Claremont
“I do love older buildings, so there is a personal side,” said Barrette, on a sunny warm morning a few weeks ago as he screwed mahogany boards into the steel frame of a handicap access ramp at the entrance.
“But from a business perspective, this made the most sense.”
In a couple of weeks, the Barrettes plan to move their screen printing and embroidering business, The Ink Factory, from a rented 1,800-square-foot storefront on Pleasant Street to the 12,000-square-foot, two-story brick building, using most of the first floor for the business and renting heated storage units on the second floor.
A sale price that was about a quarter of the building’s assessed value, potential rental income, and two tax incentive programs for historic structures combined to make the building the best option financially for the Barrettes.
Barrette advised anyone considering historic tax credits, especially a small business not flush with cash, to do their homework and hire professionals before spending a lot of money on a purchase. He relied heavily on the New Hampshire Division of Historical Resources and a preservation consultant from Reading, Mass., Lisa Mausolf, who wrote a historical assessment of the building.
The first and most important step is making sure the structure qualifies. Individually, none of the Water Street mill buildings, many of which date to the 19th century, are on the National Register of Historic Places, but the entire complex along Water Street was placed on the list in 1979.
“It needs to be of cultural or historical significance,” Barrette said.
“Because we have a historic district here, that made it a lot faster. Once you decide you are going to do it, you have to hire a consultant. We did a lot of preliminary investigation and I met with Peter Michaud (of the Division of Historical Resources) often. He was a tremendous help.”
The building at 13 Water St. was constructed as a boarding house for single textile workers with Monadnock Mills, one of the city’s major employers from the late 1800s to the 1930s.
Despite its age, and the fact that it was vacant for about 10 years, the building remains structurally sound with wood columns and flooring in excellent condition.
The Barrettes bought it in December for $28,000. They have qualified for federal historic tax credits and a local tax incentive program designed to encourage investment in historic buildings by delaying an increase in local property taxes after extensive renovations.
Mausolf’s historic preservation certification application gives a detailed description of the building’s physical appearance, its historical significance and its history, along with the history of the Monadnock Mills complex.
“The interior of the building retains integrity for the c. 1900 period,” Mausolf wrote. She also noted that it was once had three stories and in the early 1900s was changed from a boarding house to a manufacturing use.
“I was essentially a liaison between the Barrettes and the state,” Mausolf said.
As a preservation consultant, she identified which pieces of the building’s architecture had historical value and needed to be preserved and helped the Barrettes understand the standards for preservation.
The tricky part, Mausolf said, is retaining historical integrity while meeting modern needs, which can be challenging — especially in the area of energy use.
“It is a real give and take, but this project worked because Jeff really cared about the building,” Mausolf said.
“He has always wanted to respect the building’s historic quality and character.”
The Community Revitalization Tax Relief Incentive, established under state law, was adopted last year by the City Council. It freezes the pre-renovation assessed value of qualifying structures for up to seven years.
For the Barrettes, 13 Water St., will remain assessed at $112,300 for five years, thereby avoiding an immediate and steep increase in the building’s assessed value and corresponding property taxes after investing about $430,000 in the property.
That tax break was a necessity for the Barrettes, who told the council that unless it adopted the program, they would not be able to move forward with the project.
By comparison, Barrette said, other properties they looked at in Claremont with the right square footage were in the $300,000 to $400,000 range and carried a tax bill of between $12,000 and $15,000.
“That is not something we could afford right out of the gate,” he said.
At the current tax rate, annual property taxes on the mill building will be around $4,700.
“From an overhead perspective, it just made the most sense,” Barrette said. “Our overhead should be less than that other place (the current location) with three times the space.”
The second tax incentive program, federal historic preservation tax credits through the National Park Service, allows property owners to deduct 20 percent of qualifying expenses from their income taxes.
Barrette projects about $60,000 in tax credits on roughly $350,000 in qualifying expenses. He estimates they had about $35,000 in higher costs to renovate the building to National Park Service standards.
Adhering to the stringent standards of the National Park Service to preserve the building’s historical aspects and qualify for the tax credits took extra time and money, but Barrette said he is satisfied with the results and believes it will be worth it in the long run.
“I do think that completing the building to the Park Service standards makes for a better project,” Barrette said while talking on the building’s first floor, where workers were painting and finishing the walls. “They forced me to do things I wouldn’t have done, and at the end of the day I’m going to have a better building. They made me adjust trim on the windows, but that looks a thousand times better than what I was going to do.”
The historic tax credit program has been around since the mid-1970s and has helped adapt nearly 40,000 buildings for reuse with $109 billion in private investment, according to a 2014 report by the National Trust for Historic Preservation. “This tax incentive more than pays for itself,” the report said. “Over the life of the program, $21 billion in tax credits have generated more than $26.6 billion in federal tax revenue associated with historic rehabilitation projects.”
“The idea is to take underutilized historic buildings and renovate them and put them back into productive use,” said Elizabeth Muzzey, director of the Division of Historical Resources and New Hampshire’s state historic preservation officer.
Muzzey said the standards are high for a reason.
“It applies a high preservation standard in order to preserve a property’s most important historical attributes,” she said.
For the Barrettes’ property, the windows and insulation presented the costliest and most difficult challenges.
They budgeted $500 per window for the building’s roughly 50 windows. Later, they learned that to meet the preservation standards, the cost was closer $1,000.
“What I had planned was aluminum clad on the outside and wood on the inside, but they do not pass muster with the feds,” Barrette said.
New windows, constructed to preservation standards, were about $1,000 each and while eight of those were installed on a back wall, the Barrettes found a less expensive alternative for the other windows: sweat equity.
“That is why I rehabbed as many of the existing windows as I could instead of buying new windows because it was a cost issue,” he said. “Those are the original windows from 1840 and I spent all winter working on (them).”
Barrette took each window apart, stripped the wood, removed the glass and had it professionally cleaned, repainted the wood and then put them back together.
He wouldn’t hazard a guess as to how many hours that effort took.
“What is important to them (the federal government) is that the glass size and wood frame is all the same” as the original.
For the insulation, Barrette said, his plan to spray foam insulation on the historic brick walls did not meet preservation standards either. So, as with the windows, he had to find a different method to insulate the building.
Barrette said they built a wall of wooden studs, stapled a fabric that prevents the movement of air and water to the back of studs, put the wall in place, and then sprayed foam insulation against the fabric before putting up drywall.
“That was a fairly significant adjustment,” he said.
Even though the basement won’t be used, Barrette insulated it the same way.
The exterior brick was repointed and some brick on the gable roof section on one end was missing and had to be replaced. A small section of the back wall had severe water damage caused when a downspout broke and had to be rebuilt. A wooden addition on the back of the building was also renovated and will be used as a storeroom.
“It is almost as much as (what) we didn’t do,” Barrette said. “We tried not to touch what we didn’t have to,” such as the floor and wood columns.
Muzzey, of the Division of Historical Resources, said she has seen a “spillover effect” in other communities with the historic tax credits and noted that the Oscar Brown block on Opera House Square and the Common Man Inn on Water Street benefited from the program.
“One of the greatest things is, if one does it, others hear about it and get involved as well,” Muzzey said.
Barrette sees the renovation project as not only good for the business, but also good for Claremont.
“I really want Claremont to thrive and the more success we have here, the more success there will be for everybody around it.”
Patrick O’Grady can be reached at pogclmt@gmail.com.
