Dear Editor,

The City Council’s preservation initiatives carry with them the very real possibility of financial reward to property owners--both business and residential. Although nothing contained below should be construed as income or property tax advice, what follows is a general overview, or guide, to what is available.  Click here to read the table:  Brief Synopsis of Short Term Individual Structure Preservation Economic Benefits.

Although it would take much more space than is reasonably available here to more fully explain all the possible economic benefits reflected above, permit me to highlight just a few.

Regarding the tax credit, as an example for our downtown merchants, if a business owner has depreciated his or her $80,000 building for the last 30 years, he or she would have an adjusted basis of approximately $20,000. If he or she then spends $20,000 on qualified rehabilitation, he or she could receive a current year tax credit of $4000--the equivalent, in the 25% tax bracket, of an immediate $16,000 deduction, and would, at the same time, of course, have also increased the eventual sale price of [that] building.

Regarding a homeowner, there is an 8-year property tax assessment freeze and subsequent 4-year phase-in for qualified properties that are rehabilitated in accordance with the Secretary of Interior’s standards (the very principles that are adopted by reference in the City’s new ordinance.) In other words, should a homeowner perform substantial enough rehabilitation to his or her residence, he or she would, on application, maintain the lower assessed value for 8 years.  Any increased assessed valuation would be increased 25% a year over the subsequent 4 years. This financial reward is in addition to the other possibilities for homeowners listed above [in the table.]

Moreover, in the last decade, the City of Morrison has approved over $17,000 in exterior Building Improvement Program grants to homeowners and businesses, that are either Local Landmarks or lying within the local historic district.

In the longer term, it is quite clear that the creation of an historic district increases property values of those structures within it. An example of the same within close proximity is Rockford, [IL,] where, after the creation of two districts, a study was done to compare values and sale data, both before and after the districts’ creations. The complete report can be found on line at http://www.ci.rockford.il.us/government/community/index., but the summary is quoted as follows:

“Historic preservation commissions are sometimes viewed as obstacles in the path of historic district property owners who want to improve their homes or businesses, imposing an additional layer of regulations that is not worth the effort it takes to deal with. Based on our investigation, this is definitely not the case. In everything we looked at--assessed valuation, ownership rates, and sales prices--properties in local historic districts generally outperformed those in comparable neighborhoods.”

Maintaining the continuum of our streetscapes and structures is of benefit to us all.

Continuing regards to all,

Tim Slavin
Chair, Morrison Historic Preservation Commission