One brick at a time, downtown Columbia is getting a face-lift and a little government help to pay for it.
Another historic preservation project has been completed downtown, funded in part by tax credits specifically for that purpose. John Ott, owner of The Paramount Building at 29 S. Ninth St., will host an open house today to show off the results of his tax credit project, which was one and a half years in the making.
Meanwhile, around the corner, Charles Franklin removed one of the much-discussed concrete canopies from the front of his building at 1025 E. Broadway last weekend to take advantage of the credits before the end of this fiscal year. He had been improving the building, which houses the Penguin Piano Bar, for the past year.
“The building needed doing anyway, but as long as we could get a tax credit we thought we might as well,” he said.
He said he went beyond the amount of work necessary because the tax credits made improvements more affordable.
“Getting the tax credit certainly is an incentive to do better than one would normally,” Franklin said. “You can be a bit more lavish with your spending.”
Franklin and Ott are two of five developers who have taken advantage of the state tax credits initiated in 1998 which, when added to the federal credit, allow investors to write off on their taxes up to 45 percent on the work they put into projects. Though Missouri leads the country in historic tax credit projects, Columbia has only recently begun making a contribution to that ranking.
A 20 percent federal credit has been available since 1986, and Missouri added its own 25 percent credit in 1998.
Since then, the number of tax credit projects has ballooned, and the state went from issuing credit for 20 projects in 1999 to 179 in 2004. So far, the state has granted about $300 million in tax credits for about $1.5 billion in projects.
“I think more people find historic rehab projects attractive since the state is involved because it makes the economics of it more sound,” Ott said. “We’re talking about up to 45 percent of what you spend on buildings, and that needs to be the way because historic preservation is more expensive than some other types of construction.”
Historic preservation consultant Deb Sheals said people have been reluctant to undertake tax credit projects because of confusion over the details. Some think they will then have to be open to the public, while others are afraid of the paperwork.
Those people may be missing out on big benefits, Ott said. He has completed other historic renovation projects and said the paperwork is not difficult. He said his spruced-up building on Ninth will be a big draw for new tenants.
“I can ask for higher rents now that there have been improvements made,” he said.
Carrie Gartner, director of the Columbia Special Business District, said rents rise partly because renovated buildings have fewer problems that tenants often have to fix themselves, like plumbing or air conditioning.
“It’s amazing to be in an old building that’s architecturally significant, but the plumbing also works,” Gartner said.
Even those who could potentially be hurt by the increase in property value say the benefits outweigh the risks, at least for now. Joy Castillo, owner of Natural Groove clothing resale shop on Cherry, said her only concern is that rental spaces may become too expensive for small-business owners downtown as renovation increases property value. That might leave only large franchises with the means to fill space downtown.
“Those people have a lot of financial resources,” Castillo said. “If the property becomes more appealing and more attractive, they could become much more attractive to anchor stores.”
Her store, previously called Calamity Jane, was in the Atkins City Centre on Ninth Street before that building was slated for renovation — one of the most prominent tax credit projects completed downtown. Tom Atkins moved Castillo’s business into another building of his on Cherry Street so it wouldn’t have to close during renovation. She said the move was unrelated to leasing costs.
“I really don’t want to be perceived as being in opposition to tax credits at all. We have to compete with big malls and strip malls if we want to keep alive and well,” Castillo said. “And alive and well means attractive and appealing.”
Lisa Bartlett, owner of The Vintage Shop, said she likes what the tax credits are doing for downtown. She hopes that if rent increases due to building renovation become a serious issue for small local businesses, the city will intervene with some sort of incentive for owners to keep small businesses in their storefronts.
Gartner said she often works with businesses and building owners to shuffle businesses around and find the best fit for building owners and tenants. She said she doesn’t see prices becoming a major issue in the near future.
Only two of about 500 tax credit projects have been completed in Columbia, which has been much slower than other areas to take advantage of the credits. But highly visible projects and downtown’s addition to the National Historic Register early this year appear to have inspired interest in the credits.
Columbia completes one or two projects each year, historic preservationist said. There are seven projects under way, all commercial and mostly located downtown.
Interest in the tax credits really took off downtown with completion of the City Centre, Sheals said. She began to get calls from people looking specifically for buildings they could renovate, something that never happened before the state program began.
Proponents of tax credits cite numerous advantages, from aesthetics to job creation to sales tax generation. Statistics from the Missouri Department of Economic Development show that the City Centre project created 32 jobs. Sheals said most projects create jobs, though those jobs aren’t always reported to the department.
A consultant for historic preservation projects statewide, Sheals said Kansas City and Springfield are two cities who have been standing out in terms of taking advantage of tax credits available. Kansas City has completed 41 projects and Springfield has finished 16. Columbia may be able to look to Springfield as a model for downtown renovation, Sheals said, because the town is a hotbed of preservation activity and its downtown has seen a renaissance in the years since the state tax credit was initiated. Activity has been driven in part by a loan program sponsored by the city, which helps people improve building façades.
Columbia has followed in Springfield’s footsteps in getting recognition on the National Register of Historic Places. Adding Columbia’s downtown to the list in March through the efforts of the Downtown Columbia Association opened the door for businesses located there to qualify for the historic tax credits.
Sheals said downtown isn’t the only area where tax credit projects could take off.
“An area just ripe for the picking is East Campus,” she said. “I’ve been surprised that there haven’t been tax credit projects there.”