotel and then to a nursing home, the vacant building was purchased in 1978 by the Zion Park Board. Several plans to find a use for it fell through, and faced with staggering upkeep costs, the board demolished the hospice the next year. In the Lincoln Square Project the decisions about which buildings should be saved and their specific uses have been made largely by McCormack Baron & Associates with approval from the city council and advice from the Springfield Central Area Development Association (SCADA), a 26-year old not-for-profit group involved in development projects. In order to make room for a new 84-unit apartment complex, seven buildings were razed including the Tivoli Theater building in the southwest quadrant. But most buildings on the south and east sides will be saved, and most of the businesses currently occupying the first floors of those buildings (fronting the mall and 6th Street) will stay. (Most of the other businesses are relocating within the square or in the adjacent downtown area.) The second and third floors of the 6th Street buildings, from Allen's Cigar Store to the mid-block alley, will be converted into 10 apartments. The second and third floors of the Lincoln Law Office (corner of the mall and 6th Street) will remain a museum, and the rest of the rehabilitated building space fronting the mall will be for offices and the Springfield Athletic Club. Five of the buildings on 6th Street are of special historic significance. The most well-known is the three-story red brick Lincoln-Herndon Law Office building constructed in 1837. Lacking this legendary aura but considered significant are three other buildings on the same block: the Booth Building built in 1880 with three-sided projecting bays; the 1866 Booth-McCoskier Building (Allen's Cigar Store) on the corner of 6th and Monroe, which features a mansard roof; and a building at 213-215 South 6th with an arcade front and decorative corbeling, designed by architect George Helmle in 1885. These are among the many buildings in the project area that will be preserved and rehabilitated. August 1983/Illinois Issues/21 In general, Springfield has been enthusiastic about the project, willing to accept the loss of some buildings in order to preserve others. "I have no reservations about the Lincoln Square Project. It is not only viable for the developers, but it is also a substantial addition to the Springfield central area," said Kitty Little of SCADA. Scully voiced an important concern, however. "I want it to happen, but somebody local has to provide groceries, movies and other services for the people living there. Where is the local response?" According to Little, SCADA is currently looking for businesses that might serve the new residents of the downtown area, and a master plan includes projected "green" areas interspersed among buildings or as lawns for some projects. Countless examples of imaginative and economically successful uses for old buildings have emerged around the state in the last several years. One of the more interesting ones is in Aurora. That city decided to convert the Chicago, Burlington and Quincy Railroad Roundhouse and Industrial Shops to a city transportation center, thus returning the old railroad center — built in 1859 and listed in the National Register — to something approximating its original purpose. In every case of saving an old building, the bottom-line questions of cost and feasibility have to be resolved so that the partnership between economic development and historic preservation can work. The partners must be vigilant in maintaining the delicate balance of the scale, weighing their different needs and values. Efforts to make the partnership work to the economic benefit of developers, cities, investors and preservationists can result in the unmeasured benefit of beautiful cities and towns where living, shopping and visiting are a pleasure. Melinda F. Kwedar has worked as a research historian and writer for the Illinois Department of Conservation and the Clayville Rural Life Center. She was editor of Capitol Commentary for the Legislative Studies Center at Sangamon State University. Rehabbing: incentives, problems and process THE 1981 Economic Recovery Tax Act (ERTA) became effective January 1, 1982. Since then, in Illinois alone, it has stimulated investments of over $200 million for rehabilitation of historic structures. The key provisions of ERTA are a 25 percent income tax credit for rehabilitation costs and a 15-year straight line depreciation deduction for the cost of the building plus rehabilitation costs. There are, of course, regulations with which recipients must comply in order to qualify for these advantages. First, the building must be "certified" as a historic structure. (What certification means and how it is obtained are detailed below.) Second, the cost of the rehabilitation work must exceed either the net value of the building or $5,000, whichever is greater. Third, the rehabilitation work must be done in accordance with the Standards for Historic Preservation Projects, which are established by the U.S. Department of the Interior. Fourth, the property must be income-producing with a commercial, industrial or residential use. There are also benefits for older buildings which don't qualify for the National Register of Historic Places and have a commercial or industrial (but not a residential) use. Buildings which are at least 30 years old can qualify for a 15 percent tax credit for rehabilitation costs; buildings which are at least 40 years old can qualify for a 20 percent tax credit. These tax credits carry with them no restrictions except that 75 percent of the original exterior walls must be kept — a provision (or lack of provision) which has preservationists worried. Some owners of buildings which might qualify as historic structures are avoiding the lengthy certifying process and the rehabilitation regulations by simply taking the 15-20 percent tax credit. Although the nonrestrictive tax incentive can result in a credible reuse of older buildings, there is no control over what the owner does to the property. An owner can paint the building pink and purple and still get the tax credit. With public tax dollars financing the credit, preservationists emphasize that taxpayers have a right to know who is benefiting from ERTA and what values are being reinforced. A 1982 revision of ERTA specifies another kind of arrangement which allows entities, other than large developers, to take advantage of the tax benefits. In a sale lease-back arrangement, a government or historical not-for-profit group can sell its facility to a developer who will do the rehabilitation work and then lease it back to the original owner to use. With this new revision, a small town, municipality or historical society can have its building (at least 30 years old) rehabilitated by a developer and still be able to use it when the work is complete. The developer has the incentive of the tax benefits, and the people have a historic building to use. There are also Illinois laws that provide tax incentives to preservationists. One is for the donation of a "preservation easement which can include the facade of a "certified historic structure." The donor is eligible to claim a deduction for the easement as a charitable donation. This donation must be made to a preservation organization or municipality which would then monitor the architectural and historic character of the property. A reduction in the donor's estate tax and local property taxes may be an additional benefit. How does an owner or investor take advantage of these preservation tax incentives? The process was set up by the National Historic Preservation Act of 1966 and the Illinois Historic Preservation Act of 1976. First, the building must be a "certified historic structure." This means that it is listed in the National Register of Historic Places, is a "contributing structure" within a National Register Historic District, or is in a certified local historic district. The National Register designation affords protection against demolition. Each state has a National Register Program headed by a state historic preservation officer, who in Illinois is the director of the Department of Conservation (DOC). Any Illinois property owner, interested citizen, organization or governmental agency can apply for National Register listing through 22/August 1983/Illinois Issues
DOC which then sends the nomination forms to the applicant for preparation. These forms and accompanying information are presented at a quarterly meeting of the Illinois Historic Sites Advisory Council which makes recommendations to the state historic preservation officer. If the officer signs the nomination form, it is forwarded to the National Register Program within the National Park Service, a division of the U.S. Department of the Interior. If the national staff finds that the site meets the criteria, the building is listed on the National Register of Historic Places. According to a 1981 amendment to the 1966 National Historic Preservation Act, local governments can also participate in the designation process if they are certified by the state preservation officials at DOC. As of January 1983, there were 643 individual historic places and 86 historic districts in Illinois. This is a significant increase from 1977 when there were 250 individual sites and 38 districts. In the U.S. the number of individual listings almost doubled between 1977 and 1981, increasing from 13,538 to 24,347, according to a National Trust for Historic Preservation publication. The next step in the process of qualifying for tax incentives is getting the rehabilitation plans for the historic structure certified. Plans and actual rehabilitation work must follow guidelines set by the Department of the Interior's Standards for Historic Preservation Projects. According to the standards, "Rehabilitation means the process of returning a property to a state of utility . . . while preserving those portions and features of the property which are significant to its historic, architectural and cultural values." Specific recommendations concerning the environment, building site, structural systems, exterior features, mechanical systems and safety code requirements are listed. The DOC preservation staff evaluates first the plans and later the completed work before forwarding its recommendation to the National Park Service for final approval. Even if the building is certified, a new use, different from the original, can certainly be considered. The only restrictions on use itemized in the Standards are that "every reasonable effort shall be made to provide a compatible use for a property which requires minimal alteration. ..." This is called "adaptive use" by preservationists. It can also be thought of as recycling a building. This is not "restoration," which means returning a building or site to its condition at a particular date and implies a high degree of authenticity. Restoration in the strict sense of the word seems to be justified only for historic sites where a reasonable income from tourism is anticipated. For many historic buildings, adaptive use is a more realistic possibility. There are several factors to be considered in determining an appropriate use for a building. Most important is the building's physical condition. Can the structure withstand the changes required for the proposed new use? Another consideration in rehabilitation is energy efficiency. In the past, old buildings were seen as energy drains, but this view is changing. According to a recently published book, New Energy from Old Buildings: "We now have proof that the buildings with the poorest energy efficiency are those that were built between 1941 and 1970 and that old houses often use less energy for heating and cooling than do new houses." Some of the original energy saving features of an older building may have been altered or destroyed, but the basic design, suited to its site and climate, is often intact. With imaginative retrofitting to incorporate modern improvements, these original energy saving features can be used to their best advantage. Once a new use for a building has been determined, an architect or contractor should be selected who is attuned to preservation and familiar with the skills and materials required. However, many architects, contractors and craftsmen lack experience in preservation work, and until recently universities did not offer many architectural courses in this field. With a growing demand for rehabilitation and less new construction, architectural schools are responding to the market, including the University of Illinois which now offers a specialty in preservation. The preservation services staff of DOC can help with technical advice on rehabilitation work. The National Park Service also publishes Preservation Briefs from its Technical Preservation Services Division, which are available at DOC. These briefs deal with specific rehabilitation problems, such as: cleaning masonry buildings, repointing mortar joints, roofing, paint problems, repair of wooden windows and rehabilitating storefronts. The Illinois Preservation Series, published by the DOC, detail specific aspects of preservation technology. In addition the National Trust for Historic Preservation and the Landmark Preservation Council of Illinois will provide assistance with technical problems encountered in historic rehabilitation. There are also periodicals like the Old House Journal and the quarterly journal published by the Association of Preservation Technology that are available for help with building problems. For more information, contact: Department of Conservation, Division of Historic Sites, Preservation Services, 405 E. Washington, Springfield, Ill. 62706, (217) 782-3340. Melinda F. Kwedar August 1983 | Illinois Issues | 23 |
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Historic rehabilitation is now underway on this 1866 building fronting 6th Street in Springfield. The entire block, which includes the Lincoln Law Office, is part of the city's $9.6 million Lincoln Square Project, just south of the Old Capitol mall.
