Mill revivals could choke on their own success
The once-bustling Roosevelt Mills stood idle for more than a decade in the Rockville section of Vernon, a symbol of past glory and present decline. But no more. The former sweater mill reopened at the end of last year after an extensive and elegant rehabilitation, with commercial space on the first floor and 68 apartments on the upper four floors. The apartments were all rented by Aug. 1, said co-developer Marc Levine.
Mayor Dan Champagne said the 1906 mill — like other old mills in town — was a run-down eyesore that was inhibiting development. “Now it looks beautiful; we’ve gotten nothing but compliments on it.”
The town, which is 13 miles east of Hartford, has three more mill rehabilitation projects in the pipeline. So do quite a few other communities, from Norwich to Cheshire, Windsor Locks to Bridgeport.
Such is the interest in revitalizing historic industrial properties that the movement could be stalled by its own success. All of the fiscal 2017 tax credits under the state historic rehabilitation tax credit program, a key part of the financing of many mill projects, were claimed by September, in the first quarter of the fiscal year.
This caught state officials by surprise — the fiscal 2016 credits weren’t claimed until April of this year — and has them scrambling to find ways to keep projects moving. “The last thing we want to do is lose the momentum,” said Julie Carmelich, who administers the tax credit program for the State Historic Preservation Office, part of the Department of Economic and Community Development.
It would be a shame to lose the momentum, advocates say, because saving and repurposing mills not only preserves major historical sites, it drives smart growth, cleans the environment, provides needed housing options and otherwise stimulates the economy. “The state has a great thing going here,” said Hartford architect Bill Crosskey, who has worked on a number of mill projects.
A new survey about to be released by the Connecticut Trust for Historic Preservation indicates there are a few hundred vacant or underutilized pre-1965 mill buildings ripe for rehab — if the financing can be secured.
Connecticut’s mills and factories built the state’s wealth and are part of the fabric of most communities. Mills were built along moving water until the early- to mid-19th century, when steam power allowed them to be in cities, along newly built rail lines.
Many became the hub of industrial villages, surrounded by housing, parks, theaters and other amenities. Some of these cathedrals of commerce were huge; for example, the main building of the Ponemah Mills in the Taftville section of Norwich, where a restoration has begun, is 750 feet long. Cities became known for their main products: Danbury was the Hat City, Manchester the Silk City; Willimantic (part of Windham) the Thread City, etc.
To skim over sometimes-difficult working conditions and periods of labor unrest, Connecticut’s mills and factories hummed along, spinning off new businesses, attracting major immigrant groups to work the looms and lathes, making a vast array of products, pretty much through the end of World War II.
Then mills began to close, because of automation, obsolescence, competition, cheaper labor in the South or overseas, changing economic times. And many cities and towns were left with empty mill buildings. Some mills found new uses, some were demolished, some were lost to (often spectacular) fires; many just sat empty, targets for graffiti and broken windows, the indignity of neglect.
Gradually, public officials and developers began to see more potential in the old structures. The 1980s saw a few major rehabilitation projects in the state, such as housing in the former Bigelow-Sanford carpet mill in Enfield and most of the former Cheney Bros. silk mills in Manchester, as well as the Science Park business incubator space in part of the former Winchester Repeating Arms plant in New Haven (which is now gaining a residential component).
In the next decade came a few more major projects, including perhaps the best known mill project in the state, the renovation of Coltsville, Samuel Colt’s industrial village in Hartford’s South Meadows. After a 20-year grind, it today is a successful mix of residences, businesses and schools, and a National Park.
Mill restoration kicked into a higher gear in 2007 with the creation of the Connecticut historic rehabilitation tax credit program – tax credits are syndicated to investors to reduce their tax liability and in return produce equity for a project. The program has been refined over several years and in its present form for the past two and a quarter fiscal years. In that 27-month period the state has granted historic tax credits to 54 projects – 17 mill or factory restorations, and the rest for schools, commercial, and multi-family structures (there is a separate tax credit program for smaller historic homes).
The state historic tax credit and more than a half dozen other local, state and federal incentives are the sine qua non of many major mill restorations. The projects are invariably complicated and hence expensive. There are almost always environmental challenges, plus a host of building and fire code issues. Developers often need several layers of public and private investment to complete a project, a reality that has given rise to the term “lasagna funding.”
Without the incentives “many of the buildings wouldn’t be touched,” said Hartford developer Jim Carter, who, with the Konover Cos., renovated The Dye House, the last of the large Cheney Mills buildings, in 2011.
Carter said as projects are completed, developers and investors are gaining experience in mill restoration. The work takes, as he put it, expertise and deep pockets. Some larger projects, such as Coltsville, have needed more than one developer to get across the finish line; a couple of others, notably the former Collins Company axe factory in the eponymous Collinsville section of Canton and the Gilbert & Bennett wire mill in Redding, are still languishing after years of effort.
In addition to the historic tax credits, the state has promoted mill restoration in several other ways. Since 2011 the Malloy administration has invested more than $1 billion in affordable housing, said Department of Housing spokesman Dan Arsenault, part of which has gone to former mill or factory sites.
Also, the state has invested $172 million in brownfield cleanup, which has allowed the environmental remediation of more than 100 sites, said DECD deputy commissioner Timothy Sullivan.
State environmental policy used to block state funding for sites in floodplains — somewhat ironic in that older mills were purposely located along waterways. But several years ago the state created a public-interest exception, which would allow grants to projects in flood plains if they met goals such as brownfield cleanup, said Department of Energy and Environmental Protection spokesman Dennis Schain. Projects still have to meet safety and resiliency standards, which often means giving up the first floor for residential use.
Finally, according to developers, town officials and preservationists, the various state agencies involved are working well together. “The cross-linking is exceptional,” said Daniel Mackay, executive director of the CT Trust. “Connecticut is supposed to not be business friendly, but in this area at least, it is very business friendly,” said Crosskey.
Another factor driving mill rehabilitation is a shift in the real estate market. Many mills are in places — walkable town centers, on waterways, near transit — where people, especially downsizing Boomers and Millennials in no hurry to buy a home, want to be. And, mills often offer desirable features such as high ceilings, exposed brick, hardwood floors —“some of the most appealing urban living space imaginable,” said Michael W. Freimuth, executive director of the Capital Region Development Authority, which currently is supporting the restoration of two former factory structures in Hartford, the former Hartford Office Supply and Capewell Horse Nail buildings.
Finally, there is a growing sense of urgency among many town officials to renovate mills before they are lost. “Time is of the essence,” said John Simone, executive director of CT Main Street Center, who works with municipalities to revitalize their downtowns. Carter said the roof of the Dye House was about to go and wouldn’t have survived another winter had the handsome building not been rehabilitated. (The Cheney complex now has 870 apartments.)
The CT Trust is about to publish “Making Places,” a two-year, state-funded inventory of mills, factories and related villages constructed from the beginning of Connecticut’s industrial revolution in the early nineteenth century until 1965. The survey is intended to be both a historic resource and an economic development tool.
Staffers have identified about 1,400 historic industrial buildings in the state, in various states of repair. About 200 are already listed on the State or National Registers of Historic Places, either individually or as part of historic districts. The study produced a list of another 400 architecturally or historically significant buildings that are potentially eligible for listing on the state register, the first step in qualifying for historic tax credits.
Some of those will be listed for their historic value, but about half are vacant or underutilized, hence “developable,” said Renee Tribert of the Trust.
Advocates see two immediate challenges in getting them developed. The first concerns the type of building. Many of the incentives to reuse mills are for housing. Mayor Champagne of Vernon and others would like to see more help for commercial renovation.
Some major commercial mill projects, such as American Woolen Co.’s purchase and reopening of the former Warren Mill in Stafford Springs in 2014, can get state economic grants and loans. The problem is with what are sometimes called mixed-use mills, or MUMs. These tend to be smaller structures with no housing component, owned by local entrepreneurs who typically don’t have the money for the “substantial rehabilitation” to qualify for tax credits. So they develop the property incrementally, in fits and starts, as they are able.
Towns like MUMs because they generate jobs, offering low-cost, flexible space for small or start-up businesses. For example, the Hilliard Mills in Manchester, a historic woolen mill site, was bought a decade ago by a young engineer named Peter Bonzani Jr. with some investors.
He has renovated the three largest buildings on the six-building, five-acre site, struggled to get through the recession, and now has 30 small-business tenants — everything from a catering company and an insurance agency to a piano business and a counselor — who employ about 50 people.
“It’s not a get-rich-quick scheme,” he understated. A recent small grant from the CT Trust to examine the structural integrity of the oldest building on his campus is the first assistance he has received. There are similar mills in a bunch of towns, in various stages of repair and reuse, and preservationist think some kind of assistance could get them developed and on tax rolls more quickly.
The more immediate concern is the state historic tax credit. The credits cover 25 percent of “total qualified rehabilitation expenditures” up to $4.5 million per project. There is a cap of $31.7 million a year. “They’ve saved a lot of great buildings,” said Carmelich. But if no more credits become available until next July, projects to save other great buildings will be stalled.
Advocates want to raise the cap. Lest there be any confusion about that, there was a panel titled “Raise the Cap!” at the 2016 preservation conference run by Connecticut Preservation Action, the lobbying arm of the preservation movement, on Oct. 7.
Crosskey and some others think there is enough potential development to merit a cap of $64 million, slightly more than double the present limit. In a difficult budget climate, it probably will be a tough sell at the General Assembly.
Proponents can argue for the historical importance of mills and factories. But their strongest point, Crosskey suggests, is their economic development potential. There is research to support this position. For example, according to Carmelich, the $95.1 million in tax credits issued in the past three fiscal years has generated $432 million in construction spending alone. A 2007 study of 277 active and completed historic rehabilitation projects in Rhode Island by the firm Lipman, Frizzell & Mitchell LLC estimated that every $1 Rhode Island invested in historic tax credits leveraged $5.35 in total economic activity. There are similar studies from Virginia, Missouri, North Carolina and other states with similar findings.
This is the argument preservationists will have to make. “People may not fully appreciate the economic impact” of rehabilitated mill and factory buildings, said Freimuth. The buildings produce “much more bang for the buck than people think.”
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