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IOWA IDEAS 2019
OCTOBER 3-4 CEDAR RAPIDS

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In downtown Decorah, historic preservation is often too expensive for building owners

State resources, more local oversight may be the solution

Aug 27, 2019 at 7:00 am
    Architectural details are seen on the exterior of the Hotel Winneshiek in Decorah on Wednesday, July 3, 2019. The Decorah Commercial Historic District is eligible for historic preservation dollars, but few building owners have taken advantage of the opportunity to renovate. (Rebecca F. Miller/The Gazette)

    DECORAH — When the mid-19th century J.C. Penney building in downtown Decorah came up for sale about six years ago, Stan Fullerton bought it, in part, for “self preservation.”

    At the time, Fullerton had three downtown properties and wanted to ensure the main street staple remained in good condition. He planned to sell it to the right person, one he could trust to take care of the iconic building when J.C. Penney closed up shop two years ago.

    “The facades were not being repaired. It just looked like things were not going in the right trajectory at the time,” Fullerton said.

    He never found a buyer, but Fullerton did get interest from potential tenants, so he got to work rehabilitating the building so Impact Coffee could move in. However, he did it with an energy-efficiency mindset, not one necessarily set on historic preservation, despite Decorah’s downtown commercial district being placed on the National Register of Historic Places in 2017.

    The city’s historic preservation commission received a $25,000 Historical Resource Development Program grant in 2016 from the Iowa Department of Cultural Affairs to help prepare its nomination for the National Register. The district includes about 130 buildings, said Mark Muggli, Decorah Historic Preservation Commission chairman.

     

    The designation opens up a number of grants and tax credit opportunities for rehabilitation of historic building in the district.

    But since the designation, no building owner has taken advantage of those opportunities to help fund work, Muggli said.

    “The honorary designation encourages people to think historically when they work on their buildings,” Muggli said. “I will admit I’m disappointed that we haven’t had anybody apply for state and federal grants because some of the rehabilitation that has gone on the last two years would’ve been better if they had followed federal standards.”

    Fullerton is one of those building owners who did not participate. The timing of state historic preservation grants made it difficult, he said. And restoring a building to the historic level of accuracy required by grants and tax-credit programs would be cost-prohibitive, he said.

    “If you’ve got to go and make everything as they want it, you would run into exorbitant costs,” Fullerton said. “It’s certainly disappointing, but yet it didn’t change what I wanted to do with the building. I still feel like you can make buildings retain the character but not necessarily be totally accurate.”

    One of Fullerton’s biggest challenges would be the cost of finding and restoring historic windows, which the building lost in a 1930s renovation. Another common cost-saving measure in downtown Decorah is plastering over historic brick buildings when they begin to fall apart instead of restoring them.

    For the National Register nomination, the commission was required to hire a professional consultant, and members figured total costs would be about $30,000. The grant required 25 percent in matching funds, which the commission raised from private donors.

    Without that grant, Muggli said it would be challenging for a historic preservation commission to prepare the National Register nomination. But it’s also a good public relations move for both the state to invest in historic preservation projects and for a project to get the state’s seal of approval.

    “It’s challenging for some places, but I also think we need to remain aware that at the federal and state level, there is a belief in historic preservation,” Muggli said.

    State resources

    To encourage historic preservation, Iowa provides a historic-preservation tax credit program administered by the Iowa Economic Development Authority as well as a number of grants from the Iowa Department of Cultural Affairs.

    The tax credit provides about $45 million in allocations each year for 45 to 50 projects, said Dan Hansen, Iowa Economic Development Authority historical tax credit project manager. Five percent of those funds are reserved for small projects, or those under $750,000 in qualified expenses, which often could be historic home rehabilitations.

    The credit provides 25 percent of eligible expenses, which are outlined on the federal level, to the recipient if the building is contributing to a National Register district or is individually listed on the register.

    “If you were able to pick up the structure and shake it, anything that doesn’t fall out is eligible. We are looking at what is it going to take for a building to be occupied, regardless of its use,” Hansen explained.

    The goal for the state is to have $180 million worth of historic preservation going on throughout the state, Hansen said. And the biggest determining factor for major projects in the tax credit application process is its readiness.

    “We want to make sure these projects are ready to go and the probability of being completed is the highest possible,” Hansen said, adding factors such as a project’s financial status and whether it has local government backing, among others.

    The Department of Cultural Affairs’ main historic preservation grant is the Historic Resource Development Program grant that the city of Decorah received for its National Register commercial district application.

    Last year’s round of allocations for history grants totaled almost $690,000, said Michael Morain, Iowa Department of Cultural Affairs communications manager.

    “They are meant to supplement. We understand that historic preservation projects can be very expensive, and we want to help as much as we can. But a lot of times these grants from the state are leveraged to help with private fundraising,” Morain said, adding that state grants can act as a stamp of approval for a project instead. “Very rarely does a state grant cover all of the costs for a project.”

    Morain said the grants panel is cognizant of the need to spread the dollars across the state, not just in major population centers. The department also has a separate pool of money for grants to help preserve and maintain one- or two-room county schoolhouses.

    When it comes to where the state puts its grant dollars, Morain said Iowans can contact lawmakers to request more money go to a specific kind of grant or his department will notice trends in historic preservation and either redistribute money where it’s needed or make a case at the Statehouse for more.

    Morain said the state also offers options such as a technical advisory network to give guidance to potential grant applicants.

    When it comes to the value Iowans place on historic preservation, Morain said that could be demonstrated by the number of certified local governments in the state. That designation means a city has passed a law establishing a historic preservation commission.

    Iowa has 92 certified local governments, according to the National Park Service database. That’s the third-most in the country, just behind Utah at 96 and Georgia at 99.

    “I think Iowans recognize that historic properties can really boost community pride and be a tool for economic growth. The bumper sticker phrase is, ‘New ideas need old buildings,’ ” Morain said. “At the state historic preservation office, we really try to encourage that and nudge Iowans to think about the properties that make their town different from the town next door.”

    Local level

    Building owners tend to take on historic renovations projects themselves in Decorah rather than use tax credits or grants for preservation, said David Lester, general manager of the Oneota Community Food Co-op, which operates in two downtown buildings, and owner of a historic building himself.

    Lester renovated his late 1890s building where he lives on the second floor and rents the bottom level to an acupuncturist.

    Lester didn’t receive any historic preservation tax credits but did get a five-year tax abatement from the city. He did his best, however, to incorporate history into his building, pulling plaster off bricks and finding vintage doors to install.

    “I think it’s safe to say Decorah has heavily relied on private investors and owners to do stuff,” Lester said.

    Paul Cutting of Decorah, a high school teacher who does historic preservation work, said he has concerns the work going on in the downtown’s historic buildings is too modern or contemporary without building owners pursuing the federal standards attached to grants and tax credits.

    Cutting’s solution is more local government oversight, with codes such as historic district overlay zones and facade design requirements, to ensure building owners reach a higher historic preservation standard when renovating their buildings.

    “None of it has ever been done in a way to lend itself to what the district can be,” Cutting said. “I don’t think Decorah is being well served.”

    Cutting restores historic houses, cabins and barns and works with the Porter House Museum in Decorah.

    The city, however, was an early adopter of National Register districts. It established a residential district, called Broadway-Phelps Park Historic District, in 1976.

    While not all homes have a perfect restoration, Muggli said, homeowners have “a general sense of obligation about it.”

    Despite the lack of historic preservation projects in the commercial district, Decorah leaders are working on a similar National Register nomination for Luther College, Muggli said.

    Some of Luther’s buildings — dating to the 1920s to 1960s — are historically significant, he said.

    And a Luther district designation would complement the city’s first two districts, Muggli said, adding he hopes to receive a grant similar to the one that followed the commercial district’s nomination.

    “We think it would be a great combination because we have this residential civic National Register district. And then we got the commercial district,” he said.

    “And then to have an institutional educational district would be sort of like the perfect trifecta.”

    • Comments: (319) 339-3172; maddy.arnold@thegazette.com

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