Endangered Properties Revolving Fund Program
The Georgia Trust for Historic Preservation established its Revolving Fund program in 1990 to provide effective alternatives to the demolition or neglect of architecturally and historically significant properties by promoting their rehabilitation and monitoring their preservation in perpetuity. The Revolving Fund accomplishes this goal by either accepting property donations or by purchasing options on endangered historic properties. The properties are then marketed nationally to locate buyers who agree to preserve and maintain the structures. Protective covenants, in the form of a preservation easement, are attached to the deeds to ensure that the historic integrity of each property is retained. Purchasers are required to sign rehabilitation agreements based on the work to be performed on the structure.
The Revolving Fund Program Committee of the Board of Trustees of the Georgia Trust selects properties for the program based on the following criteria:
- Endangered: the property is threatened by development, demolition, or vacancy.
- Significant: the property is either listed or is eligible for listing in the National Register of Historic Places.
- Obtainable: the property’s current owner is willing to sell or donate the property to the Revolving Fund Program.
- Marketable: can a sympathetic buyer realistically be located for the property? Building type, condition, location and price are considered.
- Locally supported: the project needs the support of local government and community groups who are willing to help market and safeguard the property.
After approving a prospective property for participation, the Trust can acquire it by donation or bargain sale, by an option to purchase, or by a purchase in fee simple.
- Donations & Bargain Sales (sales of real estate to a non-profit organization at less than fair market value): these methods not only ensure that threatened historic properties are preserved, they also provide much-needed capital to the Revolving Fund Program. In addition, property donors and individuals who convey property by bargain sale to a non-profit are eligible for tax deductions.
- Options: if the owner is interested in selling a property, the Trust seeks to acquire an option to purchase it. An option is obtained for a normal fee and gives the Trust exclusive right to purchase the property during a specified period of time at an established price. This method assures the owner that the Trust will work to locate a qualified buyer who will agree to preserve the property for future generations.
- Fee simple purchase: such outright purchase of a property is done only in rare circumstances. Property ownership ties up the Revolving Fund Program’s capital and may limit the Fund’s ability to participate in other pressing projects.
The Georgia Trust markets its Revolving Fund properties in publications and on websites which cater to the preservation-minded. In this manner, the Trust provides a unique service by matching threatened historic structures with interested and qualified buyers.
When making an offer, prospective purchasers must submit the following information to be reviewed by the Revolving Fund Committee: a statement describing the proposed use of the property, a scope of work for completion of the rehabilitation and a statement affirming willingness to agree to Reserved Conservation Easement and Preservation Agreement, a resume and/or list of projects that the purchaser and/or contractor have been involved with to reflect the purchaser’s qualifications and prior experience with historic buildings, and supporting documents from a bank (financial statement and construction loan commitment with their offer to insure that purchaser has the necessary funds to purchase and complete all necessary rehabilitation.
To ensure proper preservation and maintenance of properties sold through the Revolving Fund Program, the Trust attaches protective covenants to the deed. If rehabilitation is required, the purchaser must sign a rehabilitation agreement that identifies all work work to be undertaken. Purchasers are not asked to perform museum-quality restorations, but are obliged to follow the Secretary of the Interior’s Standards for Rehabilitation. Both the protective covenants and the rehabilitation measures will be monitored by the Trust.
The Georgia Trust also accepts the donation of preservation easements from owners who are concerned about the future of their historic property. The Georgia Trust annually monitors these easements in perpetuity, ensuring the preservation of these properties for future generations.
The Trust does not offer grant money or special financing for rehabilitation projects. However, tax credit incentives are available through the federal government for structures rehabilitated for income-producing purposes. For income-producing properties (commercial and residential rentals), substantial rehabilitation work may qualify for federal and state tax incentives. For homeowners, the state tax credit and tax abatement programs may apply. Additionally, gifts of historic properties and the donation of conservation easements are tax-deductible.
While the Fund is not designed to be income-producing, any advertising or stabilization costs, up to an agreed-upon amount, are reimbursed by the seller at the time of sale. Any proceeds from the sale are returned to the fund, thereby “revolving” the use of the initial capital.
Every property sold through The Georgia Trust’s Revolving Fund Program is conveyed with a conservation easement in place. An easement is a partial interest in real property that is carried as a deed restriction that “runs with the land”; it is permanent. Unless specifically stated, the conservation easements reserved by The Georgia Trust pertain to the exterior of the property and its grounds. The easement is designed to protect against inconsistent or incompatible alteration of the the property.
The Georgia Trust also accepts conservation easements on historic properties by donation. Property owners may donate an easement to a qualified non-profit easement holder (such as The Georgia Trust) in order to protect important open spaces, building facades, and sometimes, interiors. In granting the easement, a specific set of rights are transferred which are designed to protect against inconsistent or incompatible alteration of a property. The Georgia Trust monitors these easements in perpetuity, ensuring preservation of the property for the next generation.
By donating an easement to a nonprofit charitable organization like The Georgia Trust, the property owner may be qualified to take a tax deduction for the value of the donated easement.
Individuals who purchase properties through the Revolving Fund Program are required to sign a rehabilitation agreement which defines the guidelines of rehabilitation to be undertaken and establishes a rehabilitation schedule for phases of work. Deadlines for the rehabilitation schedule are set by the purchaser after consultation with Georgia Trust staff, with all work being completed in about two years. The rehabilitation agreement also requires that all work performed on the property follows the Secretary of the Interior’s Standards for Rehabilitation.
Rehabilitation Agreements insure that the historic property will be brought back to good condition and that its historic features will be preserved.
For more information, contact:
Ben Sutton, Historic Properties Coordinator
The Georgia Trust
1516 Peachtree Street, NW
Atlanta, Georgia 30309-2908