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Reaping Historic Rewards

How Michigan can encourage many more public and private preservation projects

September 10, 2003 |

From Marquette to Detroit to Grand Rapids entrepreneurs and enlightened civic leaders are unleashing the beauty and value locked inside old buildings. Abandoned houses, dilapidated theaters, sagging stores, and crumbling post offices — not to mention factories, lighthouses, ships, mining towns, and other historic places — are being transformed into new homes, entertainment venues, business centers, and tourist attractions.

In every case these preservationists navigated the treacherous shoals of community acceptance, permitting, finance, design, construction, and marketing. In every case featured in this report, they added to the common good and community prosperity.

This report documents how facets of Michigan’s history have become powerful engines of economic growth that attract residents and visitors to our cities and towns. The report also shows that these accomplishments were often tests of personal endurance and will.
Whether the project was as large as restoring Detroit’s Orchestra Hall or as comparatively small as reviving a bed and breakfast in Allegan, developers uniformly embraced a work ethic of heroic dimensions and, sometimes, a level of risk-taking that few can tolerate. These are obstacles that state government should help preservationists overcome.

After all, Michigan already provides such support in other economic arenas. The state aggressively offers loans, tax breaks, technical expertise, and regulatory flexibility to manufacturers, engineering firms, publishers, and many other enterprises to persuade them to either move or expand their activities here.
Such state-sanctioned business recruitment adds to Michigan’s economic well being, but frequently at a high price: Much of this new development occurs in green fields, far from town centers, promoting sprawl and greatly increased public infrastructure costs, traffic congestion, and environmental harm. It also drains vitality from Michigan’s cities and inner suburbs.

This report demonstrates that, just as Michigan assists large companies, it should also encourage citizens and small businesses — and not just the heroic ones — to undertake historic restoration projects. The benefits to entrepreneurs, citizens, communities, and the state are unmistakable and potentially immense.

They are also entirely predictable: Revitalized downtowns. Less sprawl. Restored neighborhoods. Expanded employment. Increased property values and tax revenue. Livelier cities that attract the young workers Michigan needs to compete. In short, relatively modest state support of and investment in historic preservation would reap long-lasting economic benefits and rebuild a sense of community in villages, towns, and cities. Michigan has an enormous opportunity to actively assist people, companies, and local governments transform abandoned, historic sites into fountains of prosperity.

Other States: A Wealth of Examples
Our research indicates that Michigan needs to be more competitive in the historic preservation arena. Other states are already using innovative techniques to boost historic preservation and economic competitiveness.
Out West, New Mexico’s Historic Preservation Division makes below-market-rate loans for the restoration of certified historic buildings, while Colorado’s State Historical Fund annually spends $15 million from gambling tax revenues to support preservation projects. California’s State Historic Building Board actively facilitates the efficacy, energy efficiency, and safety of historic preservation projects.

Closer to home, Renaissance Kentucky, a consortium of banks and state agencies, helps rehabilitate more than 100 downtowns with loans and grants. Even local governments are engaged: In New Jersey, for example, Somerset County invests approximately $1 million a year in preservation.

Identify, Coordinate, Invest
This report recommends four crucial shifts in Michigan’s approach to historic preservation.

First, local and state governments must better inventory historic buildings and sites and help developers identify those with the potential for successful rehabilitation.

Second, local and state governments must help developers navigate more quickly the permitting, regulatory, zoning, financing, construction, and marketing steps preservation projects require.

Third, local and state governments should invest in rehabilitating historic buildings for their own offices instead of building new ones. Officials should view the reuse of historic buildings as opportunities to help their state fight sprawl while performing their duties in education, transportation, housing, health care, emergency services, and economic development.

Fourth, state and local governments must provide the kinds of financial support, tax relief, technical guidance, and other economic incentives for historic preservation projects that they do for large companies.
We specifically recommend the following:

I. Identify opportunities for historic preservation.

  • Provide fiscal incentives to local governments to gather and standardize information about historic sites, including those in brownfields.
  • Encourage local governments to include historic resources in their
    master plans.
  • Include this data in the state’s existing statewide geographic survey.
  • Support the efforts and expand the programs of the State Historic Preservation Office (SHPO) in order to foster the preservation of Michigan’s historic resources.

II. Make preservation projects easier to undertake.

  • Establish “one stop shops” to provide historic redevelopers with state, local, and federal regulatory, technical, design, construction, and financial assistance.
  • Facilitate better communication and cooperation between voluntary historical societies and appointed historic commissions.
  • Promote the state’s existing building restoration codes for preservation projects.
  • Support and expand the Michigan Main Street program through the SHPO and the Michigan Economic Development Corporation.

III. Make governments better partners in stimulating historic preservation.

  • Require the state to consider using old buildings before constructing new ones.
  • Offer incentives to local governments to do the same.
  • Mandate state agencies to coordinate highway building, housing, economic development, tourism, education, and resource development to encourage historic preservation.
  • Mandate school districts to comply with local historic preservation requirements.

IV. Provide sufficient financial support for historic preservation.

  • Establish a revolving, low-interest loan fund and a Michigan Historic Preservation Trust Fund to support rehabilitation projects, easements, and property purchases.
  • Allow developers to convert tax credits into capital to finance their projects.
  • Expand tax credits to target redevelopment in urban areas.
  • Increase incentives for restoring properties eligible for the National Register of Historic Places that are located in brownfield sites, Renais-sance Zones, Core Communities, and the new Commerce Centers proposed by the Michigan Land Use Leadership Council.
  • Support and promote regional programs for heritage tourism, and encourage more flexibility in the use of public funding sources to support them.
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