I have known that there are financial incentives to landmarking a property since 2009, when we first decided to remodel our house. Karen McWilliams, the city’s historic preservation planner, gave me all the handouts that describe what landmarking is all about and what the benefits would be to me as an owner. But even though everything she gave me was written in plain English, I still couldn’t really wrap my head around it.
Now I’m on the Landmark Preservation Commission which makes recommendations to City Council regarding landmarking properties. (The owner contacts the preservation planners to express interest. The preservation planners help research the history and architecture of the property, then bring the proposal to the LPC. The LPC moves to recommend that the city council landmark the property. The city council landmarks the property.) We also make recommendations on how city historic preservation loans are given out. And despite participating in such things for the last 9 months, I still didn’t feel like I really had grokked* the financial end of things.
So I decided to go through the list of incentives with some very specific examples in order to get a better handle on the city, state, and federal financial incentives to landmarking. I chose a small, medium, and large sized example project and ran the numbers through an incentive calculator. I came up with a pretty detailed spreadsheet of information (see link below), but I’ve shrunk it down to the Quick View version below (for the purposes of this post).
The state of Colorado offers a tax credit that can be used for either residential or commercial properties that have been historically landmarked. You can get up to 20% of the cost of your renovation project handed back to you by the state. So if you look at the chart above, suppose you were to do a small project (Let’s say you’re going to repaint your house and put on a new roof for a total of $25,000.), you would take the total figure, determine what 20% of that is, and you’ll get a dollar-for-dollar credit of that amount on your state taxes that year.
But let’s say that you don’t owe the state $5000 the year you do your painting and re-roofing project. No worries. You’ve got 10 years in which to get the maximum value of that credit. This credit tops out at $50,000 every 10 years. So you can do another project on your house and earn up to another $50,000 state income tax credit every ten years. This is money that is yours to keep. It’s not a loan so you never have to pay it back. Sweet!
There are a couple of other incentives for residential historic property owners. The city of Fort Collins offers a zero interest loan of up to $7,500 for approved exterior work on your house. So if you need your windows repaired, your brick repointed, or some other exterior work done, you run it past the Landmark Preservation Commission (LPC) and, if approved, you get a loan towards the work that you don’t have to pay off until you sell your house. These loans are essentially a way to make use of the equity in your home while keeping it well maintained. A well maintained home should sell for more in the end, thereby covering the cost of the loan.
There’s also a design assistance program that anyone in the Old Town area can use, whether it’s for a historically designated house or not. (So yes, even if your house was just built just a couple of decades ago, if you want assistance in designing an addition, or new garage, or what have you, you can take advantage of this program.) Through the program, the city will pay $2000 towards design assistance from a pre-selected group of local architects and craftsmen (or should I say “craftspeople” since they’re not all men).
Some residential properties can go through what’s called an “adaptive reuse.” That means they’re no longer going to be used for their original purpose. Expenses involved in repurposing an old building so that it can continue to be used are also covered by some of these financial incentives. That means some interior work, as long as it’s approved, can receive some of these same incentives. Oh yeah! That just rocks.
When you take a gander at the commercial incentives, that’s when your jaw will really hit the floor. On top of the same incentives that residential landmarked properties get, there’s a whole ‘nother crop of possibilities for commercial projects. One of the biggies is a federal tax credit that works a lot like the state tax credit, only now you can use both. … Wait. Did you catch that? In addition to getting a 20% tax credit from the state, you can also get a 20% tax credit from the feds. (If you could hear me while you’re reading this, you’d hear me singing those last words.) And next summer the state commercial credit will be popping up to 25%. So scroll back up to that chart again real quick-like. You’ll note that the state numbers under commercial are already at the 25% rate. So for a million dollar commercial project, you could get $250,000 back from the state and $200,000 back from the federal government. It’s like a one-two punch, only nobody is getting a black eye. These incentives are a win-win for the government, as multiple studies by the Colorado Historical Society have shown repeatedly in both residential and commercial based studies. I referenced some of those studies back in my Preservation – More than just a point of nostalgia post back in July.
You don’t have to live in a fancy-pants creeky old building to get landmark designation. There are four “standards” that are used to determine if a house can be landmarked.
- Standard A: Events. This property is associated with events that have made a recognizable contribution to the broad patterns of the history of the community, State or Nation.
- Standard B: Persons/Groups. This property is associated with the lives of persons or groups of persons recognizable in the history of the community, State or Nation whose specific contributions to that history can be identified and documented.
- Standard C: Design/Construction. This property embodies the identifiable characteristics of a type, period or method of construction; represents the work of a craftsman or architect whose work is distinguishable from others by its characteristic style and quality; possesses high artistic values or design concepts; or is part of a recognizable and distinguishable group of properties.
- Standard D: Information potential. This property has yielded, or may be likely to yield, information important in prehistory or history.
I want to summarize what I’ve learned as I’ve wracked my brain sorting out these incentives and how they work. There are essentially three kinds of financial incentives: 1) Tax-rebates where you get money back for work you’ve had done. This is money that you get to keep. It’s yours. 2) Zero interest and low interest loans. The zero interest loans are paid back when you sell your house, so they’re not only off in the distance, but they’ve gone towards things that are going to increase your house value in the end anyway. And the low interest loans for commercial properties are probably a better deal than you’re going to get from the bank. And 3) there are grants for commercial properties. You have to do the whole song and dance things to win the grant, but once it’s yours, it’s yours. You don’t have to pay that money back (you just have to account for how you spent it).
If you want to get deeper into the nitty-gritty of all this like I did, you can check out the following resources.
- The spreadsheet that I developed as a way to sort through all of this — Preservation Incentives
- The older, less spreadsheety version of almost the same thing that the city has on hand — Financial Incentives
- The Design Assistance application (There’s also a beautiful brochure, but the file is too large for me to include here.) — Design Assistance Application
- Here’s a page on the Colorado State Register of Historic Properties. Being recognized by the state and being recognized by the city are two different things. But you’ll see that the criteria is almost identical and many incentives are the same.
Any house that is 50 years old or older can be considered for historic landmark designation. So if your house was built in 1965 or earlier, you could be considering this. In other words, this isn’t just for Old Town properties.
If you’d like to talk with someone about landmarking your property, contact Karen McWilliams or Josh Weinberg in the historic preservation office. (You can find their contact information on the department page of the city’s website.)
*Grok: That’s geek-speak for “understand at a intrinsically deep level.”
|Watch for another Then and Now post next Friday. If you missed last week’s, check out how the “A” used to look in 1929.|
Sources for this article:
I shamelessly copied lines right out of the city’s financial incentives sheet and put them into the spreadsheet that I made. One time, when talking over my spreadsheet with Karen McWilliams to make sure it was accurate, she corrected me on something I had written down. I exclaimed, “But that’s right from your handout!” and she explained that it’s been awhile since the handout was updated. So not only does the preservation office know that I copied their document, but they even made a few corrections. 🙂
The photos of the houses are from the agenda from the last LPC meeting. LPC members aren’t the only people with access to these agendas. Any time you’re having a hard time falling asleep, you can look them up, too. (Actually this last agenda was incredibly interesting. If you check it out, look for the historic background on the South College property. It’s so worth the read. And most of it was put together by the daughter of the applicant.) To view the agendas, go to the historic preservation page on the city’s website, then click on Landmark Preservation Commission in the right hand column, and lastly click on the link to the latest agenda. When it says “Summary Agenda” that means just the list of what’s going to be covered. The juicy bits are in the regular old agenda. So if you want pictures and details, select “Download Agenda.”