Preservation Tax Credit Projects Enhance Texas’ Historic Courthouse Communities

By Andy Rhodes, Managing Editor, The Medallion

While exploring the Lone Star State’s historic downtowns, many travelers are understandably drawn to the architectural beacons of courthouse towers. Some visitors may continue strolling throughout a historic business district in search of cafes and boutiques without noticing the buildings in between.

Even fewer will realize that many of these historic structures on courthouse squares, housing private companies or nonprofit organizations, were preserved and enhanced thanks to tax credits.

In Stephenville, the 1889 First National Bank building—the town’s first financial institution—sits adjacent to the downtown Erath County Courthouse, restored in 2002 through the THC’s Texas Historic Courthouse Preservation Program.

Nearly 15 years later, local developers initiated a comprehensive but conservative rehabilitation of the property, including restoration and repair of interior historic elements, exterior stone masonry, and the decorative copper turret roof.

The original raised plaster frieze—a broad horizontal band of sculpted or painted decoration—was discovered above a dropped ceiling, although it was crumbling and partially removed. As a crowning touch, the owners restored a section of the plaster frieze and used decorative painting techniques to interpret its missing portions.

In Mount Vernon, the 1916 M.L. Edwards & Co. Building is prominently located near the restored Franklin County Courthouse. The building is an excellent example of an early 20th century commercial structure, but is most notable for having been owned by members of the Edwards family for 100 years. The building was constructed by M.L. Edwards after his general store outgrew its smaller building. The new building provided him the opportunity to expand retail offerings and add an undertaker service on the second floor.

Tax credit assistance allowed the new owners to reimagine the building as a retail shop, restaurant, and events venue. They removed a non-historic storefront from the 1980s and restored the original storefront, which features transom windows painted to advertise wares. Inside the building, the expansive tin ceiling was selectively repaired, and a new lift was added to make the second floor accessible. The original freight elevator that carried coffins to the second floor was also restored.

The Texas Historical Commission’s Preservation Tax Credit Program administers the Texas Historic Preservation Tax Credit and the Federal Historic Preservation Tax Credit. The federal program has been in existence since 1976, while the state program was established by the Texas Legislature in 2013 and officially went into effect in January 2015.

The federal program provides a credit on federal income taxes equal to 20 percent of qualified project expenses for rehabilitating a historic building used for income-producing purposes, while the state program provides a credit equal to 25 percent of qualified project expenses for the rehabilitation of a historic building used for income-producing purposes. Projects must be certified, and there are requirements for historic designations that vary between the federal and state programs.

Many projects that utilize both historic tax credit programs are large, but developers are increasingly using the programs to revitalize small-scale buildings on courthouse squares and in Texas Main Street cities.