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Above: Des Moines Municipal Service Center




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Understanding SHPO

Friday, January 25, 2019

Throughout our 107 year history, we have completed countless historical restoration projects. These projects require careful consideration to preserve and restore the original, historically significant aspects of the space. Some owners will elect to receive a tax incentive on historical restoration projects which requires a lot of time, documentation and carefully detailed work to complete. We have helped owners over the years receive these tax credits while also restoring the incredible spaces. Project Manager / Shareholder Josh Braby explains how the process works.

By: Josh Braby

Historical restoration projects are quite different from new construction projects. We are tasked with maintaining the original architectural integrity of the building while upgrading the space to meet today’s technology, safety and other code standards. These projects require meticulous attention to every detail, documentation of the original space and construction scope of work, and the very best people to complete each piece of the project. For some historical restoration projects, owners will apply for a twenty percent tax incentive and part of our job is to work with the design team and owner to help them apply for it.

When an owner chooses to apply for the tax incentive they must go through a three step application process with the State Historical Preservation Office (SHPO). By going through the process, owners are committing to the responsible restoration and preservation of historically significant buildings. Before we can even begin, the building must be listed on the National Register of Historical Places through the National Park Service. 

Once the building is on the list we help them document the existing conditions. This includes acquiring any historic data such as old photographs, deeds, and newspaper stories of interest that could help determine the historical appearance of the building. The less of the building’s “historic fabric” that remains intact or available – like doors and windows, finishes and trim – the more challenging it is to receive federal and state tax incentives. 

Stained glass at World Food Prize

Above: Stained glass at the World Food Prize - one element that was painstakingly restored to meet SHPO requirements.

After we’ve provided the historic proof we move into the Part 2 application. This is where we and the design team really come into play. Part 2 requires drawings that detail the project’s proposed scope of work. The drawings must clearly define the historical elements of the building and show how they will be impacted during construction. We must know what the historical elements are and what the plan is to preserve their original intent and appearance. For example, if there is an existing doorway that is no longer needed, we would not want to remove the door and infill the opening with new material as that would change the original appearance and provide a false sense of the building’s history. Instead we would look for ways to fix the door in place even if it’s not functional for today’s purpose. 

During this portion we would also note the scope of work that is a Qualified Rehabilitation Expense. This defines the scope of work that is eligible to receive the incentive and also defines the scope that is not. Each scope item that is identified as a Qualified Rehabilitation Expense is provided with a budget that is utilized by the Internal Revenue Service (IRS) to determine the total incentive that may be allocated to the project. Unqualified expenses are part of the entire project scope of work but these expenses are not eligible to receive any type of incentive. For example, the cost to restore the building is a Qualified Rehabilitation Expense however to restore or improve the site around the building is not. The owner my choose to do site improvements for the betterment of the project however it is not something the IRS will deem as a qualified expense for the incentive program. 

Windows, floors and woodwork were restored

Above: To receive the tax incentive, as many original details as possible must be carefully restored including woodwork, archways, windows, doors and floors.

Finally construction begins after the plans are approved by SHPO. We still have to detail everything we do throughout construction though. Any change to the scope, for any reason, must be submitted to the State Historical Preservation Office for review and approval as an “Amendment” to the approved Part 2 application. At the end of construction we must complete the Part 3 application. This includes an updated set of construction documents that detail the scope of work and all changes made throughout construction. It also includes the total completed qualified expenses and photo documentation. The photos must show the original appearance of the building and how they were changed (if at all). The final Qualified Rehabilitation Expenses are then submitted to the IRS for final approval of the tax incentive.

The biggest challenge to working on historically significant projects is simply respecting the historical integrity of the building. We have a lot more construction codes around energy and accessibility requirements than at any other point in time. Working to upgrade historic buildings with new technology that is safe and comfortable while preserving enough of the original history can be a challenge. We find it critical to work closely with the State Historical Preservation Office to determine the best possible solutions for each project. Restoration projects require a team that is willing to collaborate closely with one another, we have to have an open mind and be able to come up with creative and viable solutions that have usually never been done before. Fortunately at Neumann we’ve always taken the time to do these kinds of projects well. Much like we try to preserve our own company history, the history of our communities needs to be preserved and we do our best to help make that happen.

Gold leaf and murals were restored at the World Food Prize

Above: When completing the World Food Prize, the team worked to preserve even the smallest details to murals, windows and gold leafing.