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This Memorandum Is in Response to the Central Business Architectural Committee’S Request to Further Study the Feasibility of the Adaptive Reuse of the St

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This Memorandum Is in Response to the Central Business Architectural Committee’S Request to Further Study the Feasibility of the Adaptive Reuse of the St To: Matthew Welter, O’Connell Date: April 5, 2021 Development Group Project #: 42540.01 From: Quinn R. Stuart, Senior Preservation Re: Historic Rehabilitation Feasibility Study Planner, VHB St. John Cantius Church, 10 Hawley Street, Northampton, MA This memorandum is in response to the Central Business Architectural Committee’s request to further study the feasibility of the adaptive reuse of the St. John Cantius Church. The study includes the application of federal and Massachusetts historic tax credits to partially fund a rehabilitation project by comparing successful projects involving churches to the details of the St. John Cantius Church development. Federal Historic Preservation Investment Tax Credits Federal historic preservation investment tax credits are available for income-producing buildings which are listed in or are eligible for listing in the National Register (also referred to as “certified historic structures” in the historic tax credit program), and which are substantially rehabilitated according to the Secretary of the Interior’s Standards for Rehabilitation (Standards). Under this program, 20% of the total qualified rehabilitation expenditures (QREs) are returned to the owner in the form of a dollar-per-dollar credit on federal income taxes. The cost of a project must exceed the greater of $5,000 or the building’s adjusted basis, and after rehabilitation, the historic building must be used for an income-producing purpose for at least five years. A three-part Historic Preservation Certificate Application (HPCA), including project plans and photographs, is submitted to the MHC and NPS. The federal HPCA applications are accepted on a rolling basis. Part 1 presents information about the significance and appearance of the building, for the building to be determined a certified historic structure. Part 2 describes and documents the existing conditions of the building, including extant historic materials, and details the proposed scope of work. Part 3 is submitted after the construction is complete, documenting that the work was executed according to the approved Part 2 scope of work. An approved Part 3 certifies that the project meets the Standards and is a “certified rehabilitation.” The MHC has a review and comment role in the process, while the NPS has the final decision-making authority regarding certification of the completed rehabilitation. NPS tax credit review has purview over all proposed treatment to the exterior, interior, and the site, including landscaping, parking, additions to the historic building, and detached new construction buildings on the same property. Successful certification of the completed project, and obtaining the subsequent tax benefits, is dependent upon a rehabilitation scope of work that meets the Standards. One Federal Street Bldg. 103-3N \\vhb\gbl\proj\Springfield\42540.01 ODG Historical Preserv\tech\HTC Memo\VHB_10 Hawley_Historic Rehabiliation Springfield, MA 01105-1121 Memo_4.5.2021.docx P 413.747.7113 From: Quinn R. Stuart Ref: 42540.01 April 5, 2021 Page 2 Massachusetts Historic Rehabilitation Tax Credit Program The Massachusetts Historic Rehabilitation Tax Credit (MHRTC) largely mirrors the federal tax credit program. It is available on a competitive basis for income-producing buildings which are listed in the National and/or Massachusetts State Registers, and which are substantially rehabilitated. The three-part MHRTC application is similar to the three-part NPS application, with additional required supporting information. Like the federal tax credit, the rehabilitation, including the exterior, interior, and site, must be determined a certified rehabilitation, meaning the executed scope of work meets the Standards. There is no fee assessed by MHC for review of MHRTC applications. Under the Massachusetts tax credit program, up to 20% of the total qualified rehabilitation expenditures (QREs) is returned to the owner in the form of a dollar-per-dollar credit on state income taxes. The cost of rehabilitation must be no less than 25% of the assessed value of the property prior to rehabilitation. Currently, the program has an annual cap of $50 million in tax credits. Because requests typically far exceed the amount of credits available, the program is highly competitive in nature. Thus, most projects do not receive the full 20% state tax credit allocation; allocated credits typically reflect 12-15% of the total qualified rehabilitation expenditures. The MHRTC has three application rounds per year, with deadlines of January 15, April 30, and August 31. Projects generally do not receive an allocation in the first submission. Standard project awards each round are in increments of approximately $100,000 - $300,000, necessitating resubmissions in subsequent rounds. Renovation of Churches and Historic Tax Credits Although churches offer high architectural values, a large amount of square footage, and typically well-located properties, there are few successful historic tax credit applications. An article published in June 2019 by Novogradac in their Journal of Tax Credits reports that according to the NPS project database, that of more than 40,000 historic tax credit applications since the 1990s, only 0.7% involve churches, and of those only 0.2%, or 82 developments, were successfully executed. The primary factor listed of why there have been so few successful historic tax credit applications involving churches is due to the need to preserve the sanctuary space. Most applications that were denied included changing the floor plan, either by addition or demolition, which is rarely approved. The Novogradac article also states that “while subdividing these spaces may be critical to the economic viability of a project by adding leasable square footage, it is important to remember that the HTCs are an incentive and must meet the NPS standards regardless of economics.” VHB took an approach similar to Novogradac’s exercise and refined the number of NPS applications involving churches to just churches in Massachusetts. A search of the NPS project database resulted in eight applications for One Federal Street Bldg. 103-3N \\vhb\gbl\proj\Springfield\42540.01 ODG Historical Springfield, MA 01105-1121 Preserv\tech\HTC Memo\VHB_10 Hawley_Historic Rehabiliation Memo_4.5.2021.docx P 413.747.7113 From: Quinn R. Stuart Ref: 42540.01 April 5, 2021 Page 3 projects including historic churches or chapels.1 Of these, seven received approvals for the Part 1 applications, but only five projects submitted Part 2 applications; four received approvals for the Part 2 applications and one was denied. The five projects that submitted Part 2 applications to the National Park Service are outlined below. St. Anne’s Church and Rectory, 47 J Street, Turner Falls The St. Anne’s Church and Rectory project received a Part 1 approval in 2009 and a Part 2 conditional approval in 2010. According to an article published in 2009, in the Valley Advocate, the project proposed to convert the church sanctuary space into a combination music venue, pub and bistro, which would retain a portion, if not all, of the original full height volume of the sanctuary. The project does not appear in the MHC records as having received a Part 2 approval by the state. Unfortunately, the project as proposed to NPC and MHC was withdrawn in 2011 due to funding issues. St. Gabriel’s Church and Monastery, 159 Washington Street, Boston The St. Gabriel’s Church and Monastery project received a Part 1 approval from NPS and MHC; however, was denied a Part 2 approval from NPS due to the planned demolition of a secondary contributing structure on the property. Unable to resolve this issue, the project proceeded with only the MHRTC applications and received a Part 3 approval from Massachusetts in 2018. The final project included the rehabilitation of all but one historic building and construction of several new residential building. The original sanctuary in the church and the chapel in the monastery were converted into community spaces and retained their full height volume and many of their original ornamental details. Nobscot Union Chapel, 881 Edgell Road, Framingham The Nobscot Union Chapel is an active historic tax credit project with NPS and MHC Part 1 and Part 2 approvals (2020). The chapel was moved in the spring of 2020 to the southwest edge of the existing property to make space for mixed-use development. The project proposes to rehabilitate the small chapel for retail use, which allows for the full height of the sanctuary space to be retained. 1 The keyword search also included mosque, synagogue, mission, temple and parish as well as ancillary religious buildings including rectory, convent, shrine, monastery, and meetinghouse to ensure all possible churches or chapels were accounted for across the state. One Federal Street Bldg. 103-3N \\vhb\gbl\proj\Springfield\42540.01 ODG Historical Springfield, MA 01105-1121 Preserv\tech\HTC Memo\VHB_10 Hawley_Historic Rehabiliation Memo_4.5.2021.docx P 413.747.7113 From: Quinn R. Stuart Ref: 42540.01 April 5, 2021 Page 4 Mission Chapel, 205 Summer Street, Worcester The Mission Chapel is an active historic tax credit project that received NPS and MHC Part 1 and Part 2 approval in 2019. The project proposes to construct four one-bedroom units, two two-bedroom units, one large three-bedroom unit. The full volume of the main sanctuary will be retained by constructing two bedrooms and a bathroom below the balcony and having a loft bedroom in the balcony space itself for one 2,450 square-foot unit. St. John the Evangelist Mission Church, 35 Bowdoin Street, Boston The St. John the Evangelist Mission Church is an active historic tax credit project that received NPS and MHC Part 1 and Part 2 approvals in 2016. The project proposes to construct one apartment in the basement of the church and one in the attic. An open-concept office will occupy the sanctuary space and balcony levels of the church without any full- height partitions. The adjacent rectory is being renovated into three rental apartments but is not utilizing historic tax credits.
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