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History as a selling point: profitable uses of historic buildings.


Profitable Uses of Historic Buildings

At the turn of the century, the Henderson Block building at the corner of 200 S. and 300 W. (now 400 W.) was home to William Henderson's thriving grocery business. With its proximity to the Union Pacific and Denver and Rio Grande depots, Henderson was assured efficient transport of fruits, vegetables, and other food items. Today, the building's distinctive facade and unique interior is home to Clark-Leaming Design Group, Baker Design Group, and Utah Business magazine, among others. Renovation has made the building more valuable to both its owner and its tenants.

Utah has a seemingly inexhaustible supply of modern, inexpensive commercial space, yet many companies prefer to locate in older buildings. Properly renovated, older buildings can impart a sense of authenticity and excitement to a company's image and, for some businesses, the restored structure is a key component of their marketing plan.

"There's something very comforting about dining in an older establishment," said John Williams, an owner of Gastronomy restaurants. "It gives you a sense of place and history and conveys that there has always been activity going on around you. It's an experience that isn't easily duplicated in a brandnew facility."

Why Should We Preserve?

During the last 30 years, the skyline of Utah's three largest cities has changed dramatically. Older structures have been razed to make way for high-rise office buildings, and some neighborhoods today would be unrecognizable to former inhabitants. At the same time, however, there has emerged an awareness that Utah enjoys a unique architectural heritage that deserves to be preserved. Federally funded organizations such as the Utah Historical Society and the Utah Heritage Foundation, a nonprofit group allied with the National Trust for Historic Preservation, work with legislators and the private sector to preserve the state's architectural legacy.

"Preserving historic architecture is important because it tells us a lot about our culture," said Mike Leventhal, director of the Utah Heritage Foundation. "Historic buildings provide us with a sense of continuity--a reference point that shows us where we have been and where we are going." Leventhal cites the City-County Building as an example of an edifice that continues to have meaning to the inhabitants of Salt Lake City. "When you go to do business in the City-County Building, there is a sense of occasion to that experience. You know that your grandparents or great-grandparents also trod those same steps."

Preserving historic architecture also celebrates what is unique about a particular city. "As you travel across the United States," said Leventhal, "it's possible to see similar types of buildings, whether they are Victorian, Neo-Classical, Art Deco, or Neo-Colonial. But they are not the same buildings because pre-1940s structures were designed according to a region's climate. For example, an 1860s building in Salt Lake City will have more wall space and fewer windows. A similar structure built in the South will contain more window than wall space. You end up with buildings that reflect the values of a particular city, and we should applaud these differences because they give meaning and diversity to American culture."

What Is Worth Preserving?

If historic architecture is worth preserving, how do we determine which buildings should be restored and which should go by way of the wrecking ball? The Utah Division of State History's preservation office, which is federally funded by the National Parks Service, uses two criteria to determine if a building is eligible to be listed on the National Register of Historic Places, including: (1) a building must be at least 50 years old; (2) the building must be architecturally or historically significant. However, the National Register is basically an honorific designation and does not provide any protection for these buildings. Protection for historic buildings usually occurs at the local government level through city ordinances.

"Buildings can be listed in different ways," said Barbara Murphy, preservation planner at the Utah Division of State History. "Sometimes they are listed in groups, called districts--for example, the Avenues and Capitol Hill areas of Salt Lake City."

Currently the Utah Division of State History, with the Utah Heritage Foundation, local government support, and private fundraising, is involved in helping the Egyptian Theatre Foundation (a private, non-profit foundation) restore the Egyptian Theatre in Ogden. "We almost lost this fine example of Egyptian Revival architecture," said Murphy. "It has taken combined financial efforts of several groups and strong public support to make this rehabilitation possible."

Both Leventhal and Murphy agree that not every old building is worth preserving. "Many, buildings were not designed to live a long, productive life," said Leventhal. "Some tenement buildings from the turn of the century were put up cheaply and quickly. Not all old buildings have good design or are finely crafted."

Furthermore, urban blight within a city may make it too costly or undesirable to restore an area. "It makes sense to demolish older buildings once they have decayed beyond rehabilitation," said Les Kinsey, general manager of Trolley Square. "When the area has become an eyesore, because the buildings weren't well constructed, or the structures have outlived their usefulness, the best course may be to demolish them and revitalize the area with a newer look."

When Is the Cost Worth It?

"Renovation" and "restoration" are not interchangeable terms. Renovated buildings are older buildings that have been "made new," often they are fundamentally different from the original structure and simply retain architectural features reminiscent of the original. Restored structures, by contrast, are buildings restored to their original condition, sometimes without regard to modern conveniences.

Either way, costs vary widely according to the nature of the project. Whether the costs are justified depends on the nature of the business, the reason for renovating or restoring, and other factors. "You need professional architects and contractors who are experienced in doing that kind of work," said Williams. "Otherwise, you could end up with a very expensive project." The interiors of all of Gastronomy's restaurants have been totally gutted prior to renovation. "Basically, we started over and put in new mechanical systems--heating, air conditioning, plumbing, and electrical," said Williams. "Then we've created new interiors that take advantage of the original architectural charms of these buildings."

Howard Clark, of Clark-Leaming, cautions that renovation costs are affected by the integrity of the original building. "It all depends on what you have to work with. If a building needs extensive repairs, it may not be worth renovating." Clark was involved with the Arrow Press Square renovation from its inception, and he concedes that expenses in renovation varied considerably among the six different buildings there.

When Clark-Leaming purchased the Henderson Block in the early 1980s, they were delighted with the workmanship of the building. Its joists are 14-square-inch-thick timbers, spaced four or five inches apart. "We had a lot to work with," said Clark. "It was a marvelous opportunity, and the building was structurally sound. If we had been forced to do major repairs, we might have reconsidered the purchase."

One of the architectural firms involved with the two-year $30 million restoration of the City-County Building was founded by Burtch W. Beall, Jr., FAIA. Over the past 20 years, Beall's firm has carved a reputation as a leader in historical restoration. In fact, Beall was recently named chairman of the Utah Arts Council, which is directing its efforts to restore the Union Pacific Depot.

"One of the things we stress when working on restoration projects is communication and prioritization," said Holli Adams, architect at Burtch Beall. "There's a lot of give and take involved--and all of that has an impact on expenses. In the City-County Building restoration, for example, some of the non-public offices were not restored to their original 1891 appearance because of functional requirements and expense. It is difficult to justify a faithful restoration of historic details when they are not functional or necessary to preserve the historic integrity of the building."

One of the less obvious costs in restoring older buildings is making them earthquake proof. A major expense in the City-County Building was the installation of a base isolation system, the first of its kind in the world. When Trolley Square was given a facelift in 1986, the cost of bringing the structure up to seismic code was enormous. "When a business is located near a major fault, it's only prudent to spend the money to make it earthquake-proof, but the cost is very high," explained Kinsey.

Mantle of Success

One of the advantages of locating in an historic building is the sense of history and image it conveys to a business. "If your office is in the Kearns Building," said Leventhal, "you already have a prestigious and recognizable address. The building represents a sense that you have arrived--a mantle of success is bestowed upon you by virtue of the fact that you are located in a building that has fostered other successful businesses."

Leventhal believes Gastronomy has been particularly successful in establishing a sense of place. "Their decision to use older buildings has been in some measure responsible for their success. An older edifice lends an air of establishment and respectability to their restaurants, as if they have been in those locations for decades."

Tax credits are available for the restoration of historic buildings. Twenty percent of the rehabilitation costs can be written off, and the other 80 percent may be taken as straight-line depreciation. Two developers in Utah, PSC, in Salt Lake City, and Kier Corp., in Ogden, have been able to make restoration of low-income housing projects economically feasible. PSC has restored some of the Covey Apartments and the Meredith in Salt Lake City and is currently working on the Ivanhoe. Kier Corp. has completed the Madison School in Ogden and the Mt. View Motor Courts.

Another advantage in restoring or renovating older buildings is the impact on tourism. "In any city there are areas where the most prestigious businesses are located," said Leventhal. "When tourists visit a city, these are the sights they want to see--Trolley Square, Park City's Main Street, and so on--the places where they can get a sense of history about the city."

Return on Investment

In the early 1970s, Gastronomy's Williams decided to purchase a building on Post Office Place for the establishment of a private dining club. "When the New Yorker opened," he said, "people thought we were crazy because the neighborhood was pretty down-at-heel, and the idea of spending money on a building that should be bulldozed seemed a total waste."

Gastronomy's success with the older building is, of course, legendary. Today, all Gastronomy restaurants (the Market Street Grill, Market Street Broiler, Cafe Pierpont, and Baci Trattoria) are located in older buildings that have been extensively renovated yet retain their original facades.

Currently, Gastronomy has announced plans to renovate the old Salt Lake Hardware building, chosen for its proximity to the Delta Center, the new home of the Utah Jazz. Renovation will be done in several stages as a long-term investment.

"We're very bullish on downtown Salt Lake City and on the value of older buildings," said Williams. "We believe that as more businesses realize the advantages of being located in the city's center, the downtown area will become stronger and more vital. Preserving the city's older buildings helps attract people and dollars to the area's businesses."

PHOTO : The Salt Lake City and County Building is one example of worthwhile historic preservation.

PHOTO : A view of the Henderson Building in the early 20th century. Now owned by Clark-Leaming Properties, the building has been renovated and is home to Utah Business.

Michele Swaner is a business consultant and free-lance writer based in Utah.
COPYRIGHT 1991 Olympus Publishing Co.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Author:Swaner, Michele
Publication:Utah Business
Date:Oct 1, 1991
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