I attended a specialized workshop held in Providence, Rhode Island sponsored by the National Trust for Historic Preservation as well as the 1772 Foundation. As the first half of a two-part certificate class, the workshop covers the basic and essential knowledge about how to manage and develop historic properties in a way that makes most financial sense, while simultaneously satisfying the stewards of the properties, the investors/developers, the community, and in some cases, local governments.
It is worth pointing out that revitalizing an aging and endangered structure is often a labor, and cost-extensive task. Not-for-profit preservation organizations, especially those younger and less affluent ones, are unlikely to tackle such real estate projects on their own. In order to finance the restoration, maintenance, and marketing costs, voluntarily or not, historic-building-aficionados have to bring investors and developers on board. Compared to standard cookie-cutter projects, the risk and uncertainty that are inherent to the nature of historic real estate can easily turn away potential investors and developers. To solve the dilemma and save our building heritage, I believe that preservationists need to speak the language of the developer, understand the mechanisms of real estate investment, and utilize all the available tax benefits and low-interest loans.
During the course, through a series of case studies (adapted from real world projects throughout the country), I learned about the detailed requirement for a project to be qualified for the Rehabilitation Tax Credit. Deducting numbers from formulas and filling out spreadsheets help me putting the concept into context. The hard numbers give me definite answers, rather than an ambiguous impression, about who can use them, for how long, and for how much (e.g. the value of each one dollar of tax credit is often discounted due to the syndication process). By improving the Pro Forma and cash-on-cash return rates, I see the huge difference tax credits can make by turning a reluctant developer into an active one while transforming a financially impossible rehabilitation project into a somewhat lucrative one.
My experience in Rhode Island went beyond the classroom and extended to a visit of five rehabilitation works under the supervision of the Providence Revolving Fund (PRF). During the special tour, I got inside several beloved but endangered historic properties in Providence. I was inspired by the stories about how the PRF managed to secure sources of funding and by their master plans of designated new lives of those building. The visit completed my learning experience, for the hard numbers were once again converted back to bricks and mortars, and by so giving the project some human touch, and hence, less like a heartless business.
I am thankful to the National Trust for Historic Preservation and the 1772 Foundation for providing me the scholarship. I have benefited a lot from not only the instructor but also my fellow students, 20 experienced preservationists from all over the country that have spent an average of 5-10 years struggling to fight for a better future for our irreplaceable architectural heritage. It is my wish to finish the second half of the course in the coming month and contribute more to the preservation field with my newly equipped knowledge.