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Historic preservation-specific economic support for your legacy business program.
Traditional historic preservation funding methods were designed to preserve and restore tangible elements of cultural heritage, such as historic buildings, not intangible elements like legacy businesses. Most economic benefits derived from historic preservation require that buildings be listed or qualify for historic registries before they are eligible. Many legacy businesses do not occupy buildings that qualify for historic registries on their own merit, yet the business itself may be historically and culturally significant to a neighborhood.
However, with effort and adaptation, the process to receive economic benefits from historic preservation can be reframed to meet the needs of your legacy business program and the businesses it supports. This will require you to partner with your municipal government and its Office of Historic Preservation (OHP) to broaden local preservation criteria to include the social, historic, and cultural significance of long-standing legacy businesses. It will also require a shift in how significance is interpreted, away from the traditional, tangible elements of a “place” toward a more people- and culture-centric approach.
This may prove to be a difficult task and should not be attempted without the cooperation and partnership of your local OHP. Nevertheless, doing so successfully can open a host of economic support tools for the building owners and, in some cases, business owners, in your program. For example, preservation grants can be used for façade restoration, accessibility updates, or physical improvements. Additionally, historic preservation tax abatement and state of federal rehabilitation tax credit programs can provide powerful incentives for building owners to work with your legacy business program to keep legacy businesses in place in their communities. The following sections outline some of the historic preservation benefits that could be reframed and adapted to support legacy business programs.
Certified Local Government (CLG) Grants
The Certified Local Government (CLG) Program, implemented in 1980 as part of the National Historic Preservation Act and administered by the National Park Service, creates a partnership between local, state, and federal governments to help preserve historic places. Local governments receive certification through the National Park Service and their State Historic Preservation Office (SHPO) by outlining and demonstrating a commitment to historic preservation. Once certified, CLGs are eligible for federal and state historic preservation grant funding. For example, California allocates 10% of the annual federal funding it receives through the Historic Preservation Fund Grants Program (HPF) to CLG grants.
Currently, no examples of GLG grant funding for legacy business programs have been found, but that does not mean future funding for your program is out of the question. CLG funding is limited in its use, but municipalities could allocate it to help building owners of legacy businesses with storefront renovations, ADA compliance, or code upgrades as part of historic preservation efforts.
National Trust for Historic Preservation Grants
While not commonplace, the National Trust for Historic Preservation recently provided a grant program specifically supporting legacy business initiatives. It is worth checking what grants they have available to see if they support your legacy business program.
Preserve Route 66 Legacy Business Grant Fund
The National Trust for Historic Preservation’s Preserve Route 66 Legacy Business Grant Fund provided economic support to historic and legacy businesses along the Route 66 corridor. Grant money was made available to business or building owners to support improvements for independently owned legacy businesses associated with historic Route 66 that had been in business for at least 18 years. They also offer a historic small restaurant grant program.
Case in point.
BIPOC, Ethnic, and Immigrant Preservation Grants
There have historically been government and nonprofit preservation grants that served BIPOC, ethnic, and immigrant communities, which are often underrepresented in historic preservation efforts. Be sure and determine if any of these grant programs are currently available, and if they align with the needs of your community.
National Park Service Grants
The National Park Service historically offered preservation grants, such as the African American Civil Rights grants program, which served underrepresented communities. This type of program could align with and serve BIPOC legacy businesses in your program if they are restored under future administrations.
Case in point.
Municipal Historic Preservation Tax Exemption or Abatement
While not common, a few states, including Florida, Texas, and California, allow municipalities to offer tax-exemption or tax-abatement programs for historic properties. These programs offer property tax exemptions or significant reductions for building owners who maintain their properties to the municipality's standards (which can also be influenced by state and federal guidelines). Your local Office of Historic Preservation (OHP) is the starting point for defining how these might be adapted for use in a legacy business program. If you can include these types of tax tools in your program, examine how you can tie the reduction in property tax to a decrease in rent for your legacy business owners.
Mills Act | California
California’s Mills Act is a statewide program that enables municipal governments to significantly reduce property taxes for building owners who follow local preservation standards and guidelines. It offers a 40-60% reduction in property taxes that can be used for maintenance and improvements to meet local standards. Local municipalities define how the program is implemented, providing some flexibility for including legacy business property owners (though this has not yet been tested).
Case in point.
State Historic Preservation Tax Credits
According to the National Trust for Historic Preservation, 39 states have adopted state-level historic preservation tax credits that amount to 10-15% off property tax. This can be used in addition to the federal Historic Tax Credit. Adapting these credits to support legacy business programs is possible, but, given the effort involved, should be undertaken after already available credits and incentives are established. It would require partnering with your State Historic Preservation Office to create a method for applying them to those programs. This may require defining or redefining commercial corridors or historic districts, redefining historical significance or defining context statements to support legacy businesses, or creating new requirements geared toward legacy business occupancy and long-term leases (borrowing from San Francisco’s model). Some states, like Missouri, have already adapted their statewide programs to allow additional tax credits at the municipal level, so it is possible.
Additionally, states like Maryland, New Mexico, Ohio, and Virginia offer varying percentages of income tax credits for building owners who meet preservation criteria. This means that a credit for any income derived from their properties is eligible for a state-defined income tax credit. While not as powerful an incentive as a property tax credit, it could be adapted in a similar fashion to serve legacy business programs.
Federal Historic Rehabilitation Tax Credit
The federal government offers a 20% income tax credit for the rehabilitation of commercial historic buildings. This credit is not accessible to many building owners who house legacy businesses because it requires that their building be listed individually in the National Register of Historic Places or be a contributing building to a listed historic district. Making these tax credits more accessible to individual legacy business buildings would require significant changes to the eligibility criteria or their interpretation, or you and your partners (including the local OHP) would need to interpret the eligibility standards creatively. In the latter case, for individual businesses, the Traditional Cultural Property (TCP) approach might be an option, or you could reinterpret the definition of a historic district to include contributing buildings that house legacy businesses.