This article was originally published on Common Edge.
"For more than a generation, federally funded historic tax credits (HTCs) have been instrumental in incentivizing developers to revive and reuse historic buildings and keep them economically viable, rather than replace them with shiny new objects. These credits create jobs, promote responsible development, and leverage billions in private investment to enable income-generating buildings". Read the interview between Justin R. Wolf and Meghan Elliott, founding principal of New History, a firm specializing in adaptive reuse.
To further bridge the gap between available financing and actual project costs, 39 states have implemented their own programs, which, when combined with federal HTCs, can result in up to a 40% tax credit for developers to rehabilitate properties listed on the National Register of Historic Places.
Meghan Elliott is the founding principal of New History, in Minneapolis, a firm that to the passing eye looks like a small shop specializing in adaptive reuse, but beneath the surface is much more. Elliott has also been fighting the good fight this past year, advocating to extend Minnesota’s own HTC program, which despite its resounding success, became a bargaining chip during 11th-hour budget negotiations last month in St. Paul. I sat down with Elliott to discuss her advocacy work, the firm’s unique business model, and her take on the meaning of historic preservation.
JRW (Justin R. Wolf): What prompted you to start New History? Was it a building that was lying dormant, or something that you felt wasn’t being capitalized on?
ME (Meghan Elliott): I believe strongly in building reuse. I went to high school in Santa Cruz, California, where the 1989 Loma Prieta earthquake was epicentered. Most of downtown was lost. There was no power or water for days. That was the point when I realized how much we navigate by the places and buildings around us. When that’s gone, we physically lose our way, but we also lose our way as a community. That was a big shift in my life, realizing that keeping as much of our built environment intact was important for understanding who we are and knowing how to move forward.
I started my career in earthquake engineering, performing seismic retrofits and adaptive reuse of historic buildings in the Bay Area. When I moved here, no one told me that Minnesotans don’t believe in earthquakes. Literally, the building code in Minnesota has deleted the words “earthquake” and “seismic.” We don’t design for earthquakes at all in this state. That means that someone like me suddenly had no value as an employee, so I started my own company.
JRW: So the path from earthquake engineer to leading historic redevelopment projects is not as linear as some may think. The founding of your firm in 2010 coincided with the establishment of the Minnesota Historic Tax Credit program. Was that by design?
ME: Honestly, it was just a happy coincidence. I would’ve started this company no matter what and then figured out how to fit it within the legislative and economic constraints around me. But yes, it was certainly helpful that the Minnesota Historic Tax Credit program happened when it did. Prior to the program’s passing, the average number of historic redevelopment projects in the state on an annual basis was one or two. Now it’s 10 to 12 per year. That represents a huge jump in the amount of interest people have in these projects.
JRW: New History has been a vocal advocate in the fight to extend the state’s program. Most recently, the credits were extended for one year, which feels like the legislature kicking the can. But data show that the program has paid for itself several times over, so where’s the hesitation to extend it indefinitely?
ME: One year is not enough. The question of why we have historic tax credits and why we have historic preservation as a regulatory instrument is constantly evolving. The first inception of historic tax credits came out of the 1970s, as a reaction to people leaving cities. The credits were a government tool in this effort to incentivize people to stay. Then in ’86, the Federal Historic Preservation Tax Credits were passed, and the program has substantially remained the same ever since.
The impact of the federal program is remarkable, and many states have added their own programs because the impact is measurable. Minnesota’s program went into effect in 2011 as a five-year program, and that was later extended again for another five years through 2021. For each of those years, the state is required to do an economic impact report on the program. At the end of the day, in the last 10 years, we’ve seen approximately 18,000 jobs created and 130 projects approved or completed, with $10 in economic development for every $1 of tax credit. The data is clear. So, why did we only end up with a one-year extension?
When our state legislators were looking at the budget, they saw the credits as a cost. I consider it an investment: For every dollar of tax credit, 10 dollars is generated. Why wouldn’t you want that program?! Our legislators looked at it and said: one dollar in tax credit is a dollar in tax income we’re not getting. We had argued for an indefinite program, or we were hoping for, at least, a generation’s worth: 8, 10, 15 years. We ended up with one year. And it wasn’t strictly an across-the-aisle thing, there were detractors on both sides, on the Republican side and the DFL [Democratic-Farmer Labor party] side. Historically, we’ve always had bipartisan support for the program. It’s one of those few issues that had it. We just had a hard year with our legislature.
JRW: It was one of those line items that was pushed to the very end, even past the deadline to pass the state’s budget.
ME: It was. Everyone advocating for the credits was optimistic that we’d be able to get at least an eight-year extension, which is what the House bill proposed. So, when the Senate proposed only a one-year extension with a $14 million cap, everyone’s jaws hit the floor. At that point we shifted gears and focused on just getting rid of the cap, which would have rendered the program useless, and keeping the one-year extension in place. You live to fight another day. We go back and start planning for next year, as we’re doing now, figuring out how to build more grassroots support.
JRW: I’d like to talk a bit about some local history. No U.S. city emerged from the urban renewal era unscathed. But in the early 1960s, in downtown Minneapolis alone, some 200 buildings across 17 square blocks were razed—one-third of downtown, gone forever. How much of this history informs New History’s mission?
ME: I would zoom out to look at urban development more generally. Geographically, New History focuses on what I think of as the Upper Mississippi River corridor, meaning the states that border the Mississippi pretty much from the Mason-Dixon to Canada. These places have similar development patterns, stories, and architectural requirements. So, for a variety of reasons, there’s a pattern that happened in these cities, towns and states.
In 1956, when you had the Federal Aid Highway Act, that was the biggest public infrastructure program to date, and it plowed through cities across the country. Now couple that with the urban renewal program of the ’60s, and that leads you to what happened in Minneapolis. But this happened pretty much everywhere! It’s no coincidence that in 1966 the federal government passed the National Historic Preservation Act. This was the most far-reaching historic preservation legislation we’ve ever had. It created the National Register for Historic Places, the National Historic Landmarks Program, the American Council for Historic Preservation. All of that came out of the 1966 act, and it all happened on the tails of these two massive federal programs that changed our cities forever. The big irony here is that what we cleared out in the ’50s and ’60s and replaced with urban renewal–era modern buildings, those are what we’re saving today. Those represent the next wave of preservation.
JRW: Funny you mention that. It makes me think of the present-day efforts to “save” New York’s Penn Station and find reuse solutions rather than demolish it, all despite the station being universally loathed. This pushback, on the part of some at least, feels principled because it’s trying to avoid repeating history’s mistakes.
ME: When Postmodernism as an architectural movement becomes historic, that’s going to be a fascinating time!
JRW: You once said that “historic preservation has too long valued the buildings over the users.” What do you mean by that?
ME: I’ve always said that use is the best form of preservation. Everything we do at New History is about keeping buildings in use, keeping them occupied and alive, from a historical perspective, an economic perspective, and a community perspective. What the preservation regulatory system is built around is the idea that physical materials represent history. And the more of those physical materials we can keep, the better job we’ve done at preserving history. Well, that doesn’t work well for me. Sometimes you end up keeping so many of those historic materials that the building can no longer function. Then you’re left with a building—a so-called “historic building”—that’s obsolete and inaccessible. It becomes a ruin, it becomes a public safety issue for its city, and eventually, it gets knocked down.
When I look at how preservation is practiced and the standards that are used, most of them are set up to preserve as much of the material as possible and implement the least amount of change. My personal belief is, the more we can use these buildings, the better job we’re doing at maintaining history. So I prioritize the users over the materials themselves, which is frankly not aligned with historical preservation regulations.
JRW: Circling back to the state’s tax credits program, clearly the fight continues. Knowing what you now know, and considering recent events with the one-year extension, what would you like to see for the program going forward? Will your advocacy work change in any way?
ME: This past year was the first time I stepped into a more visible advocacy role. It was a new experience for me, and what I learned is there are many other opportunities to expand the number of voices and connect with other industries, groups, trade organizations, you name it. There are so many people who benefit from this program that aren’t contributing their voices to the cause.
What I do well, just in my business, is connecting the dots across a lot of different types of people and industries. We’re constantly matchmaking. I need to take that same approach with my advocacy work. This means finding and working with teams of people who recognize that we need more affordable housing, people who are fighting for more sustainability in our buildings, people in job-creating industries who need to be communicating how important this program is. The learning curve for me is realizing how important those connections and coalitions can be. Historic tax credits have traditionally been considered a historic preservation tool, whereas I see them as an economic development tool. I should be connecting with more people to spread that message.
JRW: Your focus is on reframing that narrative.
ME: Exactly. Our work is all about economic development and not some museum-like preservation.