Forum Journal & Forum Focus

In Missouri, Preservation Makes Economic Sense 

12-09-2015 17:35

Every governor’s perspective has been changed by the events of September 11, 2001 - by their impact on our sense of who we are as a people and a nation, and by their impact on our economy.

Asked a year ago to write an article about the importance of historic preservation in Missouri, I would have begun with a statement about my love for the historic homes in which my wife and I have had the pleasure of living.

The pleasure we take from living in the historic governor’s mansion and from the homes we have rehabbed together hasn’t diminished. But my perspective has changed.

On Memorial Day this year, we rededicated the Liberty Memorial in Kansas City, a glorious monument to those who served in WWI. In a sense, of course, we were rededicating ourselves in the aftermath of September 11, honoring our history, those who made it, and the structures and sites that recall that history.

The decision to restore the Liberty Memorial was made well before that event. The project would not have happened were it not for the dedication Kansas Citians showed in 1998 when they overwhelmingly approved an 18-month, one-half cent sales tax for the rehabilitation of the monument and the creation of a museum on the site. The state of Missouri contributed $4.8 million toward the project and the Missouri General Assembly appropriated another $10 million from a veterans’ fund created by gambling revenues. An additional $5 million came in the form of federal appropriations, a contribution that also brought the assistance of the state historic preservation office via Section 106 of the National Historic Preservation Act of 1966 as amended. Private sources are being tapped for another $25 million.

Clearly, the preservation of our heritage does not come without cost.

In Missouri, the ecnomic downturn exacerbated by the events of last September has required us to cut funding for a number of programs from the 2003 budget. Among those cut was the historic preservation revolving fund, designed to assist in the preservation of Missouri’s most fragile historic resources-those for which there is no immediate economic utility.

Fortunately, the future is brighter for the vast majority of Missouri’s historic buildings - precisely because they play a key role in the state’s economy. Many of the same historic buildings that are daily reminders to Missourians of the people and groups who have contributed to our state and nation also draw visitors to our state. Missouri’s tourism industry generates over $12.5 billion per year and provides jobs for more than 250,000 Missourians. In turn, the preservation of the historic buildings so important to Missouri’s cultural tourism generates 13,800 additional jobs in the construction industry. In Missouri, rehabilitating historic buildings is a $346 million industry. Cooperation between Missouri’s Department of Economic Development and its state historic preservation office, a part of the Department of Natural Resources’ Outreach and Assistance Center, is a key component of many of those construction projects.

Preservation Tax Credits Provide Economic Boost

The Missouri Historic Preservation Tax Credit Program helped jump start that industry. Administered by the Department of Economic Development, the tax credit program is reviewed by the state historic preservation office for compliance with the Secretary of the Interior’s Standards for Historic Rehabilitation.

The passage of the bill creating these 25 percent tax credits in 1997 literally halted the demolition of the International Fur Exchange Building, located across from the Gateway Arch in downtown St. Louis. The conversion of the Fur Exchange into a Drury Hotel began an ongoing boom for rehabilitating buildings in St. Louis’ historic downtown for use as hotels. More importantly, the steadily increasing number of hotel rooms has not reduced the occupancy rate. St. Louis ranked fourth among the top 25 markets in the United States in January - June 2002 occupancy rates. The owner of one of the newest hotels downtown boasts that his hotel is booked full for the next three months.

Because of their flexibility -- they apply to owner-occupied residential property as well as to depreciable property and have no recapture provision -- Missouri’s tax credits have spurred owner-occupied residential as well as commercial development. They have become a powerful tool for increasing homeownership in our largest urban areas. They have also spurred the revitalization of the storefronts that line the Main Streets of our rural communities.

West Plains, population 10,866, lies in the heart of the Ozarks, another of the state’s popular tourism destinations. West Plains is not only the largest town within a 100-mile radius, it is also home to the only buildings in the county listed in the National Register. Like many of the more than 100 National Register nominations (many of them for large districts containing hundreds of buildings) reviewed annually by the state historic preservation office staff, the Elledge Arcade buildings and the Smith building were nominated in order to facilitate their economic development. State and federal historic rehab tax credits made it possible to restore the historic buildings to their original appearance. These projects also restored 9,000 square feet to West Plains’ stock of useable commercial space.

Only two people had been employed in the buildings before the rehab; today 25 people work there - and join tourists lunching and shopping in nearby stores. Tenants in the rehabbed spaces include an architect, a lawyer, an environmental services company certified by the federal government, and a purveyor of specialty foods.

The historic rehab project is giving the West Plains economy an immediate boost. The buildings’ owner estimates that the businesses utilizing the additional square footage will generate five times as much sales tax revenue as the businesses in place before the rehab, and that the county will see a fourfold increase in property tax revenue for the same lots.

Chillicothe, population 8,966, lies 300 miles north of West Plains. Like West Plains, it is home to the only National Register site in its county, an Episcopal church. That may soon change. Chillicothe’s business owners have made contributions to the Chillicothe Industrial Development Corporation (CIDC) in return for Missouri Neighborhood Assistance Program (NAP) tax credits. The NAP, administered by Missouri’s Department of Economic Development, enables non-profit organizations such as the CIDC to raise private-sector funds for approved community improvement projects. One of the first projects on CIDC’s list was the designation of two National Register districts, the necessary first step toward obtaining state and/or federal historic preservation tax credits. As I write this, the consultants have completed their work and the nominations are awaiting review by the Missouri Advisory Council on Historic Preservation.

Active Main Street Programs

Further east, on the banks of the Mississippi River, tiny Clarksville, population 490, is home to one of the most successful Main Street programs in the state. All of its Main Street buildings are currently occupied and tourists flock to town in December to see the bald eagles who winter there. Our state program was initiated by the Department of Economic Development in 1989 to implement legislation passed by the 84th Missouri General Assembly. As is the case with the state’s Historic Preservation Tax Credit Program, the state historic preservation office provides architectural review and assistance in preparing design guidelines for the state’s Main Street Program.

Main Streets in still smaller towns across the middle of the state are also seeing new shops open, thanks to the conversion of the abandoned Missouri-Kansas-Texas (MKT) Railroad line into the Katy Trail State Park. At 225 miles, it is the nation’s longest “rails-to-trails” conversion project. Developed by our Division of State Parks, the trail begins on the banks of the Missouri River one block from the historic Main Street district in St. Charles, just up the river from St. Louis. It closely follows the river before cutting through the rolling farmland of west central Missouri and ending in Clinton, about 50 miles south-east of Kansas City.

Locating Government Facilities Downtown

One of the largest towns on the Katy Trail is Jefferson City, the state capital. It lies in the center of Missouri, intentionally accessible to all her citizens. Across from the Gover-nor’s Mansion and one block from the State Capitol lies another rehabilitation project made possible by state and federal tax credits. The former Governor Hotel, now the Governor Office Building, has been converted into offices and leased to state agencies.

To encourage more such developments in the heart of other communities, I signed an executive order in December 2001 requiring new state buildings and leased facilities throughout the state to be located in downtown districts. This policy change doesn’t just support historic preservation efforts in cities and towns of all sizes across the state, it also makes good business sense. Not only does it take advantage of the already-existing infrastructure, it also helps communities retain stable downtown business districts. It is simply good customer service for state agencies to be available to the public in convenient, central areas.

One of the first communities to profit from my executive order will be Cape Girardeau, population 35,349. Built just before the Great Depression in the elegant Spanish Revival style, the six-story Marquette Hotel in the center of town has been vacant since the late 1970s. On July 12, 2002, the state of Missouri signed a 10-year lease for office space in the Marquette. The state’s commitment to the preservation of urban centers and the commitment of our state and federal legislators to historic preservation tax credits will make possible its renaissance.

It may seem ironic that historic hotels in Jefferson City and Cape Girardeau are being rehabbed as state office buildings while in St. Louis historic office buildings and warehouses are being rehabbed as hotels. But I believe that the ability to fill those spaces is a sign of continuing economic vitality. And the will to fill them is a sign of Missouri’s dedication to our children and their children -- to their sense of their roots and to their economic well being.

Publication Date: Fall 2002

#MainStreet #historictaxcredit #ForumJournal

Author(s):Bob Holden