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Historic Preservation and the Georgia Economy

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Historic Preservation and the Georgia Economy Good News iN TouGh Times Historic Preservation and tHe GeorGia economy Prepared for: Historic Preservation Division Georgia Department of Natural Resources Prepared by: PlaceEconomics, Washington, DC, September, 2010 Design and layout by Georgia Department of Economic Development Table of coNTeNTs Introduction 2 Historic Preservation is Spurring Investment 4 Historic Preservation is Attracting Visitors 7 Georgia Parks 9 National Parks 10 Historic Preservation is Revitalizing Downtowns 11 Historic Preservation is Effectively Leveraging Scarce Resources 16 A Tale of Four Cities 20 Macon 20 Savannah 22 Decatur 24 Madison 26 Making It All Happen 28 Conclusion 29 Sources 30 Acknowledgements 32 iNTRoducTioN The first decade of the 21st Century • Businesses in those downtowns has been a challenging one for the have added 23,000 net new jobs. national economy. Two recessions, • Historic preservation has effectively the second being the longest and leveraged scarce local dollars the deepest since the Great Depres- through the effective use of federal sion of the 1930s, have meant loss of programs for transportation, local jobs, loss of incomes, and loss of tax government, and heritage tourism. revenues. • Every year the heritage portion of Georgia’s tourism industry sustains Georgia has not been immune to these 117,000 jobs, generating nearly economic difficulties. Among the indica- $204,000,000 in wages, and tors of these economic challenges are: $210,000,000 in local tax revenues. • Rapid decline in housing prices • The non-profit sector, from the • High levels of unemployment Georgia Cities Foundation to the • Declining state government Garden Club of Georgia, Inc., to the revenues Fox Theatre, have seen the wis- dom of investing their resources in But beneath these bad news head- historic preservation. lines, a different story emerges. Historic preservation in Georgia has This report is about an often over- been adding jobs, increasing property looked story – the positive impact values, spurring investment, and gen- that historic preservation has on the erating income. Georgia economy in every corner of the state. During the last decade • Over 10,000 jobsi have been cre- Today historic preservation in Georgia is: ated through the rehabilitation of • Spurring investment historic structures. • Attracting visitors • Those jobs have meant $420 • Revitalizing downtowns million in household income for • Effectively leveraging scarce Georgia citizens. resources • 5,100 net new businesses have opened their doors in Georgia in short – historic Preservation Main Street and Better Hometown is Good News in Tough Times. downtowns. i Jobs calculations for historic rehabilitation are based on multiplier data provided by IMPLAN©. Jobs include direct construction jobs and also indirect and induced jobs. In Georgia for this type of activity for every 10 jobs directly created in a historic rehabilitation project another approximately 5.9 jobs are created elsewhere in the state’s economy. 2 AtlaATLANTNTaA mMEeTRTRO HOUSo housiING INDENGX mediaN PRice $190 $170 $150 $130 $110 $90 $70 $50 2007 2008 2009 2010 Source – National Association of Realtors GEGeoORGIARG JANUAia JaRY UNNuaEMPLOYRy uNMENTem RAPTEloymeNT RaTe 12% 10% 8% 6% 4% 2% 0% 2000 2002 2004 2006 2008 2010 Source – U.S. Department of Labor STATE REVENUE COLLECTIONS StaTe ReveNue collecTioNs $19B $18B $17B $16B $15B $14B $13B $12B $11B $10B 2000 2002 2004 2006 2008 2010 Source – Georgia Department of Revenue 3 hisToRic PReseRvaTioN is sPuRRiNG iNvesTmeNT The rehabilitation of Georgia’s historic Over the last decade more than 700 of buildings isn’t just about preserving Georgia’s historic buildings have been yesterday’s history; it is about build- rehabilitated using one or more of ing Georgia jobs, Georgia incomes, these programs. These programs have and the Georgia economy today and been remarkably successful in saving tomorrow. Public officials at both the Georgia’s heritage, but extraordinary in national and state levels have recog- boosting the Georgia economy. nized this, and have enacted legis- lation to encourage private sector Since 2000, individual property own- investment in historic buildings. ers in the private sector in Georgia have invested $560,000,000 in their For owners of Georgia’s historic build- historic buildings. This investment ings, three programs, administered by prepared their 18th, 19th, and 20th the Historic Preservation Division of century buildings to respond to the the Department of Natural Resources, demands of the 21st century. At the are potentially available – the Federal same time that private investment has Rehabilitation Investment Tax Credit, been a boon to the Georgia economy. the Georgia State Income Tax Credit for Rehabilitated Historic Property That investment in Georgia’s history and the Georgia Preferential Property has meant: Tax Assessment for Rehabilitated • 10,168 jobs for Georgia workers Historic Property. • $420,046,800 in income for Georgia w orkers and proprietors We’d be dead in tHe Water WitHout tHese tax credits. Josh Rogers, Historic Macon Foundation 4 PRoGRam iNceNTive Federal Rehabilitation 20% credit* for eligible income-producing, Investment Tax Credit commercial properties Georgia State Income Tax 2004-2008 Credit for Rehabilitated • 10% credit: residential Historic Properties • 15% credit: low-income “target” area • 20% credit: commercial • All projects subject to $5,000 cap 2008-current • 25% credit: residential & commercial • 30% credit: low-income “target” area • $100,000: residential property cap • $300,000: income-producing property cap Georgia Preferential Property tax assessment freeze for over Property Tax Assessment 8 years for commercial and residential Program for Rehabilitated properties Historic Property * of qualified rehabilitation expenditures In Georgia, $1,000,000 iN outpuT fRom vaRious Industries “meaNs” iNdusTRy Jobs SalaRy & waGes Automobile Manufacturing 3.5 $245,000 Computer Manufacturing 4.0 $255,000 Air Transportation 8.7 $476,000 Poultry Processing 10.4 $426,000 New Construction 14.9 $616,000 Rehabilitating Historic 18.1 $750,000 Buildings Source – IMPLAN© data for Georgia 5 The Augusta Canal National Heritage Area’s guided tour boat passes the site of the Confederate Powder Works. The chimney is the last vestige of the Confederacy’s huge gunpowder “manufactory.” hisToRic PReseRvaTioN is AttracTiNG visiToRs Tourism is Georgia’s second largest • While Georgia is ranked as the 8th industry following only agriculture in most visited of all states, it ranks economic importance. Tourism em- 5th for heritage tourists. ploys 241,000 Georgians, nearly 6% of • What do visitors do in Georgia? the state’s workforce. In recent years After general sightseeing, visiting tourism has accounted for more than historic areas is their primary inter- $20 billion per year spent within the est. state’s borders. From an economic • Why do visitors extend their stay? development standpoint, more than Visiting historic areas is a primary 75% of that amount comes from reason. beyond the state’s borders – from • What about those international travelers from other U.S. states, and visitors? from international visitors. The ulti- • Georgia’s international mate economicTOURISM impact IN GEOR ofGIA tourism in visitation is growing. Georgia is nearly $34 billion. • A third of international visitors are cultural tourists, 73% of whom visit a historic site. • International cultural visitors stay on average 8 days longer and spend $220 more than $4,826,000 other international tourists. • After shopping, dining, and sightseeing in cities, visiting $1,800,000 a historic site is the most $14,174,000 common activity for the international cultural tourist. • Four times as many interna- tional tourists visit a historic site than play golf. There’s a good reason for Georgia’s In -State International Out of State appeal. Its unique mix of sites, includ- ing Civil War battlefields, African- American history sites, Native Ameri- Of course, not all tourism is heritage can spiritual sites, house museums, related. Business conferences, sports plantations, historic downtowns and activities, recreational areas, and railroad depots, all draw heritage amusement parks all bring visitors to tourists. How do these attractions Georgia and attract tourism dollars. translate into jobs and paychecks for There are, however, a number of Georgia citizens? indicators of the significance of the heritage component of Georgia’s tourism industry: 7 cultural and HeritaGe travelers are more interested in exPeriences WHere tHe destination, its buildinGs and surroundinGs Have retained tHeir Historical cHaracter. The Cultural & Heritage Traveler Study, McCormick, Rosemary. Shop America Alliance (2010) As those who understand economic Using a variety of data sources includ- development or tourism know, quan- ing the Georgia Tourism Division’s tifying precise economic impact from data, private sector tourism surveys, tourism is a challenge and, frankly, and U.S. Department of Commerce often overstated. Some surveys have figures, a conservative estimate of the indicated that as many as 78% of all annual impact of the heritage portion leisure visitors can be classified as of the Georgia tourism industry is: cultural/heritage tourists. Spending in Georgia - $6,147,282,000 But we have calculated the impact of Domestic $5,633,180,000 heritage tourism using a very conser- International $514,102,000 vative approach. Jobs in Georgia – 117,000 Salaries and Wages • We include only
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