3 minute read
Restoration versus New Construction
by Wilson G. Martin
Top: The newly reconstructed interior of the New Yorker Club in the old New York Hotel, Salt Lake City. Bottom: The Mclntyre Building, 68 South Main, Salt Lake City, was built in 1909 by Richard Kletting, a noted Utah architect. The developers responsible for rehabilitation are Miller & Noble Co.
Photographer: Robert D. Welch
The Mclntyre Building in Salt Lake City was one of the first buildings west of the Mississippi to receive certification under the Tax Reform Act of 1976. This legislation provides for special tax incentives for the rehabilitation of commerical and income properties, including the ability of an owner to take five-year amortization of all rehabilitation costs or to choose an accelerated depreciation method on a substantially rehabilitated structure. The tax incentives also include certain penalties related to demolition costs and new construction built on the site of the demolished historic structure.
These penalties and benefits were intended as special tax incentives to ensure the protection of our cultural heritage. However, there are other benefits in addition to the preserving of historic resources. Revitalization of buildings employs 109 people per million dollars expended, versus 69 per million expended for new construction (Source: Local Public Works, Round I). Rehabilitation is also more energy
efficient than new construction in that less new material is used in rehabilitation, and this helps reduce our dependency on foreign oil imports.
The preservation and rehabilitation of these older structures is often less costly than new
construction, with most of the rehabilitiation in Utah running 60 percent of new construction costs. These projects often come under the $20 per square foot rate, including both purchase and rehabilitation. With these incentives, historic preservation and rehabilitation has become a major economic stimulus to the country and a tax shelter for developers. The addition of the new 1978 Revenue Act, which provides a 10 percent investment tax credit on top of the 1976 benefits, has further increased developers' interest throughout the state of Utah.
The Mclntyre Building, at 68 South Main, Salt Lake City, developed by Miller and Noble, Inc., has been certified for these benefits. However, due to the fact that each floor was developed and sold as separate office condominiums, each floor had to be individually certified. So far the third and eighth floors have been certified, and the fifth floor is pending certification. The building was rehabilitated at a cost per square foot of $12 to $18, with 45,000 square feet on each floor. Each floor was modified to
Top: The New York Hotel, 50 Post Office Place, Salt Lake City), was built in 1909. The architect was Richard Kletting. It was rehabilitated by John Williams developer with Prescott Muir as architect. Middle: The Denver & Rio Grande Depot -presently under restoration to become the new home for the Utah State Historical Society. Bottom: A Newly renovated interior in the McIntyre Building, Salt Lake City.
meet the individual owner's needs. New mechanical heating and cooling systems were added throughout the structure.
Another early building to receive tax certification was the New York Hotel. The architect was Scott Muir, and the developer was John Williams. This building needed substantial rehabilitation of the interior, new mechanical systems, and an exterior elevator and service core. Thirty-four thousand square feet were developed at a cost of $17 a square foot.
The Smith-Bailey Drug Company Building/Firestone Building was another structure to receive tax certification. The project is currently ongoing, being completed by Development Associates, with Bob Jacoby acting as the architect. There is an anticipated development of 66,000 square feet at a cost per square foot of
about $17. This space was an open floor plan warehouse, and therefore each floor will be substantially altered to form new office space with a central lightwell being cut through the building to provide additional light to the interior. The rehabilitation also includes the adding of a parking terrace, installing new mechanical, heating and cooling systems, and adding new wiring and plumbing.
Other buildings to be certified in Salt Lake City include the Irving School in Sugarhouse, the New Grand Hotel downtown, the William F. Beer residence on the Avenues, and the Bamberger Mansion on First South. It is anticipated that a number of additional applications will be certified in the near future.
The program is still in its infancy, but already large tax savings have been passed on to the developers in restoring these buildings.
To receive tax benefits, an applicant should contact the Utah State Historical Society, 533-6017. The application procedure is a fairly simple one and the staff will be happy to assist any private developer in the utilization of these benefits for the rehabilitation of a building which is listed on the National Register of Historic Places or which may be eligible for inclusion on the National Register.
