Neglecting Historic Commission Approvals for Windows Can Cost Tax Credits, Project Time

September 22, 2020

by Joe Zaino

For many developers, adapting historically significant buildings for office, multifamily and retail uses has proven to be a way to reduce construction costs, build sustainably, and in some cases, receive government tax credits that make redevelopment projects economically viable.

While preservationists from small town historical commissions to the National Park Service (NPS) are generally eager to see these structures renovated, coming into compliance with historic requirements can present a myriad of challenges for developers. One of these challenges is replacing old windows in a cost-effective manner that doesn’t alter the historic character of the building. While many historical commissions have become more broad-minded in the approval process and now consider factors such as energy efficiency, developers should never take the window approval process for granted.

“Windows have always been an issue with the historic tax credit programs,” says Albert Rex, partner and CEO at MacRostie Historic Advisors, LLC, a national historic tax credit consulting firm. “Some developers underestimate the exacting standards of the historical commissions and then run into trouble, especially when using standard size windows from major manufacturers rather than the custom solution provided by historic window specialists.”

Fifteen or twenty years ago, says Rex, a full photographic survey of the interior and photos of windows was often required, with a companion document detailing the condition of each window and why it had to be replaced – which made for a time-consuming process. “Historical commissions have since shifted their focus to whether or not the replacement windows closely match the existing windows, which became easier as manufacturers created better aluminum replacement windows,” says Rex.

Currently, Federal and State Historic Tax Credit programs provide up to 20 percent tax credits to property owners who renovate a historic building for a commercial, industrial, or income-producing residential use while maintaining its historic character – which can represent substantial cost savings and make or break a project’s financial feasibility. Not all developers of historic renovation projects will seek tax credits however, usually citing the financial burden or logistical difficulties of complying with the stringent requirements, but that doesn’t mean that some projects aren’t also subject to approval by local historical commissions. Buildings located in locally-designated historic districts still need approval – and window replacements are often a major point of contention.

Historic consultants say it is not uncommon for developers to either lose vital tax credits or have building permits denied for failing to accurately match the replacement windows to meet the guidelines of the historical commissions – which is why they stress getting mockups of each window type and submitting window shop drawings for review and approval prior to beginning construction on the project.

“Based on recent experiences, we think it’s a best practice to always have a window mockup to ensure that everyone on the development team is on the same page, and that it gets approval before the contractor orders all of the windows, because it’s such a high price point for the project,” emphasizes Maureen Cavanaugh, Senior Planner at The Public Archaeology Laboratory, Inc. (PAL). “When projects fail to gain the required approvals, it’s often the result of poor communication between the design and construction teams and ownership, often due to having too many balls in the air and just dropping this one.”

For tax credits, the windows must first be reviewed by the state historic preservation office (SHPO), then reviewed by the NPS, which requires that the replacement windows and panning are as closely matched to the originals as possible (using historic photos or original plans), although aluminum products are often allowed in place of wood for cost and durability reasons. But gaining approvals for windows is far from an exact science. “Design standards and criteria can be open to interpretation from state to state, so it’s crucial to understand what is ‘approvable’ and why,” says Cavanaugh.

Historic consultants emphasize the importance of having initial applications fully document both the existing sash and the proposed replacement, with every piece of the windows annotated and dimensions clearly labeled, and it is imperative that the proposed windows match as closely as possible to the size and the profiles of the existing windows. The NPS and SHPO will often require a mockup, but it is something that every developer should always do before purchasing replacement windows to ensure that the project will gain approval of the governing agencies. Windows, particularly for former industrial buildings with hundreds of large openings, constitute a high price point for a project. Many a developer has foregone the process, and paid a steep price in terms of lost tax credits or having to re-order windows to comply with agency requirements.

The biggest issue, according to Rex, is the lead time, because time really is money for a real estate developer. “Often the problem is that developers don’t leave enough cushion within their project to go through the submittal of a window shop drawing, get comments from the SHPO, forwarding those to NPS, correcting the windows, getting comments back again, and then correcting the windows as need be.” Typically the process can take 90-120 days, with an 8-12 week lead time (or greater) for windows to be delivered.

Rex says developers should start thinking about windows “almost the day you start doing the project, because you really need a solid six or seven months to be confident that you will have the necessary approvals and that the window can be manufactured. It’s a design/approve/build” process – not a design/build process.”

Steve Wessling, founder and CEO of Wessling Architects, which specializes in historic restoration, says that many of the neighborhoods in Boston (particularly Fort Point Channel, Beacon Hill and Back Bay) have written guidelines for renovations which have to be followed even if you’re not going for tax credits, adding that some neighborhood historic district commission are more rigid than others.

He recommends that any developer considering adaptive re-use of a historic building begin the process by hiring a historic consultant to guide them through the process, preferably one with a background in the presiding jurisdiction.  “If you’re considering going for the tax credit, or if you’re in an historic district – especially in Greater Boston or many of the New England states – you really need a consultant,” says Wessling. “They really know the process and can keep you from stumbling.”

(Joe Zaino is a sales manager for Universal Window and Door, which has provided windows for over 100 buildings listed on the NPS National Register of Historic Places)