Within the past week, I have had the opportunity to listen to our Mayor Bronin speak about Hartford. He participated on a panel of four Connecticut mayors speaking at the State Historic Preservation Office conference in Storrs.  Each was asked about the successes of community economic development brought about by historic preservation projects in their cities.  These mayors of Vernon, New London, Danbury and Hartford called the “lovables”, by moderator Helen Higgins former executive director of the CT Trust for Historic Preservation, highlighted signature projects which sparked the rejuvenation of their cities and making the downtowns livable once again. Impressive projects have been completed and the economic effect on these cities is remarkable.

Mayor Bronin listed the revitalization projects in downtown Hartford involving millions of dollars of private and public investment now to bring residents where once stood vacant and abandoned buildings for many years. Roughly 1,500 new residential units have been created by the adaptive reuse of historic buildings; some quite old and others built in the 20^th Century yet all now enjoying near full occupancy.  Hartford seems to have come alive as a capital city located at the physical crossroad of the state but on the verge of being the hub of economic vitality it has been for centuries. This spring we welcomed a professional ball team, the Yard Goats, in a new stadium.  A hot jazz club is now located in The Flying Monkey restaurant located at Brainard Field our regional airport. As a resident I must sit back and admire that in the main Hartford appears to be on the rise.  Sadly the daily news of one problem or another misses an appreciation of the steady beat of progress.  Unfortunately one thing we in Hartford do all too well.

Last evening I sat in on Mayor Bronin’s town hall meeting to learn about the budget being proposed.  It is not a happy thing to live with for we residents.  All things being equal the city faces a budget shortfall of roughly $40 million. As the capital city, greater than 50 % of the real estate is tax exempt.  It is a small city and the financial imbalance of the tax-free real estate is a burden which is not sustainable. Of course, we look to the State for financial relief and receive it however this year it simply is insufficient.  Looking to the State we realize that it too grapples with a deficit which compounds the problem of seeking aid. So, but for all the amazing investment in Hartford, the reality is going to be a hard challenge.

Mayor Bronin has done a terrific job of promoting a concept of “regionalism”, whereby the surrounding towns share in the financial burden of Hartford.  For example, the waste treatment plant which is tax exempt serves nearly all the surrounding communities.  It seems logical that a shared approach benefits all towns and municipalities.  Connecticut was founded on the inefficient concept of self-rule meaning that 169 towns possess their own government.  We therefore employ 169 dog catchers and so on.  Cities around the country benefit from a regional or consolidated government.  I am most familiar with Indianapolis which has had a unified government since the 1960’s.  That city of 700,000 is comprised of a region of 1,300,000.  There are no “us versus them.” Rather Indianapolis comprises an operating mentality of “we”.  This is a dream and a very hard sell for Hartford.  Mayor Bronin has taken on the additional job of doing the hard work to improve the current financial situation and establish a sustainable future for the Capital City.  We can help.  As was noted last evening we, the residents of Hartford, need to celebrate all the things that can make Hartford a first-class city.  Think Jazz Fest,  Puerto Rican Festival, Winterfest, First Night, the River, Coltsville, etc. On any given night, the opportunities to amuse are endless.  But for the cynics, Hartford is just a fine place to live, work and play. Let’s prove them wrong!

We have reached the halfway mark, more or less, of the 2017-18 Legislative Session and the news for preservation is positive.  As they say of the fat lady needs to sing but one can only hope that she is warming up.  Two very critical items need to pass: fully funding the Community Investment Act (CIA) funds for the next year and an increase to the cap for the State’s Historic Tax Credit cap.

During the past few years the Legislature has approved a “sweep” of funds from the CIA coffers which has been a problem for funding preservation activities throughout the State.  These monies fund affordable housing, open space, dairy and historic preservation.  For us CIA provides grants to fill gaps in renovation to historic buildings such as the Harriet Beecher Stowe House, funds preservation of churches and municipal buildings like City Hall in Waterbury. These funds also allow minimum financial support to organizations such as HPA.  All critical funds which are otherwise difficult to assemble. A blog posted in January laid out the benefits brought about through CIA funding and how very important it is in Hartford.  Therefore, it is good news that the funds will largely remain intact.  Fingers crossed and please don’t forget to contact your elected officials letting know that you support them and their decision regarding historic preservation.

The bill to which we are paying close attention is SB 819 which proposes to raise the State Historic Tax Credit cap to $ 60 million.  This would double the credits available for preservation projects around the State.  We in Hartford have basically realized a downtown renaissance because these commercial tax credits have supported projects which have brought life into buildings long vacant and abandoned.   Signature residential projects such as 777 Main Street and the Capewell Lofts, representing a reuse of former commercial buildings, would not have been financially feasible without the contribution of equity represented by the historic credits.

As my colleague, Daniel MacKay, executive director of the CT Trust, testified before the Commerce Committee:

“What we want to underscore, however, is that this program is currently playing a significant role in underwriting Connecticut’s economic recovery. This state tax credit program represents “last dollars in” to a project. Clean-up, investment, redevelopment, and occupancy, with job creation all along the way, occurs before the state credits are issued. We must sustain this program’s growth and availability to assure that the long-term planning and investment in historic property redevelopment. We are asking the General Assembly to send the signal that one of the state’s best performing, most geographically diverse economic development tools will remain readily available, without interruption or constraint, to attract continued investment back to our communities, with consequent benefits for both local and state tax revenues and general economic activity Beyond the numbers, at the core of my testimony is a call for the General Assembly to act in support of program sustainability and stability. Re-development is often a tricky business. There are risks and there are costs. Investment in historic properties, even more so. The State Historic Tax Credit program fills a critical gap that usually exists when financing historic property redevelopment.”

We are cautiously optimistic that the Legislature views greater access to historic tax credits as an engine to promote community economic development.  The bill was passed out of the Commerce Committee and sent to The Finance Committee for study. Of course the fat lady remains in the wings but we surely hope that she will be allowed to sing her heart out.

If you have paid attention to the first installment of the State Historic Tax Credit series (gee, I hope so) you realize the incredible financial power of and the unique opportunity we have in Connecticut to encourage historic preservation.  If a building is deemed historic and is vacant and abandoned commercial structure the State Historic Preservation Office (SHPO) can award a tax credit for 25% of the construction cost to rehabilitate it.  The tax credit is redeemable to provide a financial resource for development.  Connecticut is one of a few states to offer a robust tax credit incentive.

Annually Connecticut has allocated $ 30 million in tax credits for commercial projects.  In highlighting the work of the Capital Region Development Authority, I highlighted projects in Hartford which could make financial sense with the addition of the tax credit resource.  In turn this has sparked a renaissance of the urban activity so sorely lacking in downtown.  SHPO reports that throughout the State 1,515 new units of housing have been created since the program’s inception, 797 of these are affordable.  Reuse of abandoned buildings brings an economic engine to help the cities in Connecticut through sales tax on construction materials, income tax revenue for wages paid to all associated with the project; architects, engineers, workers even the coffee vendors who sell items on the sites.  Last but by no means least is the real estate value increase realized by putting a vacant building back into productive use.  Value increases the tax base on which cities generate taxes to operate.  Further, if the vacant building next door suddenly comes to life the value of adjacent properties also improves.  It is not difficult to understand that historic tax credits, as a financial development component, are an incentive of real merit.

What could possibly go wrong with this key resource?  Popularity!  Since the tax credit program was launched interest in utilizing them has increase exponentially.  As developers and investors have grown to rely on the resource demand has grown to outstrip supply.  We work on a fiscal year as do most states which means our year runs from July to June.  SHPO has already announced that the pool of historic tax credits has already committed for the next fiscal year 2017-2018!  In doing its best to accommodate new projects they have made commitments for next year.  This is not able to be sustained and so rather than issue commitments the State has now begun to issue “reservations” which are not treated the same for purposes of assembling a project.  Basically, there is less certainty.  Uncertain of the financial structure of a project causes investors to hold back their commitments.

Since historic tax credits generate financial benefits for communities a logical response would be to call for a larger allocation of these.  As we know the State is struggling with its budget which has been made clear in cuts all of us have realized.  A tax credit means a reduction in revenue to fund the State’s operation.  A profound effort is to be made this Legislative Session to increase the credit allocation.  A benefit analysis is hard to develop because so many subtle components are involved. Take for example the increase of the municipal tax base driven by rehabilitation of vacant and abandoned buildings.  Studies do not exist to make the argument that greater not fewer tax credits are an economic engine.  There are many competing needs which need to be weighed to balance the State’s budget.  Although we in the field of historic preservation feel that the argument is financially practical it is hard to get the opportunity to make the case before our legislators.

What to do?  If urban community economic development is important to Hartford, then your voice needs to be heard by our delegation.  Recall that we have 5,300 deemed to be historic properties here.  Historic tax credits for redevelopment are critical.  We need your help in simply writing a note to your elected officials to voice your support for an increase of the State Historic Tax Credit allocation.  Find your legislator

Hartford, as most major cities in New England, spiraled into a deep real estate decline in the later 80’s.  Developers in anticipation of building commercial projects had purchased many historic buildings in downtown, torn them down and left major swaths of empty lots.  Our Main Street is testament to the destructive acts which tore apart the fabric of the City.  Still today much of this remains leaving surface parking lots where once stood 19^th and 20^th Century buildings of true architectural merit. The ghosts of buildings never-to-be-built haunts downtown development and stymies the recreation of a tax base on which to operate Hartford.

In its wisdom the Connecticut General Assembly created and capitalized the Central Region Development Authority in June 2012.  Established with the challenge to do the following:

• To stimulate new investment, provide for multicultural destinations and a vibrant multidimensional downtown
• Attract major sports, conventions and exhibitions
• Residential housing development
• Operate, maintain and market the Connecticut Convention Center
• Stimulate family-oriented tourism, art, culture, history, education and entertainment
• Manage designated facilities
• Stimulate economic development in the Capital region
• Development and redevelopment property within Hartford
• Facilitate the relocation of the area State office buildings

This charge has been skillfully managed by Michael Freimuth the CRDA Executive Director, acknowledged as a man of wisdom and vision who has made tremendous contributions to the revitalization of Hartford’s Downtown. He has brought financial resources to a strategic investment policy in projects which have made an impact on the Capitol City bringing new and vital development.  His challenge has been a big one be involved with housing, retail, cultural, tourism and to manage large facilities owned by the State.  For those of us in Hartford doing work to revitalize the city Mike’s presence is felt throughout.  CRDA has become one of the most helpful allies in recognizing that historic preservation contributes to community economic development.

Connecticut has a robust State Historic Tax Credit with both residential and commercial allocations.  These credits have provided a powerful financial tool to reuse and preserve buildings deemed to be historic.  Hartford has many such buildings with an interesting twist defining historic as those 50 years of age or older.  Many of the larger abandoned buildings are surprisingly defined as being historic; many have started their productive life as commercial office space.  Developers have realized that the buildings may be reused as residential properties.  The most striking high-profile development has been the reuse of 777 Main Street, formerly known as the Bank of America Building (originally built for Hartford National Bank), a tall, prominently located building on Main Street, State House Square.  However groundbreaking for Hartford 777 Main Street is only one of several projects to bring people into the City.  CRDA has participated in nine adaptive reuse projects of vacant and abandoned historic buildings.  In a city with a significant low-income population CRDA has been able to navigate successfully the desire to produce affordable housing units matched with an economic development strategy to attract market-rate units.  One excellent example of an adaptive reuse of an historic gem in downtown is the Judd & Root Building at 179 Allyn Street, whose renovation has revitalized a central district.  New tenants relocating to downtown or being attracted to living in Hartford now are creating a retail demand for goods and services, restaurants and entertainment venues.

After decades of decline Hartford is witnessing a true renaissance.  There is life on the streets once again.  Even though many historic buildings have been lost forever there is still sufficient fabric to attract community development.  The concept of adaptive reuse plays a significant role in bringing to life buildings which seemed to have lost their practical opportunities to contribute, and to pay taxes, once again in Hartford.

We were recently notified of a potential demolition of an historic house located on Capitol Avenue.  In following up we discovered that the owner of the property had purchased it as a preventive strategy to protect its substantial interests next door.  We sought a meeting to discuss opportunities and found that the owner was completely frustrated with trying to sell the property, for 5 years!  Seems that no one wanted to undertake a rehabilitation which would be expensive and ultimately cost more than the property would be worth.  Now long-abandoned and home to squatters the owner has grown concerned and wants to be rid of the costly headache.  One can be sympathetic, we know from great experience that often the cost to rejuvenate a property may exceed its investment.  However, we offered to explore how to become the white knight.  With experience in real estate development, finance, historic renovation technical assistance and a familiarity of market trends we determined to see what we could do.

Informing the owner that financial resources exist to mitigate the rehabilitation cost and our contribution of in-kind development and architectural services could make the project feasible for a moderate-income homeowner. Hartford needs community-based models of smaller properties to help spark more neighborhood revitalization step-by-step.  We proceeded to draw plans, assemble a development budget and make inquiries into resources to successfully model a preservation project of note.  ( I failed to mention that the boarded up property greets motorists who take the exit from I-84 to reach the Capitol and/or the State Armory.  Welcome to Hartford!)  A perfect teaching model of how to utilize the unique Homeowner Tax Credit Program offered by the State Historic Preservation Office would be presented to the public as we bring a house back to life.

So, the puzzle?  Although we have made good progress to assemble the project the property owner has gone silent.  Attempts to discuss how a purchase might be organized have met with a vague response.  Two of which have us scratching our heads: 1. We are anxious to have the project move forward more rapidly (remember the property has been owned for 5 years and in serious decline during that period) and 2. What happens, after renovation, regardless of it being owner-occupied, and roughly $400, 000 is spent on the project, that it falls into ruin once again?  Sadly without further information we are coming to the belief that the owner of the property simply wants to demolish the building.  As I often say “don’t confuse me with the facts, my mind is made up”.

At a time when the City of Hartford sorely needs community economic development and to have properties on the tax rolls.  The historic fabric of the City needs to encourage cost-effective models of rehabilitation and the State of Connecticut offers very robust financial incentives to accomplish the work.  We are both disappointed and honestly feeling as if the owner has not engaged with us in a good faith conversation.  Historic preservation matters in Hartford, economic development matter more so we only wish that or time and talent has not gone to waste.