Send it Packing

Yesterday I received an interesting call from Dinah Grossman who started and runs Spinning J a very intriguing coffee shop, café and bakery in Chicago.  She called to inquire whether the owners of the Comet Diner might have an interest in selling the diner.  Dinah grew up in Western Massachusetts and had recalled the building.  Her business, located in what she freely calls a “difficult” neighborhood, is thriving and she believes that bringing the Comet to Chicago would be the perfect strategy to grow her business and to contribute to neighborhood development.

My response although cautious was to tell Dinah that the owners would be more than happy to rid themselves of the Comet in fact it has been a stated desire.  My knowledge of moving buildings however suggested that transporting the diner would be expensive.  To my great surprise during our conversation I learned that there is a building mover which specializes in moving diners around the country and that the cost was relatively humble she believes $25,000-40,000.  Diners like the Comet were mostly manufactured and trucked to various sites in pieces. So, it is entirely economical to move from one location to another. In doing a Google search of diners moving you can find a lot of examples:

and the diners moved and restored by Diversified Diners.

In preservation terms, I am excited that the Comet can be preserved and cherished.  Imagining a new life as a neighborhood revival beacon and once again assuming a life as was originally intended.  Good for Dinah and good for Chicago that these historic structures are in demand.  Yet I view this good fortune as a loss for Hartford.  The Preservation Alliance has worked to a considerable degree in trying to revitalize the six blocks along Farmington Avenue and hopefully having the Comet as the keystone to a foundation of economic renewal. We have researched and explored many possibilities.  These all would reuse the Comet in its original purpose to feed, in a humble manner, folks who live in the neighborhood but to become a beacon for travelers, visitors and others who know what diner food usually portends! So many avenues to explore regarding access to good food as a cost-effective response to meals typically served up at convenience stores.  On a local, state and national level there are funds to create and sustain programs to contribute to better health in a neighborhood such as Asylum Hill. Linking the West End Farmers Market to a commercial kitchen for cooking classes educating folks how to take advantage of fresh food to address community health issues, preventive methods to eat well and be healthy.  Often I have written about creating a food truck center a strategy stoking neighborhood revival in cities across the country.  No interest or enthusiasm has been ignited.

This is Hartford.  We find the fault and the impossibility of a new idea.  We fear the neighborhoods and are incapable of seeing the possibilities.  Not once have I been greeted with a response such as that of Dinah Gossman in Chicago –  a diner has the potential of recreating a tough community and to bring promise.  Rather most inquiries have led off with how might the diner be gotten rid of to develop soulless buildings taking advantage of neighbors.  Recently an observation was made that folks would be nostalgic as they asked what happened to the Comet?  “We have such great memories of that magical place.”  Indeed, why preserve the diner which exists?  Let’s allow Dinah and her vision to create new horizons, new memories to snatch the Comet away.

Who wants to attend the going away party?

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Reinvestment to Community Core

We have reached the halfway mark, more or less, of the 2017-18 Legislative Session and the news for preservation is positive.  As they say of the fat lady needs to sing but one can only hope that she is warming up.  Two very critical items need to pass: fully funding the Community Investment Act (CIA) funds for the next year and an increase to the cap for the State’s Historic Tax Credit cap.

During the past few years the Legislature has approved a “sweep” of funds from the CIA coffers which has been a problem for funding preservation activities throughout the State.  These monies fund affordable housing, open space, dairy and historic preservation.  For us CIA provides grants to fill gaps in renovation to historic buildings such as the Harriet Beecher Stowe House, funds preservation of churches and municipal buildings like City Hall in Waterbury. These funds also allow minimum financial support to organizations such as HPA.  All critical funds which are otherwise difficult to assemble. A blog posted in January laid out the benefits brought about through CIA funding and how very important it is in Hartford.  Therefore, it is good news that the funds will largely remain intact.  Fingers crossed and please don’t forget to contact your elected officials letting know that you support them and their decision regarding historic preservation.

The bill to which we are paying close attention is SB 819 which proposes to raise the State Historic Tax Credit cap to $ 60 million.  This would double the credits available for preservation projects around the State.  We in Hartford have basically realized a downtown renaissance because these commercial tax credits have supported projects which have brought life into buildings long vacant and abandoned.   Signature residential projects such as 777 Main Street and the Capewell Lofts, representing a reuse of former commercial buildings, would not have been financially feasible without the contribution of equity represented by the historic credits.

As my colleague, Daniel MacKay, executive director of the CT Trust, testified before the Commerce Committee:

“What we want to underscore, however, is that this program is currently playing a significant role in underwriting Connecticut’s economic recovery. This state tax credit program represents “last dollars in” to a project. Clean-up, investment, redevelopment, and occupancy, with job creation all along the way, occurs before the state credits are issued. We must sustain this program’s growth and availability to assure that the long-term planning and investment in historic property redevelopment. We are asking the General Assembly to send the signal that one of the state’s best performing, most geographically diverse economic development tools will remain readily available, without interruption or constraint, to attract continued investment back to our communities, with consequent benefits for both local and state tax revenues and general economic activity Beyond the numbers, at the core of my testimony is a call for the General Assembly to act in support of program sustainability and stability. Re-development is often a tricky business. There are risks and there are costs. Investment in historic properties, even more so. The State Historic Tax Credit program fills a critical gap that usually exists when financing historic property redevelopment.”

We are cautiously optimistic that the Legislature views greater access to historic tax credits as an engine to promote community economic development.  The bill was passed out of the Commerce Committee and sent to The Finance Committee for study. Of course the fat lady remains in the wings but we surely hope that she will be allowed to sing her heart out.


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Unintended Consequences (Part 2)

If you have paid attention to the first installment of the State Historic Tax Credit series (gee, I hope so) you realize the incredible financial power of and the unique opportunity we have in Connecticut to encourage historic preservation.  If a building is deemed historic and is vacant and abandoned commercial structure the State Historic Preservation Office (SHPO) can award a tax credit for 25% of the construction cost to rehabilitate it.  The tax credit is redeemable to provide a financial resource for development.  Connecticut is one of a few states to offer a robust tax credit incentive.

Annually Connecticut has allocated $ 30 million in tax credits for commercial projects.  In highlighting the work of the Capital Region Development Authority, I highlighted projects in Hartford which could make financial sense with the addition of the tax credit resource.  In turn this has sparked a renaissance of the urban activity so sorely lacking in downtown.  SHPO reports that throughout the State 1,515 new units of housing have been created since the program’s inception, 797 of these are affordable.  Reuse of abandoned buildings brings an economic engine to help the cities in Connecticut through sales tax on construction materials, income tax revenue for wages paid to all associated with the project; architects, engineers, workers even the coffee vendors who sell items on the sites.  Last but by no means least is the real estate value increase realized by putting a vacant building back into productive use.  Value increases the tax base on which cities generate taxes to operate.  Further, if the vacant building next door suddenly comes to life the value of adjacent properties also improves.  It is not difficult to understand that historic tax credits, as a financial development component, are an incentive of real merit.

What could possibly go wrong with this key resource?  Popularity!  Since the tax credit program was launched interest in utilizing them has increase exponentially.  As developers and investors have grown to rely on the resource demand has grown to outstrip supply.  We work on a fiscal year as do most states which means our year runs from July to June.  SHPO has already announced that the pool of historic tax credits has already committed for the next fiscal year 2017-2018!  In doing its best to accommodate new projects they have made commitments for next year.  This is not able to be sustained and so rather than issue commitments the State has now begun to issue “reservations” which are not treated the same for purposes of assembling a project.  Basically, there is less certainty.  Uncertain of the financial structure of a project causes investors to hold back their commitments.

Since historic tax credits generate financial benefits for communities a logical response would be to call for a larger allocation of these.  As we know the State is struggling with its budget which has been made clear in cuts all of us have realized.  A tax credit means a reduction in revenue to fund the State’s operation.  A profound effort is to be made this Legislative Session to increase the credit allocation.  A benefit analysis is hard to develop because so many subtle components are involved. Take for example the increase of the municipal tax base driven by rehabilitation of vacant and abandoned buildings.  Studies do not exist to make the argument that greater not fewer tax credits are an economic engine.  There are many competing needs which need to be weighed to balance the State’s budget.  Although we in the field of historic preservation feel that the argument is financially practical it is hard to get the opportunity to make the case before our legislators.

What to do?  If urban community economic development is important to Hartford, then your voice needs to be heard by our delegation.  Recall that we have 5,300 deemed to be historic properties here.  Historic tax credits for redevelopment are critical.  We need your help in simply writing a note to your elected officials to voice your support for an increase of the State Historic Tax Credit allocation.  Find your legislator

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Historic Tax Credits in Hartford Economic Development

Hartford, as most major cities in New England, spiraled into a deep real estate decline in the later 80’s.  Developers in anticipation of building commercial projects had purchased many historic buildings in downtown, torn them down and left major swaths of empty lots.  Our Main Street is testament to the destructive acts which tore apart the fabric of the City.  Still today much of this remains leaving surface parking lots where once stood 19th and 20th Century buildings of true architectural merit. The ghosts of buildings never-to-be-built haunts downtown development and stymies the recreation of a tax base on which to operate Hartford.

In its wisdom the Connecticut General Assembly created and capitalized the Central Region Development Authority in June 2012.  Established with the challenge to do the following:

  • To stimulate new investment, provide for multicultural destinations and a vibrant multidimensional downtown
  • Attract major sports, conventions and exhibitions
  • Residential housing development
  • Operate, maintain and market the Connecticut Convention Center
  • Stimulate family-oriented tourism, art, culture, history, education and entertainment
  • Manage designated facilities
  • Stimulate economic development in the Capital region
  • Development and redevelopment property within Hartford
  • Facilitate the relocation of the area State office buildings

This charge has been skillfully managed by Michael Freimuth the CRDA Executive Director, acknowledged as a man of wisdom and vision who has made tremendous contributions to the revitalization of Hartford’s Downtown. He has brought financial resources to a strategic investment policy in projects which have made an impact on the Capitol City bringing new and vital development.  His challenge has been a big one be involved with housing, retail, cultural, tourism and to manage large facilities owned by the State.  For those of us in Hartford doing work to revitalize the city Mike’s presence is felt throughout.  CRDA has become one of the most helpful allies in recognizing that historic preservation contributes to community economic development.

Connecticut has a robust State Historic Tax Credit with both residential and commercial allocations.  These credits have provided a powerful financial tool to reuse and preserve buildings deemed to be historic.  Hartford has many such buildings with an interesting twist defining historic as those 50 years of age or older.  Many of the larger abandoned buildings are surprisingly defined as being historic; many have started their productive life as commercial office space.  Developers have realized that the buildings may be reused as residential properties.  The most striking high-profile development has been the reuse of 777 Main Street, formerly known as the Bank of America Building (originally built for Hartford National Bank), a tall, prominently located building on Main Street, State House Square.  However groundbreaking for Hartford 777 Main Street is only one of several projects to bring people into the City.  CRDA has participated in nine adaptive reuse projects of vacant and abandoned historic buildings.  In a city with a significant low-income population CRDA has been able to navigate successfully the desire to produce affordable housing units matched with an economic development strategy to attract market-rate units.  One excellent example of an adaptive reuse of an historic gem in downtown is the Judd & Root Building at 179 Allyn Street, whose renovation has revitalized a central district.  New tenants relocating to downtown or being attracted to living in Hartford now are creating a retail demand for goods and services, restaurants and entertainment venues.

After decades of decline Hartford is witnessing a true renaissance.  There is life on the streets once again.  Even though many historic buildings have been lost forever there is still sufficient fabric to attract community development.  The concept of adaptive reuse plays a significant role in bringing to life buildings which seemed to have lost their practical opportunities to contribute, and to pay taxes, once again in Hartford.

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A Puzzle

315-capitol-ave-bWe were recently notified of a potential demolition of an historic house located on Capitol Avenue.  In following up we discovered that the owner of the property had purchased it as a preventive strategy to protect its substantial interests next door.  We sought a meeting to discuss opportunities and found that the owner was completely frustrated with trying to sell the property, for 5 years!  Seems that no one wanted to undertake a rehabilitation which would be expensive and ultimately cost more than the property would be worth.  Now long-abandoned and home to squatters the owner has grown concerned and wants to be rid of the costly headache.  One can be sympathetic, we know from great experience that often the cost to rejuvenate a property may exceed its investment.  However, we offered to explore how to become the white knight.  With experience in real estate development, finance, historic renovation technical assistance and a familiarity of market trends we determined to see what we could do.

Informing the owner that financial resources exist to mitigate the rehabilitation cost and our contribution of in-kind development and architectural services could make the project feasible for a moderate-income homeowner. Hartford needs community-based models of smaller properties to help spark more neighborhood revitalization step-by-step.  We proceeded to draw plans, assemble a development budget and make inquiries into resources to successfully model a preservation project of note.  ( I failed to mention that the boarded up property greets motorists who take the exit from I-84 to reach the Capitol and/or the State Armory.  Welcome to Hartford!)  A perfect teaching model of how to utilize the unique Homeowner Tax Credit Program offered by the State Historic Preservation Office would be presented to the public as we bring a house back to life.


So, the puzzle?  Although we have made good progress to assemble the project the property owner has gone silent.  Attempts to discuss how a purchase might be organized have met with a vague response.  Two of which have us scratching our heads: 1. We are anxious to have the project move forward more rapidly (remember the property has been owned for 5 years and in serious decline during that period) and 2. What happens, after renovation, regardless of it being owner-occupied, and roughly $400, 000 is spent on the project, that it falls into ruin once again?  Sadly without further information we are coming to the belief that the owner of the property simply wants to demolish the building.  As I often say “don’t confuse me with the facts, my mind is made up”.

At a time when the City of Hartford sorely needs community economic development and to have properties on the tax rolls.  The historic fabric of the City needs to encourage cost-effective models of rehabilitation and the State of Connecticut offers very robust financial incentives to accomplish the work.  We are both disappointed and honestly feeling as if the owner has not engaged with us in a good faith conversation.  Historic preservation matters in Hartford, economic development matter more so we only wish that or time and talent has not gone to waste.

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