Part 2 – New Services for Architects: Helping Clients Discover Ways to Pay for Historic Rehabilitation Projects

Originally Published 2010

By Gary L. Cole AIA, Esq.

[The following is for informational purposes only and should never be construed as legal or business advice – architects should seek advice only from own their legal counsel and business advisors in advance when considering whether to undertake any of the services discussed in this article.]

The following is Part 2 of a two-part series dealing with new professional services for architects.  Both parts will appear in the September 2010 issue of “Licensed Architect,” published in print and online by the Association of Licensed Architects.

3. The Secretary of the Interior’s Standards for Rehabilitation – What They Mean and What They Really Mean

Central to any project’s approval for Historic Rehab Incentives is its compliance with The Secretary of the Interior’s Standards for Rehabilitation (the “Standards”), which are published by the National Park Service (NPS) as a set of guiding concepts to ensure that properties retain their essential historic character during rehabilitation. While complying with the Standards can mean qualifying for incentives, failing to comply almost always means denial. In addition to denied Historic Rehab Incentives, locally landmarked projects that fail to meet the Standards may also fail to obtain permit approval from local historic preservation commissions.

But despite the importance of a historic rehab project’s compliance with the Standards, and, despite some of the Standard’s interpretations having become a little calcified over the decades, they most definitely aren’t carved in stone. The Standards are not prescriptive specifications; they’re performance guidelines that require interpretation on a case-by-case basis . . .

The NPS describes the Standards as follows:

“The Standards are a series of concepts about maintaining, repairing and replacing historic materials, as well as designing new additions or making alterations. They cannot, in and of themselves, be used to make decisions about which features of a historic property should be preserved and which might be changed. But once an appropriate treatment is selected, the Standards provide philosophical consistency to the work.”

“The Standards are to be applied to specific rehabilitation projects in a reasonable manner, taking into consideration economic and technical feasibility.”

Architects should have both a thorough understanding of how the Standards are commonly interpreted by governmental preservation entities, and of their plain meaning – the ordinary meaning of their language as gathered from a simple, plain reading of their text – without interpretation.

But of course, the plain meaning isn’t always that plain. Consider Standard No. 6, for example, which states:

“Deteriorated historic features shall be repaired rather than replaced. Where the severity of deterioration requires replacement of a distinctive feature, the new feature shall match the old in design, color, texture, and other visual qualities and, where possible, materials. Replacement of missing features shall be substantiated by documentary, physical, or pictorial evidence.”

While this seems fairly straightforward, ambiguity and interpretation lurk everywhere – and just in the first sentence. What does ‘”deteriorated” mean? How much deterioration is too much? What’s an “historic feature?” What constitutes a proper “repair”?

Who knows? Since no two projects are the same, interpretations of the Standards must be adapted to each project – but it’s important that it’s done in a consistent, logical and legally defensible way. Neither developers nor governmental preservation agencies can lay claim to correct interpretations and applications of the Standards if they can’t back up their conclusions with well-grounded reasoning that doesn’t rely on past interpretations which may, or may not be factually similar. Repeating wrong interpretations over a long time won’t eventually make them right.

Architects who assist owners in obtaining Historic Rehab Incentives will need to be fluent in both the plain meaning and the common interpretations of the Standards. But the good news is that mastering the Standards isn’t too difficult, and some guidance exists.

The NPS publishes “Interpreting The Secretary of the Interior’s Standard’s for Rehabilitation,” a series of bulletins that use case studies to illustrate their interpretations of the Standards. While helpful in understanding the NPS’s mindset, their reasoning can be a bit skimpy between premises and conclusions, without a deeper explanation of the underlying reasoning. But on the whole the NPS’s Interpretations can be useful for at least understanding how the NPS, state preservation agencies and local preservation commissions may interpret the Standards.

A better starting point in applying the Standards to any given project is to examine the legal documents that conferred historic status on the property – usually the National Register of Historic Places nomination and/or the local designation ordinance. If these documents make specific reference to certain features, materials and spaces as the basis for a property’s historic designation, then the Standards will be particularly concerned with those aspects of the property. If they don’t, then there may be more room for interpretation when applying those Standards.

There may be disagreements between government and owners when interpreting the Standards. In such cases, it’s entirely appropriate for architects to ask governmental entities to clearly articulate their positioning in writing referring to both the plain meaning of the Standards and the legal documents that conferred historic status on the property, and, without undue reliance on their past interpretations as binding authority – which they’re not.

Architects should be able to present their positions logically and persuasively on their clients’ behalf using the Standards to their benefit. Failing to do so may require owners to perform work not required by a reasonable reading of the Standards but nonetheless required by a governmental entity. Succeeding in doing so may actually save clients money and improve both a project’s bottom line and an architect’s value to the project and the client.

4. Practice Considerations for Architects

The following is a list – though by no means an exclusive one – of practice considerations:

Scope of Services. The way in which services are described in written agreements will depend on which services are being provided. If an architect is asked to investigate the range of Historic Rehab Incentives available for a given project, then all the steps of this investigation should be clearly described.

If an architect’s services progress beyond this stage to assisting clients in obtaining Historic Rehab Incentives, then great care should be given to drafting contract language which includes, among other things: describing exactly which Historic Rehab Incentives they’re assisting the client in obtaining; the steps involved for each incentive; service milestones (coordinated with compensation provisions); a list of other professionals the architect may be required to work with; and, exactly what services the architect is not providing.

Working With Other Professionals. The successful utilization of Historic Rehab Incentive benefits usually involves working with other professionals such as accountants, attorneys, appraisers or specialty consultants. Architects might enhance their marketing efforts by identifying for their clients other useful professionals with Historic Rehab Incentive experience.

Compensation. Compensation will depend on exactly what services are being provided and a wide range of possibilities exists from hourly rates, to lump sum (or a combination of the two), or even a percentage of the benefits might be considered. How architects are compensated for their services should be analyzed with the same considerations as their other services.

Professional Liability. Obviously, new services entail new evaluations of risk versus benefit. Not all professional liability policies will expressly cover the services described in this article, so architects should thoroughly discuss liability coverage with their risk managers, insurance carriers and attorneys. As with any other services, much of the risk and potential liability can be reduced through proper contract drafting and ensuring that contracts contain – to the extent permitted by law – express limitations of liability, a disclaimer of representations or guarantees of the value of the benefits or success in obtaining them, acknowledgement by the client that no results are guaranteed, and other provisions that limit an architect’s risk for outcomes that are often beyond their control.

5. Conclusion

For architects unfamiliar with historic preservation, there may be a bit of learning curve in mastering the services discussed in this article. For others with experience working on historic properties, it’s probably more of a retooling of skills, rather than an overhauling. But historic preservation is not a difficult subject to master and architects who are already guiding the rehabilitation of historic projects are already knowledgeable about the details and information needed to help owners improve the financial performance of their projects.

Plus, working on historic buildings can be just plain fun.

About the author:

Gary L. Cole AIA, ALA, Esq. is Chicago-based Illinois and Florida-licensed architect and attorney and an expert in historic rehabilitation, preservation law and development financial incentives. He was a Historical Architect for the Illinois Historic Preservation Agency, a Visiting Associate Professor of Architecture at the University of Illinois Graduate School of Architecture and, as an attorney, has represented clients in preservation-related matters in Chicago, South Florida and Washington, D.C. He has worked for two of Chicago’s largest law firms and was in-house counsel for one of the Southeast’s largest retail developers. He practices design & construction, real estate, preservation and accessibility law and is a Certified Mediator and a member of the Roster of Neutrals for the American Arbitration Association. He can be contacted by email at garycole@lawarkbuilding.com.

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