Following bond exhaustion, city looks for new preservation funds

Phoenix's Historic Preservation Office, which has saved several historic buildings like the Ellis-Shackelford House (pictured above), is seeking new project funding sources. (Summer Sorg/DD)

With funds from the 2006 Bond Fund running low, and no new bond election in sight, historic preservation efforts face a financial challenge.

“This is the first time we’ll be without funds,” said city of Phoenix Historic Preservation Officer, Michelle Dodds. “Our budget for my office comes from the general fund and that basically is just made up of salaries of staff members,” Dodds said.

Many historic preservation projects have been completed with money from the 2006 Bond Fund.

“The largest grant I think we’ve given was $500,000,” Dodds said. “That’s for the Luhrs building and the Luhrs tower.”

Dodds said the second biggest grant went toward The Gold Spot on Roosevelt and Third Avenue. Dodd said it was threatened with demolition four times “and in the end we ended up giving them $400,000 in grant funds.” The fees associated with the legal process on the project ended up costing more than the size of the grant.

Some of the other big projects the 2006 bond money went toward included Tovrea Castle, the Steele Indian School Park buildings, and the Ellis-Shackelford House on Culver and Central.

Dodds said close to a million dollars went into the Ellis-Shackelford House.

“And that is like the last in-tact house of what used to be millionaires row,” Dodds said.

“Central used to be just lined with those, up and down Central, before they started bulldozing them and putting up office buildings,” said Mark Briggs, former chair of the Historic Preservation Subcommittee of the 2006 Bond Fund.

A lot of work needed to be done on the building to stabilize it, according to Briggs. The building was leaking and had electrical and plumbing problems. Bond funding helped finish the restoration.

Now the Ellis Shackelford House is used for events occasionally and includes office space on the second floor.

Larger projects like the Shackelford House are known as “demonstration projects.” However, funding does not solely go to them.

“A lot of the money went towards historic neighborhoods, in the form of these smaller grants, to help homeowners with external features that the public could see, to maintain the historic integrity of the neighborhood and the buildings in it,” Briggs said.

Briggs said the Warehouse District was the only other area where bond funds were used for larger projects.

Bob Graham, an architect who has worked on projects funded by historic preservation bond funds, said the most prominent project he was involved in was Desoto Central Market.

Graham said the money the city used for the building “probably made the difference between being able to save the roof structure or not, because it was on the verge of having to be replaced,”

Prior to 2006, there have been two other historic preservation bond elections.

“I’m rounding the numbers off, but about $15 million was approved by the voters in 1989 and then subsequent to that, in 2001 there was about $14 million and in 2006 there was about $13 million,” Dodds said.

According to Dodds, the bonds were channeled into four grant programs which vary in amount: exterior rehabilitation, low-income, demonstration projects and warehouse-threatened buildings.

“So the question is, what funding source do we use now for things like this?” Dodds asked.

The Phoenix Historic Preservation Commission recently formed a Financial Subcommittee in September. As of mid-October, the committee had not met, but one of their intended purposes is to discuss current and future funds for preservation in Phoenix.

Recently, the Historic Preservation Office worked with the Community and Economic Development Department.

“They have a funding source that they’ve allowed us to tap into for economic purposes,” Dodds said in reference to the Downtown Community Reinvestment Fund.

“For example we’ve stretched out our bond funds,” she said. “In our demonstration project for the Van Buren we had $75,000 left in our demonstration grant program, so I went to Chris Mackay, who’s the director, and I said ‘can you use any of your downtown community reinvestment funds to augment- it’s a huge project and this is all we have that’s available to give them- do you have additional funds?’”

Mackay contributed $175,000, bringing the total to $250,000.

Briggs offered his own ideas of what could be done for future funding.

Briggs said when funding at the city-level is limited two options are available: another tax dedicated to historic preservation or a tax credit.

“You could do like a tax credit that gives people certain tax credit if they put certain amounts of money into a historic building,” Briggs said.

Briggs said this is also uncommon at the state and city level, although a federal option exists.

“With bond funding being so dependent on property taxes, what if, if we go through a big recession and the real-estate goes down in value precipitously, then the ability to bond goes down, and how do we create a more stable, year-to-year, predictable flow of cash that can be used for these grants for historic preservation?” Briggs asked. “I think that’s the big challenge,” he said.

Former chair of the Phoenix Historic Preservation Commission Donna Reiner said the problem of finding funding is twofold.

“Money speaks. And developers seem to have the most money, or at least they give that impression,” Reiner said. “And people who are trying to save or protect, or in some way try to get people to reuse historic buildings, don’t necessarily have the money to do that.”

“There’s a lot of push and shove going on,” Reiner said. Reiner said some of the push is coming from the Community and Economic Development Department, saying she “is not always sure that they really care about historic buildings.”

Although funds are limited, Reiner said there are “crusaders” trying to do as much as they can with bond money gone.

“Sometimes we have to fight the city against themselves,” Reiner said.

Briggs thinks part of the struggle lies in real-estate and who specifically owns the building which needs preserving.

“Historic preservation isn’t always, but usually involves real-estate, and as an asset sometimes that real-estate is owned by a government entity, but most of the time it’s owned privately,” he said. “It’s this thing where the public has an interest in preserving the historic building for example, but the public doesn’t directly own that building.”

Briggs added in some cases it will cost the owner less to knock the building down and start from scratch.

“Sometimes difficult to intercede with an owner and try to get them to preserve the building and then tell them they have to jump through all these hoops and figure out all these things, you know, at the federal level and the state level and the city level,” Briggs said.

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Correction: November 7, 2017:
A previous version of this story referred to Donna Reinner as secretary and treasurer for the Arizona Historic Foundation. The story has been updated to reflect her role as the former chair of the Phoenix Historic Preservation Commission.