The road through the Foxen Canyon wine country is much what you would expect it to be: shaded by the protective reach of trees as it winds through a stunning landscape of hills and vineyards. It will run you straight through to the Santa Ynez Valley if you’ve got the time to take the long way. The rewards are the views, the serenity of having a road almost to yourself, and the freedom to let your mind wander a bit.
At some point along the journey, you’ll come across a quaint chapel on a hill that anywhere else would be out of place. But here it seems surprisingly natural, with its steeple piercing the sky, an exclamation mark to the commentary of the road.
It’s the San Ramon Chapel, strikingly beautiful in its quiet way, like something out of a landscape painting. It seems so familiar against its backdrop, as if it’s been there a hundred years. And it has been there for hundred years. And then some.
The San Ramon Chapel was completed in 1875—constructed by Fred Foxen, his brother Thomas, and Chris Clausen, a carpenter from Los Alamos—on land donated by Frederick and Ramona (Foxen) Wickenden.
The property was declared by the county board of supervisors as the first historical landmark in Santa Barbara County under an ordinance enacted for historic preservation on July 5, 1966. Now weekly Sunday Eucharist is presided over by a Josephite priest from St. Louis de Montfort Church in Orcutt.
Not every historic property is as well taken care of as the chapel. In fact, many such significant properties aren’t even identified. You may drive by homes or buildings every day that are dilapidated or otherwise rundown, but within those crumbling walls are tales of pioneer families or events that shaped the area. Because of the deterioration or neglect or obscurity, however, often the only significance these old buildings hold for a neighborhood is that they contribute to blight.
The state Office of Historic Preservation is currently trying to build support for a California State Preservation Tax Incentive to encourage the preservation of more historic buildings—not just for history’s sake, but also for the benefit of neighborhoods and the economy.
Tim Brandt, senior restoration architect with the office, maintains that the need for such a tax incentive is there, even though the economy may not seem to be in a position to support such a move. He argues that our current financial situation is exactly why the time is right.
“We don’t want it to be about old buildings. It’s about stimulating the economy, revitalizing neighborhoods, and reducing blight,” he explained.
Brandt said an incentive will encourage more owners to list their properties in the first place. Identifying more properties means an increased ability to maintain them, which ultimately means better-looking neighborhoods.
Beyond simple aesthetics, historic buildings attract heritage tourism, which means an increase in money to local coffers. Brandt said analysis in several states shows that tourism benefits from preservation.
“Preservation visitors stay longer, visit more places, and spend more money,” he said.
The idea of a state preservation tax incentive isn’t a new one. The idea has actually been bounced around for 20 years—and came close to actualization in 2001. Five years ago, Brandt identified it as one of his goals to accomplish while in his current position.
“Everyone is open to the idea,” he said. “Of course, everyone says, ‘You know you’re not going to get it through in this economy.’”
Tax incentives for historic preservation have been popular in other states, and studies on incentives and credits on the federal level have shown positive national and statewide impacts. According to Rutgers University’s First Annual Report on the Economic Impact of the Federal Historic Tax Credit, “The benefits that accrue from the investment in the federal tax credit-aided historic rehabilitation projects are extensive, and almost all sectors of the nation’s economy see their payrolls and production increased.”
An inflation-adjusted $16.6 billion federal historic tax credit cost to date has encouraged five times greater the amount of historic rehabilitation ($85 billion). That rehabilitation investment generated about 1.8 million new jobs and billions of dollars, both direct and secondary, in economic gains.
The report also found that the federal cost of the credit—a cumulative $16.6 billion in 2008 inflation-adjusted dollars—is more than offset by the $21 billion in federal taxes it’s brought in.
There are 31 states that have increased those gains by creating their own state tax incentive programs. Of those, 25 offer a tax credit for the rehabilitation of owner-occupied residences. Brandt said such an incentive can be especially beneficial to owner-occupied residences to which federal preservation incentives are unavailable or local level incentives are limited or non-existent.
Federal credits aren’t available to owners of historic properties who also live in the property. They’re only available for income-producing properties. That’s where state and local tax incentive programs come into play.
One way localities can offer incentive for historic preservation is through Mills Act contracts. San Luis Obispo has found some success on that path. The city began a pilot program in 1996 with 19 properties joining by entering into preservation contracts in return for property tax relief. By December 2006, the City Council had approved the Mills Act Program as an ongoing historic preservation opportunity and allowed up to 10 additional historic properties to be included each year, said Jeff Hook, senior planner AICP, with the city of San Luis Obispo. Hook explained that the program allows the city to enter into contracts with owners of designated historic properties who promise to preserve, maintain, and, in some cases, improve the properties in consideration for property tax savings.
Hook said numerous studies have documented benefits of historic preservation, but San Luis Obispo has seen some of the effects first hand.
The program has been a key incentive for developers considering whether to preserve and rehabilitate their historic buildings. Hook referred to the Michael Righetti house at the corner of Palm and Johnson streets. In that instance, Rob Rossi, Vince Fonte, and Brendan McAdams chose to renovate an 1877 house closely associated with an early pioneer family on the Central Coast. The house had become dilapidated over the years and was partially blocked behind a 1940s-era apartment building that had also become dilapidated.
“The developers hired Luisa Kluver, a San Luis Obispo architect, who oversaw the house’s amazing restoration,” Hook said. “The property now consists of 10 residential condominiums, with each condo owner sharing in property tax savings.”
The program has also been an incentive to property owners to request historic listing or a change in historic listing from “contributing” historic status to “master list” historic status to enable them to participate in the Mills Act Program, since only Master List properties—those 175 properties that constitute the oldest, most unique, or important historic properties— are eligible, Hook said.
San Luis Obispo has effectively put the Mills Act Program to work for 42 properties in the city, and Santa Barbara recently adopted the program as well. Santa Maria offers no such tax incentives. Neither does Santa Barbara County.
“It’s something that’s been discussed, but the county, I don’t think, is there yet,” said David Villalobos, board assistant supervising the Planning and Development Department for Santa Barbara County. “Right now, there’s a lot of interest in it, and there’s been some talk, but not a lot of movement.”
Though there isn’t a tax incentive program in place, there is a method for identifying historic properties. An owner can bring the property to the attention of the county by applying for the designation. Then the Santa Barbara County Historic Commission can make a recommendation to the board of supervisors, which ultimately decides whether or not to approve it.
The process doesn’t happen often, but when it does, the applicant usually has a property with legitimate historical significance.
“[County government is] usually very, very excited when an owner shows interest in preserving a piece of Santa Barbara County history,” Villalobos said.
That excitement makes a fairly smooth process for owners hoping to get the property designation—but not all property owners want the designation any more after they begin the process. Since there’s no real incentive to getting a property designated in the county, some don’t start the process at all, fearing limits that might be placed on the property.
“There are certain restrictions on demolishing or doing any sort of extended remodeling,” Villalobos explained. “If [owners] foresee future development, it’s just something people don’t want to deal with. … Sometimes people put feelers out, and once they figure out and understand what it entails, they change their minds.”
Facing such restrictions—and in the absence of incentive—some property owners shy away from seeking historic designation. Local communities lose out in preservation, rehabilitation, and the jobs and tax dollars generated, Brandt said.
He explained that many local governments don’t offer tax incentives for historic preservation because they may see them only as dollars being taken out of local coffers.
“What we need to show is preservation more than pays for itself in jobs and taxes from other areas,” he said. “People don’t see that.”
The state Office of Historic Preservation is in the process of forming a coalition to move forward to build momentum. It’s probably a minimum of a five-year effort right now. Ultimately, its passage would require a bill—and a legislator friendly to the idea. The California Preservation Foundation will lead the coalition once it gets underway, Brandt said.
He explained that getting the people in place hasn’t been such a hurdle, but changing the minds of the lawmakers able to make a difference may be a challenge without the right campaign.
“Right now, today, there’s no chance [of such proposed legislation passing],” he admitted. “But with a focus on jobs and stimulus and neighborhood revitalization and green sustainability, we can convince people this is the right thing to do. Preservation is down near the bottom of why we’re doing this. It’s about outreach and education right now.”
Contact Arts Editor Shelly Cone at scone@santamariasun.com.
This article appears in May 13-20, 2010.