Since industrialization, urban centers across the country have been building up. Early multi-story masonry buildings gave way to glass and steel skyscrapers to create the skylines that have become iconic for many cities. In the 1920s and 1930s, technology and design collided to create the International Style of building that became the prevalent blueprint for modern construction for many decades.
But what is to be done about the millions of square feet that have been left vacant and obsolete when businesses abandon these towers for new facilities or more convenient locations?
One option is to rehabilitate them using historic tax credits. Because of the modern forms that many of these buildings take, it is easy to forget that they may in fact be eligible for these valuable tax incentives. In order to be eligible for the federal 20 percent historic rehabilitation tax credit for income-producing properties, the building must at least meet the following criteria:
- Be 50 years or older;
- Be eligible for the National Register of Historic Places either individually or as part of a district;
- Meet the basis requirements for rehabilitation.
(For a full explinataion of eligibility requirements, click here.)
A quick translation of these requirements means that buildings built before 1967 that have historic significance either architecturally or culturally – which is often an easy case to make for these imposing buildings – and require a large scale make-over are ideal candidates for the federal program, and in many cases state programs as well.
With the recent move towards less traditional office spaces in industrial warehouses and even digital conference rooms, developers must be creative in vision for the reuse of commercial business district office towers. In many cases, these buildings are being converted into apartments, condominiums, and hotels as Millennials and Baby Boomers make the move back to urban areas. These uses are also in keeping with the standards that must be adhered to for rehabilitation and successful historic tax credit projects as often the layout of offices and corridors can be retained in order to create dwelling units.
MHA has provided historic consulting services on the rehabilitation of historic commercial business towers in many cities around the country:
Rehabilitation projects of this size require a tremendous amount of oversight in order to successfully qualify for rehabilitation credits, but they prove time and time again to be marketable and successful for developers who take the risk. It is only a bonus that they help to protect historic skylines, and in many cases improve them.