How To Legally Redevelop a Historic Property

Although Ohio is young compared to many other parts of the world, the Buckeye State is still proud of its history and architectural heritage. This pride is reflected in a wide range of federal, state, and local policies designed to help protect buildings and properties of historic value. If you happen to be the property or homeowner of such historic buildings—or are thinking about buying one—you need to understand how the law works in this area.

“What we always tell people is to get consultants and other experts involved early,” says 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.”

Getting Listed on the National Register of Historic Places

You 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. Currently, over 4,200 places in Ohio are 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.

Getting Federal and State Tax Credits for Rehabilitating a Historic Structure

On the plus side, if your project involves rehabilitating a historic structure, you may be entitled to 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.”

Hurtuk adds that developers generally work with consultants to ensure they comply with all the eligibility requirements. However, there are often state laws and local government programs as well.

The 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 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).

How Historic Designations Are Made

“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.

Getting Legal Help with Historic Redevelopment

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 the 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.