Preservation architecture adapts to difficult times

By Lisa Owad
-Aug. 10, 2010-

A recent exhibit by Chicago Women in Architecture at the A.J. Kane Gallery downtown might have perfectly portrayed the current state of American architecture – bleak.

“Architects Doing Other Things” featured 30 architects who started exploring new fields when their workflow slowed. One architect volunteered at a musical summer camp for girls. Another started baking French pastries.

For architects and developers working in preservation, survival in the current economic landscape depends on adaptation.

Survival of the fittest

“We started seeing an effect right in the beginning of 2009,” said Bob Score, an architect with Harboe Architects, a firm that specializes in restoration and preservation. “We may have seen it later than some because we had some larger projects carrying over.”

“The preservation movement has held up better than new construction and development,” said Walker Johnson, the principal architect with Chicago-based Johnson-Lasky Architects. “Typically, the client and owner is an institution and they may have some money. We’re working presently on three buildings at the University of Illinois in Urbana.”

While the industry struggles to stay afloat, firms that engineer the preservation of Chicago’s numerous historical buildings are realizing that their specialization may be their strongest asset.

“We have just gotten a new job,” Johnson said, “the biggest one we’ve had, at the University of Illinois library. That’s about a $3.5 million project.”

That’s not to say that preservation architects have an abundance of work. “We had someone leave,” Score said, “and we didn’t replace them. But we haven’t had to lay anyone off.”

Harboe Architects, one of the pre-eminent firms in the Chicago preservation field, has 12 projects at the moment. But, they’ve been more difficult to come by.

“When the economy slows, it becomes very competitive,” Score said. “Overall, there’s less money for construction as a whole. Not as many projects, and the ones out there have a lot more competition.”

Firms that don’t specialize in preservation are competing with the specialists in an attempt to stay afloat.

“They’ll try to put their oar in and hope they get the work,” Johnson said. “But if the client is halfway astute, that doesn’t happen. Conversely, we put our oar in for development projects as well.”

Johnson-Lasky, which was formed in 1992, works in design and planning, as well as preservation.

“Guys that did only development work,” Johnson said, “or only housing, they’re really hurting.”

Paying the bills

Even in difficult economic times, preservation projects might have an easier time getting funding than new developments.

“For smaller clients like religious institutions and museums,” Score said, “they often get grant funding from the state or nonprofit organizations for studies or smaller components. Some of our larger projects have other funding sources, like TIF (Tax Increment Financing).”

Harboe Architects’ current restoration of the cast-iron facade on Louis Sullivan’s historic Carson, Pirie Scott Building is one such project.

“The cast-iron was completely funded by tax credits and TIF,” Score said. “That’s unusual, particularly for a project of that magnitude.”

Money from government agencies has helped keep preservation work afloat – for now.

“Most of our large development projects are taking advantage of some sort of financial incentive,” Score said, “whether TIF or tax incentive.” He estimated that privately funded projects comprised only 15 percent of Harboe’s work.

But even public money is starting to disappear. Johnson-Lasky recently completed several projects for the U.S. navy but doesn’t expect to see any more soon.

“They’ve run out of money,” Johnson said.

With public funds running out, two options remain: private financing and fundraising. This is where the recession catches up to preservationists.

“Private developers don’t have the resources right now,” Score said.

Developing Woes

One casualty of the recession is the planned renovation of Chicago’s Schulze Bakery building, which is listed on the National Registry of Historic Places. Designed by John Ahlschlager & Sons and built in 1913-14, the bakery occupies an otherwise vacant lot at 40 E. Garfield Blvd. in Washington Park.

Ghian Foreman of Maktub Development and his partners bought the historic building for $3.1 million with the intent of creating jobs and revitalizing an area plagued by vacant lots.

“It’s a beautiful, iconic building,” he said. “It seemed like it could be an anchor to rehabilitate the area.”

Maktub planned to repurpose the building as a mixed-use structure with 88 apartments and 40,000 to 50,000 square feet of commercial space, according to Foreman. They brought in a Cleveland-based development and management firm that specializes in historic renovation, The Ferchill Group, to help preserve the historic structure.

“We bought the building with cash in late 2006,” Foreman said, “thinking we could refinance. Well, early 2007 is when everything fell apart. So we couldn’t get a loan.”

In 2006, the building was appraised at $4.8 million, according to Foreman. Three years later, in September 2009, that amount had risen to $5.8 million. But by July 2010, the building’s value had dropped to $4 million.

“We needed to finance about 40 percent of the debt,” Foreman said. “Two or three years ago people were financing 90 percent of their debt.”

With no way to fund the restoration, Foreman was forced to change tactics.

“We looked at new markets, historic tax credits, TIF and low-income market credits,” Foreman said. The project received nearly $5 million from the Illinois Neighborhood Stabilization Program, but even that didn’t help. The funds have taken so long to reach Maktub that they’ve started to explore other options. And more options mean more complications.

“It’s hard to walk away from $5 million,” Foreman said, “but waiting for that $5 million has held us up for over a year.”

Now Foreman and his partners are hoping to find a tenant for the building. But with the building’s drop in assessed value, investors are hesitant to commit.

“A tenant will help us get this financed,” Foreman explained. “Then the other things will fall in place.”

A blessing in disguise?

The lack of available financing for developers isn’t all bad news for preservationists though.

“In a way, the bad economy tends to be as good for preservation as it is bad,” said Lisa DiChiera, the Director of Advocacy at Landmarks Illinois, an organization dedicated to preserving architectural history.

“Teardowns had become such an epidemic,” she explained. “You don’t see that happening quite as much. People just don’t have the money to buy an existing building, tear it down and build a new one.”

But that doesn’t mean they are eager to invest in preservation. At the historic Ragdale house in Lake Forest, board members are in the midst of a fundraising campaign to renovate the 1897 home designed by Howard Van Doren Shaw. Johnson-Lasky Architects has been working on the project for nearly three years now.

“Ten years ago [Ragdale] had been in quite a bit of disrepair,” said Eric Thompson, Director of Development at the Ragdale House. “It wasn’t up to code for the city of Lake Forest.”

Thompson estimates the entire marketing campaign will take three to four years, but they have had to lower their expectations during the recession.

“You set an achievable goal, you achieve it and then you exceed it,” Thompson said.

The board estimates they need $3 million for the entire project and has managed to meet their first goal of $1 million in a year. But it hasn’t been smooth sailing.

“People are taking longer to make decisions,” Thompson said. “So that’s really stretching the timeline. But in our campaign that shouldn’t make that big of a difference because we went with a smaller campaign goal that was more feasible.”

Changing tactics to fund a preservation project isn’t unusual. In fact, it may be the one way to ensure success, according to Landmarks Illinois.

“One thing that’s getting funded these days is green initiatives,” DiChiera said. “A lot of people don’t equate historic preservation with being green, which it innately is. It’s continually frustrating.”

Frustrating it may be, but gaining funding for a green project still means work in the long run. With little work on the immediate horizon, more work in the long run is well worth pursuing.

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