The Importance of Tax Credits in Adaptive Reuse Projects
WHAT ARCHITECTS call adaptive reuse — retrofitting old buildings for new uses rather than replacing them — saw a boom in the United States “in direct response to the slash-and-burn mentality of urban renewal” of the 1950s and ’60s, says Michael Binette, a principal with The Architectural Team in Chelsea. The practice aligns with goals of the green movement, too, says Joseph Cornish of the preservation nonprofit Historic New England, because “all the energy and materials that went into constructing the buildings would be lost if they were torn down and carted away. It’s really recycling.” And it’s good for growth, say proponents of the practice, which is challenged in a new tax reform proposal.
Adaptive reuse’s first big Boston success story was the re-imagining of Faneuil Hall and Quincy Market beginning in 1967. The buildings, dating to 1742 and 1826, respectively, barely survived the mid-20th-century razing of the West End. But it wasn’t an obvious candidate for saving. A 2007 story in Historic New England magazine called it a “haphazard collage of metal siding, altered windows, and awnings.” A loose coalition that included Mayor Kevin White and leaders from the Boston Redevelopment Authority and the Society for the Preservation of New England Antiquities, along with historians and architects, initiated the project, and soon businesses flocked to sign leases in the prime spot, today a thriving hub and symbol of Boston. “Saving that historic fabric gives us more walkable cities, better overall quality of life, sustainability, and good urban planning,” says Binette.
But now the movement is being challenged. In February, US Representative Dave Camp of Michigan, who leads the House Ways and Means Committee, released a discussion draft of comprehensive tax reform that included a repeal of the federal historic tax credit, which preservationists say is crucial to continued development. Without the federal tax break and a similar one from the state, says David Listokin, a Rutgers professor of public policy, older buildings in mill towns like Lowell and Lawrence and in lower-income parts of Greater Boston like Everett and Chelsea would languish, just when these areas are beginning a turnaround led in large part by adaptive reuse. Condo and commercial construction in old warehouses — witness the Charleston Chew Lofts and Porter 156 — brings to struggling neighborhoods higher-income buyers, who then attract more small businesses and municipal improvements.
Adaptive reuse is “the most economic way to build in most cities,” says Lawrence Curtis, president and managing partner of Winn Development, which is based in Boston. “The cost of new construction in places like Pittsfield and Fall River can’t be supported by the rents in the marketplace. But if you build new units within a historic development or office space, government tax credits provide the economic incentive.”
According to a National Parks Service report, the credit, signed into law by Ronald Reagan in 1981, has over its life span created more than 2.4 million jobs, leveraged nearly $106 billion in private investment, and saved almost 40,000 buildings. Preservationists worry that its track record is now endangered, along with its impact on older cities like Boston. “Our cities look very different than they did before the historic tax credit,” argues Kathy Kottaridis, executive director of Historic Boston Incorporated, a nonprofit developer and preservation organization in Roxbury, “and it would be a shame to lose the gains we’ve made because of it.”