How to Legally Redevelop a Historic Property
Staying within the confines of the federal and state landmark rules in OhioBy S.M. Oliva | Last updated on January 27, 2023
Use these links to jump to different sections:Josh Hurtuk, a real estate lawyer with Walter | Haverfield. “It’s very easy to start going down a bad path without realizing it. If you’re planning to redevelop and seek tax credits, it’s important to comply with everything along the way.”
The National Register of Historic PlacesYou have probably heard of the National Register of Historic Places. The Register is an official list of various buildings, sites and structures of historical significance maintained by the National Park Service. There are currently about 3,900 places in Ohio listed on the Register. Inclusion on the Register is largely honorific. Neither the National Park Service nor the federal government restricts the rights of private property owners with respect to the use of their property. This means that as far as the federal government is concerned, you are generally free to redevelop a historic property as you see fit using your own resources. However, if your redevelopment project involves federal funds, licensing or assistance, the law permits the Advisory Council on Historic Preservation an opportunity to comment on your project. On the plus side, if your project involves rehabilitating a historic structure or property, you may be entitled to receive a 20 percent investment tax credit, as well as other periodic grants tied to preservation. “It’s conditioned on maintaining the historic nature of the property,” says Hurtuk, who has worked with several redevelopments seeking tax credits, including The 9 in downtown Cleveland. “The National Park Service maintains the National Register, and there’s a whole slew of rules and regulations over what you’re allowed to change and not allowed to change. Generally it relates to the façade. For example, you’d be allowed to replace windows but can’t change how they look from the outside.” Generally developers work with consultants to make sure they comply with all the eligibility requirements, Hurtuk adds. But there are often state law and local government programs, as well.
Ohio Law & Local Landmark CommissionsThe State of Ohio provides local tax credits to assist with the private redevelopment of historic properties, and allows individual municipalities to use their “home rule” powers to adopt local ordinances governing the redevelopment of historic properties. These ordinances typically cover “historic districts,” and may include properties that are not listed on the National Register. A typical ordinance includes a declaration of “public policy” that spells out the goals of historic preservation (i.e. safeguarding the city’s heritage or enhancing its aesthetic character). “Most of the work I’ve done is in Cleveland, and there’s a landmarks commission that has a lot of say over what you’re doing with older buildings—and we have a lot of old, underused buildings here,” Hurtuk says. “At the local level, they try to work closely with developers. They want to protect the historic nature, but don’t try to get in the way of interrupting the use of the property.” Ordinances provide for the appointment of an independent board, often designated a “Landmarks Commission,” to determine what buildings and areas should be afforded historic designations. Unlike the National Register, local landmark designation usually carries some restrictions on the property owner’s rights. In many cases, the owner may need to obtain a permit or certificate from the local commission before making any changes to the building or its surrounding environment. The owner may also have an affirmative obligation to maintain the property’s historic character. For example, if the building has certain historic features that have deteriorated over the years, the commission may require the owner to repair such features rather than replace them. The commission may also have the power to fine an owner for noncompliance. It should be noted that local historic preservation ordinances do not override any applicable health or safety laws. And historic preservation rules are generally limited to changes affecting exterior architectural features of properties. An attorney can advise you with greater specificity about the local laws in your area. For more information on this area, check out our overview of real estate laws.
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