While researching historic neighborhoods in San Antonio, Donovan Rypkema wasn’t surprised that the demographics mirrored – for the most part – that of the greater population. What did surprise him was that San Antonio lags behind most cities of its size in terms of taking advantage of federal historic preservation tax credits.
Rypkema, a nationally known urbanist, gestures across West Commerce Street from the Municipal Plaza Building to make his second point. The c. 1938 Kress Building, a former dime store, at 201 W. Commerce Street, stands empty.
“Why isn’t that housing?” he asked. “On this block there’s gotta be eight buildings that in most cities of this size … somebody would have scarfed them up.”
Good question.
Rypkema, principal behind Washington D.C.-based real estate and economic consulting firm PlaceEconomics, gave a quick presentation to City Council during Wednesday’s B Session outlining the preliminary results of his City-commissioned study of the cultural, economic, and environmental role of historic preservation in San Antonio, and how historic districts compare and contrast with the rest of the city.
The study was initiated in early 2014 by the Office of Historic Preservation. His full report will be released in February and presented by Rypkema at Centro San Antonio’s Urban Renassiance Luncheon on Feb. 18 at the Wyndham San Antonio Riverwalk. Tickets are available for purchase here.
His comprehensive Powerpoint presentation to Council included each historic’s district’s racial makeup, income distribution, employment, density, proximity to social and cultural amenities, change in property values, foreclosure rates. At the end, he discussed the inherent benefits of historic districts and how they benefit an entire city, not just the people who live and work in the districts.
There were some attributes that strayed heavily from the city average. Density, for instance, is actually higher in historic districts, property values are (unsurprisingly) higher, and the foreclosure rate is much lower.
Sue Ann Pemberton, president of the San Antonio Conservation Society, attended the Wednesday meeting to gain insight into the neighborhoods the society serves.
“He dispelled the myths about how historic districts are for rich people, or only certain people live there,” Pemberton said. “(His research) helps to demystify some of the misconceptions about what it means to live in King William or Dignowity Hill. In King William, the low-income and upper income (residents) are almost equal (in number).”
“One of the strengths that Don (Rypkema) brings to the table is that he’s not a born-and-bred preservationist, he’s an economist,” she said. “He’s out there to save buildings or communities. He’s out there because of the economic sense … It’s a very pragmatic perspective to historic preservation.”
So what is the economic impact of historic preservation, anyway? Most of the answer lies in heritage tourism, defined by the National Trust as “traveling to experience the places and activities that authentically represent the stories and people of the past and present. It includes historic, cultural and natural resources.” His research showed that heritage tourists on average spend more money while traveling than non-heritage visitors.
Total expenditures per year are in the billions. These numbers make a strong case for historic preservation to attract visitors, but locals benefit from vibrant, cultural neighborhoods as well as they often provide jobs, entertainment, and “staycation” opportunities.
Many features and side effects of historic districts are in line with SA2020 goals. Residents in historic districts are typically walkable, bike-friendly neighborhoods closer to parks, bus stops, public schools, libraries, and universities.
Rypkema’s research shows about 51,000 San Antonian jobs a year are supported by the local heritage tourism industry representing more than $1.7 billion of income directly and indirectly from lodging, transportation, food and beverage, retail, and recreation.
Construction work in historic districts provides more than 1,850 jobs a year, he said, with derived income of more than $100 million.
Despite all this, San Antonio is lacking a development community that renovates/converts historic buildings and takes advantage of federal tax credits.
Rypkema’s report didn’t dive into the “why” for this missed opportunity, but after Wednesday’s meeting, he posed a possible explanation.
“I think there is an issue when the downtown economy is so tourism-based that drives up land prices and so the only thing that makes sense is a hotel. So I think that’s probably part of the issue – but this is a big place,” he said. “That can’t be effecting every parcel all around (the central city).”
What San Antonio needs, he added, are a few architects, developers, and general contractors to take up that historic preservation niche. Some would say there already are many such players in the mix, and that more attractive incentives will be necessary to prime the pump. That issue might be explored more deeply when Rypkema appears at the Centro SA luncheon.
“There is some great work being done here that certainly is historic preservation that hasn’t used the tax credit .. that’s not a failure, but I just hate to see money left on the table,” he said.
One possible explanation for that is relatively little industry experience with the tax credit, coupled with the fairly recent development of infill development policies and incentives, said Office of Historic Preservation Director Shanon Miller. “There are horror stories that get circulated around (about dealing with tax credits), so many (developers) shy away.”
The Texas Historic Preservation Tax Credit Program went into effect on Jan. 1, so it’s likely that more developers will take a closer look at federal incentives, too.
“With the addition of the state (incentives), it’s going to be much harder to walk away from a 40% discount,” Miller said. “We’ll start to see more use of both of the credits.”
*Featured/top image: 201 E. Commerce St. gets a make-over for a Center City Development Office Open House. Window and interior art and displays by artists Rex Hausmann and David Almaguer of Hausmann Millworks. Photo by Iris Dimmick.
Related Stories:
City Offers Workshop on Texas Historic Preservation Tax Credit
Redefining Preservation in a City on the Rise
Centro San Antonio Explores Preservation, Windows To Our Future
Artists and Developers Eye Historic Buildings, Imagine Possibilities
Progress versus Protest: The Path to Smart Preservation and Development
The state tax credit is work 25% of rehab expenses and the federal are worth 20%. We’re already seeing an increase in the number of rehab projects taking advantage of the new incentive. Glad to see local groups promoting the use of the credits.
We had many firms that did just that in the late 70’s and early 80’s. The federal tax credit of 25% was still there in 1985 when we started the Chandler Building and that was the draw for our client. We still took advantage of the federal tax credit 8 years later, although only at 20% on two late 1800’s buildings on S. Flores. The paperwork is extensive, but it’s not impossible. What’s impossible is owners and developers who have ZERO interest in considering preservation first. We used to have many of those that considered it first and in fact were passionate about it. Where did they go? Hap died. Bill Atwell died. We’ve got to find owners who have that same kind of vision and aesthetic. It seems tragic after all those 33-something major preservation projects that we did to see so much potential preservation go south from the concept phase. The Toudouze project is one of those from everything I’ve seen. Why go there? When we have so very many accomplished preservation architects and contractors?
What makes it so easy in the process to go so far in directions preservationists are going to feel compelled to fight? It’s a very interesting place for us to be. Full well knowing the draw our charming historic districts and our historic architecture hold. Why again isn’t the OHP under the Planning Department? Or independent of the City Manager’s office? Can someone relate the difference in how that department functioned before it was moved from its logical place in Planning?? What’s the record? Has this had an effect on the track record of preservation projects since? Has that mattered? And if so, how? What are the politics of architecture at play? Who has the stones to write about that? For a while there was a petition drive up asking for the OHP to be returned to Planning. Can someone explain why that’s good or bad and how that decision relates to Rypkema’s report?
I’m very glad this study was commissioned. It will be fascinating to see how it’s received and pursued.
Interesting article. OHP and SACS need to do a better job of educating the public about the tax credit programs especially as they apply to owner occupied properties. Much of the emphasis of these historic tax credits revolve around income producing properties.
This is what I’ve been saying all this time. “Why aren’t these empty buildings housing!”