Providence Business News

"R.I. preservation boom builds economy, careers"

Posted Nov. 25, 2006

By Rebecca Starcevic, Contributing Writer

Rob Cagnetta started his career in historic preservation in a way unusual for his profession: he got an education first.

Unlike many contractors, who start focusing on historic preservation after they have established their business, Cagnetta studied the specialty first. Then he started up a business in Rhode Island, in a niche market that lately has come into its own.

“When I started 15 years ago, preservation was cast aside and left to people who had money,” said Cagnetta, founder of Heritage Restoration, in Wakefield.

The specialty has waxed and waned with the housing market since the 1950s, when urban renewal leveled many historic buildings, sparking a public outcry. Renovating buildings was more popular when the housing market was cool. But until the 1980s, Cagnetta said, it was difficult to make a living by specializing in it.

Then, in 1986, the 20-percent federal historic preservation tax credit added to the appeal of historic rehabs. And in 2002, Rhode Island added a 30-percent state tax credit.

Since then, the number of historic preservation projects in the state has risen by 30 percent, said Ted Sanderson, executive director of the R.I. Historic Preservation and Heritage Commission, for a total of 235 projects representing $1.3 billion in private investment in the last four years.

Based on a professional economic impact study, Sanderson estimates the state’s multi-year investment in the tax credit is generating $7.3 billion in economic activity. “Put another way, each $1 of state tax credit investment is leveraging $5.47 in total economic output,” he said.

Besides an estimated $689 million in property taxes, the program has helped create 24,000 construction jobs and more than 8,000 permanent jobs.

The historic tax credit has made possible many projects that otherwise wouldn’t be done at all, developers, architects and preservationists say. Such has been the success of efforts in Rhode Island that, next June, the International Preservation Trades Network will hold its annual regional workshop at the historic Casey Farm in Saunderstown.

But preservation projects also create jobs for general contractors and other industries. Anthony Thomas, vice president of The Foundry Associates, in Providence, is now renovating the last of 12 historic mill buildings in a 26-acre park.

The renovation and historic preservation of “Building 4” is a $45 million project that Thomas said will require the work of 25 demolition workers six days a week for several months, plus roofing and masonry contractors, and two window companies – one to supply new windows, and another to restore the historic windows where they can be preserved.

The second phase of the project will employ another 200 to 300 workers a day, including mechanical, electrical and plumbing contractors, he said. “By the time the dust settles and we’re ready for occupancy, we will have engaged more than 300 construction workers,” Thomas said.

But some of the work must be done by specialists.

The most costly component of mill-building renovation is often the windows. Building 4 alone needed 5,000 new windows, Thomas said, about 1,000 of which will be restored by Cagnetta, at Heritage Restoration, to meet historic preservation standards. In some cases, that means rebuilding a window out of 64 individual panes of glass.

Restoring windows with historical accuracy can double their price, which can make such projects very difficult for developers. But restoring windows rather than replacing them is often a requirement to meet standards for historic tax credits.

Cagnetta saw this as an opportunity. Nearly two years ago, he bought special equipment and opened a shop that specializes in restoring historic windows. He now employs four people full time.

The knowledge of how to both preserve an historic building and make it useful for modern living is an important combination in this business, said Hans Strauch, a principal at HDS Architecture of Watertown, Mass., who designed the Allen Street Lofts, in Woonsocket, a 66-condominium project in the Sydney Worsted Co. mill on the banks of the Blackstone River.

There are two aspects to historic preservation that any specialist must master, Strauch said.

One is in knowing how to handle historic structures from a physical standpoint, such as refinishing exposed brick without sandblasting it apart, or removing industrial-strength grime from a mill floor, recreating windows, or even preserving a 100-year-old layer of paint.

Cagnetta agreed, adding: “It’s the hidden stuff I find most impressive. Figuring out how to repair a major component of a framing without having the roof fall on your head – that’s preservation. It’s not the ribbon-cutting or the shiny storefront, but what it takes to get to that.”

But getting to that point is not possible without the second aspect of historic preservation, Strauch said: an approach that balances project costs with historical accuracy.

“Part of the process is to come up with an approach that will work with what a building needs to be developed into, and marry that with its historical components,” he said. “You have to know what can and cannot be saved, and come up with a win-win approach.”

This also requires state and local officials to work together, Strauch said. For example, in the Allen Street mill renovation, an historic staircase was forgiven for not meeting current building codes because it is an important architectural element, and a new staircase was added elsewhere to meet requirements, he said.

Compromise is also at the heart of the tax credit program that makes these projects possible, Sanderson said. The state loses money every year in the short-term as tax credits are rewarded, but most people recognize the long-term benefits of a program that creates jobs and homes for new residents while cleaning up crumbling buildings and getting them back on the tax rolls.

“It’s examined every year, and it should be. It’s an important debate,” Sanderson said. “But now that other New England states offer historic tax credits as incentive for redevelopment, this seems like no time for Rhode Island to scale back and offer them competitive advantage.”