Photo: Litchfield County Courthouse in Downtown Litchfield, CT
Historic buildings are a critical piece of maintaining unique and authentic communities. They link the past with the present and are icons intimately tied with the identity of a place.
Many have outlived their original purpose and sit vacant, underutilized, and neglected – not necessarily for lack of love – but because the challenge of repurposing these properties is considerable. They often don’t comply with modern codes, need updated HVAC and electrical systems, face regulatory burdens, and require extensive renovations – in other words, they are expensive to repurpose.
As a result, the immense promise and potential of these buildings is frequently overlooked. Uncovering reuse opportunities requires understanding physical, market, financial, and community feasibility - the four feasibility tests:
A critical first step is to understand the condition and reuse potential of the historic building. This means finding an architect that specializes in historic buildings to conduct a comprehensive building assessment. A building assessment will examine the existing systems, structural integrity, code compliance, etc. to provide a baseline understanding of rehabilitation needs and magnitude of costs. The assessment should also produce floorplans that will help inform the development of reuse plans for the building.
It is also essential to understand local and regional market conditions. A comprehensive market analysis will uncover the types of uses for which there is strong and unmet demand and could potentially be a good reuse option for the structure. Is the community underserved by restaurants? Is there pent up demand for quality apartments? Are businesses not locating in the community because of a lack of office space? The market study will also reveal constraints and barriers that might be prevent new investment such as regulatory constraints, burdensome processes, infrastructure needs, etc. Additionally, the market analysis should examine the location and context of the building to understand its market potential. Will traffic counts and visibility be attractive to a retail business?
Market opportunities should be aligned with the physical feasibility assessment to determine realistic reuse options that work within the physical limitations of the building and will be supported by market conditions. Identifying the unique attributes of the building that can be incorporated into reuse plans to make a more marketable project is also essential. Are there features and fixtures that can be preserved to help retain its historic charm? Are there unusual features (e.g., an historic walk-in bank vault) that can be purposed to capture or complement a market opportunity?
The market analysis identifies uses for which there will be sufficient demand, but it doesn’t necessarily mean that redeveloping a property for that use will pencil out financially for a developer. The financial feasibility assessment will examine development proformas for various concepts to determine whether future revenue (sale proceeds or rental revenue) will make the redevelopment cost worthwhile.
Typically, a “funding gap” exists for adaptive historic reuse projects requiring a 'layer cake' of additional and sometimes creative sources. Some of the funding sources available to make historic reuse projects viable include:
- Historic Rehabilitation Grants
- Historic tax credits
- Tax increment financing (TIF)
- Tax abatements
- Opportunity Zones
- New Markets Tax Credit
- Low Income Housing Tax Credit
Public and political support for reuse projects is often necessary to attract private developers who want to know that they won’t run into resistance that will cost time and money. Political support from the early stages is critical as historic reuse projects may require public-private partnerships or other public assistance.
A strategic approach to challenging historic properties that examines physical, market, financial, and community feasibility is the key to successfully repurposing these buildings and ensuring their long-term viability and contribution to authentic and desirable places and communities.
For more information on preservation of historic properties, see this presentation: