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Greenville Business Magazine

Incentives play a role in helping developers with adaptive reuse projects

Jul 09, 2019 09:45AM
By Jenny Boulware

In Columbia, the Curtiss-Wright Hangar at the Jim Hamilton-L.B. Owens Airport is now the home of the Hunter-Gatherer Brewery and Alehouse. The circa-1866 Robinson Building on Main Street is now the home of The Grand, a boutique bowling alley, restaurant, and bar. The Palmetto Compress & Warehouse Company Building, where the iconic painted signage advertises a capacity of 50,000 bales of cotton, is now the home of an apartment complex.

These are just a handful of examples of the push to preserve and adaptively reuse historic properties around Columbia, and they’re part of a trend that’s become easy to see around the state and nation as well. The benefits of adaptive reuse are straightforward—putting new life into existing structures can help to reverse cycles of disinvestment in underutilized historic buildings. An added bonus to adaptive reuse is the retention of the irreplaceable character of our cities and towns, including some of the original materials and energy spent building the space.

Historic preservation is one of the goals of Main Street America and its local coordinating program, Main Street South Carolina, which is a program of the Municipal Association of South Carolina. Main Street SC has additional overarching goals in the works assisting 26 participating communities around the state, and all the goals are interconnected parts of downtown revitalization—organizing efforts, creating effective promotion and design improvements, and, over time, building a core of economic vitality. 

Toward the end of preserving and finding new uses for historic properties, Main Street SC helps members understand the benefit of incentive programs. When federal, state, and, in some cases, local incentives are stacked together, they can potentially add up to more than half of qualified rehabilitation expenses. The financial challenge of a project can dramatically change for a developer and can make otherwise impossible projects a reality. 

Consider the credits available through the S.C. Abandoned Buildings Revitalization Act, which is currently in effect through 2021. It requires a property to be at least two-thirds vacant and non-income-generating for at least five years, and for the taxpayer seeking the credit to not be the one who owned the building immediately before the abandonment. It also requires a minimum investment, scalable by the local population—if there are more than 25,000 people in the area, then the investment must be at least $250,000. An approved project meeting all criteria can receive a credit of up to 25 percent of either income taxes or property taxes for at least five years. 
For all the examples that can be found in Columbia, there are plenty elsewhere in the state as well. Built in 1930 in Greenville’s West End, Claussen Bakery closed in 1973 and the building lay dormant for years. Structurally unsafe after disuse, it was gutted. In 2014, a real estate partnership began renovations to accommodate office space and commercial business. Today, an architectural firm serves as the anchor tenant while the ground floor focuses on small businesses.

In Clinton, meanwhile, a bank has been given new life as a mixed-use space with three market-rate apartments upstairs and three commercial spaces on the ground floor. The First National Bank of Clinton features a range of first floor commercial space—450 square feet, ideal for entrepreneurs, to a 1,200-square-foot space once occupied by the First National Bank of Clinton. The rehabilitation leveraged federal and state historic tax credits, as well as the abandoned buildings credit. Character-defining features were retained or recreated, including the corner entry, historic storefronts with prismatic glass windows, interior skylights, and the historic windows and pressed-tin cornice. Another reuse project is already underway in Clinton and has secured full leases. These projects are game changers in smaller communities. The buildings become destinations in and of themselves. 

Adaptive reuse brings plenty of construction challenges in the process of blending modern construction with existing elements, built in a different time with different materials and usually for a drastically different purpose. Its growing success, however, speaks for itself. Residents, visitors, and customers alike are drawn to destinations that have a traceable evolution, and a story to tell.