Historic Downtowns – a short guide to Historic Building Preservation Funding

One of our favorite discoveries while visiting smaller towns, has been to seek out and spend time in their oldest and most historic areas – which generally include the town’s original “Main Street” of businesses. Sometimes the highway passes through an historic business district, but often (and this is our personal preference from a walkability perspective) one must make a more deliberate effort to seek these streets out. Sometimes these areas include mostly older historic buildings and sometimes a mix of architecture added through the decades.

Historic Architecture in the US West

The architecture of its buildings can give clues to the origin story of the town. In the US West, there is a historic style called Western False Fronts, which you can still see evidence of today. The more ornate historic buildings can indicate a vibrant economy in their early days, like those with mining and agriculture origins. County Seat towns will also often have more ornate buildings. Another interesting aspect to older historic Main Street buildings is their footprint shape – which is often narrow facing the street but very deep. This gives them a distinctive long and narrow appearance from a Google satellite image on a map, which is how we often identify these historic Main streets when we plan a visit.

Restoring an old historic downtown building can be a challenging and costly endeavor! It is not a town’s local tax base, nor often is it local building/property owners (with exceptions, of course!) that can take on this type of heavy lift expense. And yet preserving local downtown historic buildings from inevitable decay brings a variety of significant benefits to a Small Town community.

After some research, i learned that there are several ways in which historic building restoration projects can be funded. The availability and feasibility of these funding sources will vary depending on the location, the building’s historical significance, local regulations, and the project’s scope.

More about the National Register of Historic Places and Local Historic Districts

Historical significance is increased once a building is listed on the National Register of Historic Places. Of the more than one and a half million properties on the National Register, 95,000 are listed individually. The remainder are contributing resources within historic districts. A State or Local historic districts are designated as such at a local level.

Examples and more information:

• Colorado (certified) Historic Districts
• Colorado Types of Historic Designations
• Colorado State Register of Historic Properties

It is worth noting that preservation co-funding partnerships may be contingent on going through the process of a local, state or national historic registry certification.

Below are 10 common ways historic downtown building restoration can be funded.

1. Grants and Incentive Programs:

Many governments at the federal, state, and local levels offer grants and financial incentives specifically targeted at historic preservation. This includes programs like the U.S. Historic Tax Credit and various state-level historic preservation tax credit programs. These grants and tax credits can significantly offset the costs of restoration. Note that grants generally have an expectation for the grantee to have some level of co-funding.

Example: Colorado State History Fund

History Colorado’s State Historical Fund (SHF) fosters heritage preservation through tangible and highly visible projects for direct and demonstrable public benefit. A 1990 constitutional amendment legalizing gambling in Black Hawk, Central City, and Cripple Creek created the State Historical Fund. The amendment mandates that a portion of gaming tax revenue goes to the State Historical Fund to fund historic preservation projects throughout Colorado. The Limited Gaming Act of 1991 (CRS 44-30-1201), authorizes History Colorado to administer the State Historical Fund as a statewide grants program.

As of 2022, a total of 5,472 grants have been awarded, contributing $355,798,785, in all 64 Colorado counties.

Note: This Colorado fund is a particularly interesting example! No matter one’s thoughts on gambling tourism as an economic driver, one must appreciate the substantial funding benefits that have been used to restore historic buildings across the state of Colorado! See my Small Town article on Cripple Creek.

2. Historic Preservation Funds:

Some communities have established local historic preservation funds or foundations that provide grants or low-interest loans for restoring historic properties within the area. These funds are often supported by public and private contributions.

Example: Main Street America Program

Nationally recognized. Locally Powered ^TM

Main Street was established as a program of the National Trust for Historic Preservation in 1980 as a way to address the myriad issues facing older and historic downtowns during that time. Working with a nationwide network of coordinating programs and local communities, Main Street has helped over 2,000 communities across the country bring economic vitality back downtown, while celebrating their historic character, and bringing communities together.

An exciting new chapter for the organization began on July 1, 2013, when the Main Street program launched as an independent subsidiary of the National Trust for Historic Preservation.

About Us – Main Street America

Example: Colorado Main Street Program

The Colorado Main Street Program offers support for community-led downtown revitalization. We help communities thrive by providing a customizable framework to focus efforts, energy, and resources.

Colorado Main Street is a Main Street America™ Coordinating Program. As a Main Street America™ Coordinating Program, Colorado Main Street helps to lead a powerful, grassroots network of over 40 Coordinating Programs and over 1,200 neighborhoods and communities across the country committed to creating high-quality places and to building stronger communities through preservation-based economic development.

 Note: Main Street Communities in Colorado Small Towns (population <10K*) Include: Brush, Central City, Elizabeth, Granby, Hugo, La Junta, Lake City, Lamar, Leadville, Lyons, Meeker, Ouray, Pagosa Springs, Ranagely, Rifle, San Luis, Silverton, Steamboat Springs, Trinidad, Victor

Main Street Program | Division of Local Government (colorado.gov)

3. Community and Non-Profit Organizations:

Non-profit organizations, historical societies, and community foundations may be willing to provide financial support or help in fundraising efforts for the restoration of important historic buildings.

Community foundations are a public charity that typically focuses on supporting a geographical area by pooling donations into a coordinated investment and grant making facility dedicated primarily to the social improvement of a given place. Support and funding are provided by the public (i.e. various individuals, families, businesses and organizations) rather than a like a private foundation which usually has a single funding source.

You can find a Community Foundation in your area with a google search. Example: Cause IQ’s directory of location=Colorado + Community Foundations

4. Private Foundation grants:

Some private foundations focus on historic preservation and may offer grants or funding for projects that align with their preservation goals.

Example: Colorado branch of Gates Family Foundation – offers some place-based grants

5. Public-Private Partnerships:

Collaboration between the public and private sectors can be an effective way to secure funding. Local governments may partner with private investors or developers to fund the restoration of historic buildings while ensuring they are put to economically viable uses.

Example: Montrose, CO Potato growers building – December 2021 article in the Montrose Press, demonstrating a public-private partnership in historical designation and subsequent funding

6. Tax Increment Financing (TIF) Funding:

TIF is a public financing tool that earmarks future increases in property taxes generated by a development project within a designated district to finance the project itself. Historic building restoration projects may be eligible for TIF funding.

7. Crowdfunding and Community Campaigns for funding:

Online crowdfunding platforms and community-driven fundraising campaigns can be used to rally public support and raise funds for the restoration of historic buildings.

8. Historic Easements and Preservation Agreements:

In some cases, property owners may choose to protect their historic building’s character by donating or selling historic easements to preservation organizations. This provides a financial benefit and can limit future alterations that might compromise the building’s historical integrity.

9. Developer Tax Credits and Incentives:

Local governments may offer tax incentives or credits to developers who undertake restoration projects that preserve historical buildings.

10. Tourism and Cultural Grants:

In areas with significant tourism potential, local tourism boards or cultural agencies might offer grants or sponsorships to support the restoration of historically significant buildings that can attract visitors.

In Conclusion

It’s essential for property owners and preservation advocates to research and explore all available funding options, as well as to consult with historic preservation experts, local government officials, and relevant organizations. Additionally, complying with any regulatory requirements and meeting the necessary criteria for funding programs is crucial to secure financial support for historic downtown building restoration.