Oldies but goodies | A historic district along Portland's Congress Street may bode well for the city's future
If you’ve been fortunate enough to spend time in Charleston, South Carolina, you are surely familiar with King Street. King Street is part of a charming and lively neighborhood with narrow cobblestone side streets. The scent and sounds of the nearby working oceanfront are everywhere and there is an eclectic mix of local and national retailers and restaurants. You can’t miss the unmistakable flock of tourists clamoring to spend their vacation dollars.
The correlation to our beloved Old Port in downtown Portland goes deeper than surface similarities. Like the Old Port, King Street was once a tired area with dilapidated buildings and infrastructure. There were significant retail, office and residential vacancies and crime rates soared. Over the years, however, both areas were rehabilitated and many experts credit the implementation of historical district overlay zones for these improvements.
Portland and Charleston are two of more than 2,300 towns and cities throughout the country that have adopted historic districts. Proponents of these zones say the ordinances force property owners to invest in their buildings, which, in turn, increases property values and makes the area more inviting. But critics counter that these zones impede ownership rights and add red tape to what can already be a dauntingly bureaucratic development process.
This debate was recently rekindled in Portland. The city is going through the final stages of creating a historic district along 73 acres of Congress Street. The Congress Street historic district will stretch between Lincoln Park (adjacent to Franklin Arterial) and Bramhall Square (just northeast of Maine Medical Center). All told, 130 buildings will be affected by the historic district designation.
There are many historic district success stories, such as the Old Port and King Street, and supporters say Congress Street needs the same type of rejuvenation. According to the Historic Preservation Board and the Portland Planning Board’s official recommendation to the City Council, “designating Congress Street and its immediate environs as a historic district will not only ensure the preservation and enhancement of valuable historic resources within the downtown now and into the future, but also encourage quality new development and economic vitality.”
The lure of history
Still, opponents hark back to the additional costs involved in meeting historic district requirements, as well as the subjective nature of the approval process. I spoke recently with a prominent local project manager and she voiced concerns about the designation impeding basic property improvements. Often, when landlords are negotiating with tenants on leased space, certain changes are needed. But in a historic district, any exterior change would need approval. This means that if a tenant requests exterior signage, or a new awning, or even a new window, the landlord will need to go through additional channels to make it happen. The delay may force the tenant to consider non-historic buildings. It brings to mind the classic business concern that “time kills deals.”
But, despite the objections, the Congress Street historic district seems imminent. It has been approved by the city planning board and the city council. The Maine Historic Preservation Commission at press time was reviewing the final application before submitting it to the National Park Service. The whole process should take less than 60 days and city officials don’t anticipate any problems obtaining certification.
So what exactly does the historic district overlay zone mean for property owners, tenants and area businesses? One of the major benefits of being in a historic district is that your property is automatically eligible for state and federal tax credits. For eligible properties and rehabilitation projects, the federal credit is 20% and has been available since 1976. The state tax credit for historic properties, however, was drastically changed in 2008 by Gov. John Baldacci. There are now higher credit caps, a credit for smaller projects ($50,000-$250,000) and a credit designed for affordable housing rehabilitation projects. Visit the Maine Historic Preservation Commission’s website at www.state.me.us/mhpc for more.
Another less quantifiable benefit is the prestige a building acquires when deemed a historic property. Savvy landlords should take advantage of this accreditation and market their building to progressive tenants who seek prominent addresses. In this difficult leasing market, anything a landlord can do to distinguish his buildings from a competing property is a good idea. For example, the Eastland Park Hotel has championed this ordinance to attract guests to the historic property.
No one is suggesting the Congress Street historic district will change things overnight. Rather, the district is meant as a long-term, evolving development tool. But, as we have seen on the bustling sidewalks of King Street in Charleston and in our own Old Port, commercial properties can and do thrive in these zones.
Justin Lamontagne, associate broker at CB Richard Ellis/The Boulos Co. in Portland, can be reached at jlamontagne@boulos.com. Read Justin’s column at www.mainebiz.biz.
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