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.
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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
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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.
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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.
Adaptive Reuse of Historic Churches without Historic Tax Credits
VHB also identified several churches across the state that were rehabilitated not utilizing historic tax credits. These appear to be both income-producing and non-income producing residential and commercial properties. By not applying for tax credits, the proposed project plans were only restricted by any local architectural or preservation review board and are not reviewed by MHC or NPS. Although many of the projects carefully and thoughtfully retained a high percentage of the historic architectural features, not all treatments adhered to the Secretary of the Interior Standards, primarily concerning the division of the plan.
The following is a list of some of the non-historic tax credit church renovations in Massachusetts, including those completed by western Massachusetts developer David Carver. VHB also utilized records from the Boston Preservation Alliance, Cambridge Historical Commission, Boston Landmarks Commission, Worcester Historical Commission, and local newspapers to identify a variety of church rehabilitation projects throughout the state.
Church Corner Apartments, former St. Raphael’s Catholic Church, Williamstown: Converted the church and rectory into eight rental apartments by dividing the interior of the space. The project utilized private and town funds. 625 State Road, former Our Lady of Mercy Church, North Adams: Converted the church into four high-end apartments built into the balcony and sanctuary space.
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Morning Star Apartments, former St. Mary the Morningstar Church Complex, Pittsfield: This church complex comprises 29 market-rate apartments constructed throughout the school, rectory, convent, and church including within the sanctuary space. Powerhouse Lofts, former Holy Family Church, Pittsfield: Converted church into ten market-rate apartments by dividing the sanctuary into two floors with a single-loaded corridor around the perimeter. The Residences at St. Augustine, Boston: Converted the church and rectory into 29 luxury condominiums with approximately 33,000 square feet of new living area and additional surface and below-grade parking at the site. 80 Prospect Street Condominiums, former Gloucester Methodist Church, Gloucester: Converted into condominiums by dividing the space into four levels. St. Mary’s Condominiums, former St. Mary’s Roman Catholic Church, Marlborough: Converted the school, rectory, church and constructed a new townhouse building to create 36 rental units across the property.
St. John Cantius Church and Historic Tax Credits
A project involving a unique structure, such as a church, would most likely result in at least three rounds of applications; the initial round and at least two additional rounds responding to MHC comments on the proposed treatment. There are three application rounds per year, so it would take at least one year to receive the initial MHC approval and receive the first allocation of credits, which as stated above are approximately $100,000 - $300,000. The proponent would therefore resubmit an application for additional allocations three times a year until either the project is completed, or MHC has capped the credits for that project. Many projects begin applying for credits two years or more before construction even begins to ensure they are able to accumulate the maximum credits available. Reapplications for the credits can continue through the construction phase but must cease when the project files for its Part 3 Certificate, which is necessary to claim the credits.
For example, if the QREs for the rehabilitation of the St. John Cantius Church was approximately $10 million,2 that would make the 20% in eligible federal historic tax credits about $2 million. However, because the Massachusetts historic tax credit typically allocates, on average, 12-15% of the QREs that amounts to only $1.2 to $1.5 million. As mentioned above, it could take approximately one year to receive the first allocation from MHC and the project may only receive $300,00. If the proponent continues to receive the maximum in average allocations, the project could
2 This figure does not reflect any actual costs estimated by the project proponent and only being used as the example.
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receive up to $900,000 in year two and the remaining $200,000 in year three. However, MHC also “steps down” the allocation amounts, therefore, the totals may be spread out in smaller allocations. Based on this example, the project would take at least two and one-half-years of applications to MHC to receive Massachusetts historic tax credit allocations.
The Secretary of the Interior’s (SOI) Standards for Rehabilitation is the criteria used to determine if a rehabilitation project qualifies as a certified rehabilitation. The SOI standards call for the “preservation of exterior and interior portions and features of the building that are significant to its historic, architectural and cultural values.” The SOI offers guidance on identifying and evaluating these significant components, or “character-defining features”. Exterior features could include the general categories of shape, openings, roofs, projections, materials, and setting. On the interior, the significant features may include the building’s plan, spaces, individual architectural features, and the various finishes and materials. 3
For churches, the primary challenge in a development project is the need to preserve the sanctuary space. A sanctuary, comprised of the narthex, nave, crossing and apse, and any associated balcony are fundamental and character- defining features. In addition, the significance of the sanctuary is not tied to its finishes. The presence or absence of high-end finishes does not eliminate the importance of the volume of the space.
St. John Cantius Church is identified in the Pomeroy Terrace National Register Historic District nomination as a late- Italian basilica with exterior character-defining features of the bell tower, center entrance with vaulted portico, centered rose window, and limestone pendants and trim. 4 Interior features of the church, which are not identified in the National Register nomination, are the large, two-story open sanctuary, the painted barrel-vaulted ceiling, wall panels, and dome above the alter, the wood panel wainscoting, and a few of the stained-glass windows that remain.5 These features are modest in comparison to large cathedrals; however, they are still beautifully executed and those that remain retain a high level of integrity.
3 Refer to Secretary of the Interior’s Preservation Brief 17: Architectural Character: Identifying the Visual Aspects of Historic Buildings as an Aid to Preserving Their Character and Preservation Brief 18: Rehabilitation Interiors in Historic Buildings, which are available online at, https://www.nps.gov/tps/how-to-preserve/briefs.htm 4 These exterior character defining features are described in the Pomeroy Terrance Historic District National Register nomination (2001). Interior features are not taken into consideration on the eligibility of contributing properties in the listing for a historic district; however, the interior features are reviewed for historic tax credit purposes for both individually listed historic properties or those listed as contributing properties to a historic district. 5 When a church is closed and sold, the Catholic Church removes the consecration of the church and all sacred items, including the tabernacle, altar, as well as relics and stained-glass windows with particular religious significance are removed.
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The sanctuary at St. John Cantius Church is one of the major character-defining features of the church. Retaining only the architectural finishes and details of the interior space would not meet the Secretary of the Interior’s Standards required for historic tax credit projects. Based on VHB’s extensive experience in assisting developers through the federal and Massachusetts tax credit process, we believe that unless an income-producing reuse could be identified that would retain the overall massing of the sanctuary space, St. John Cantius Church would not be a candidate for a historic tax credit rehabilitation.
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