Owners of buildings along Monterey who upgrade could earn
deductions
Gilroy – Historical preservationists hope to save downtown buildings from the wrecking ball by enticing owners with the prospect of thousands of dollars in tax credits.
Under a proposed National Register historic district, owners of buildings along Monterey Street who choose to upgrade rather than destroy a building could earn tax deductions for as much as 20 percent of improvement costs.
Precise boundaries for the district have not been proposed but they could include Monterey Street between Fourth and Seventh streets. The corridor would be a logical fit for the National Register of Historic Places since city planning documents already designate the area as a historic district, said Connie Rogers, a member of the Gilroy Historical Society and the city’s Historic Heritage Commission.
“It’s a lot of responsibility to own any building and it’s even more so to own a historic building,” Rogers said. “Quite a few people think our historic buildings are worth saving. That’s why the federal government and state government and the county and city have a few programs designed to help owners of historic buildings make it worth their while to save their buildings.”
The push for a downtown historic district has gone on for more than a decade, but it could gain traction in coming months as the city begins a three-year crackdown on owners of unreinforced masonry buildings. Officials are setting a three-year deadline for owners to rehabilitate or tear down buildings that could crumble in an earthquake. Owners who fail to comply face condemnation of their buildings and tens of thousands of dollars in fines.
More than half of the 40 buildings designated as earthquake hazards would qualify for tax credits under a National Register historic district. The tax breaks would also be available to “contributing buildings,” structures that are not architecturally or historically significant but tie into the district’s overall historic theme. In Gilroy, that theme would likely center on the area’s past as a commercial hub.
“I think the city would facilitate applying for this National Register status if they felt enough people were interested,” Rogers said. “The city doesn’t want to ram this down anybody’s throat.”
Steve Ashford, a downtown building owner, doubted the tax credit program would provide incentive for the vast majority of downtown building owners, who have held their property for decades and already pay little in taxes. But he supported the program as a way to help preserve important buildings such as the Strand Theater or Dick Bruhn’s clothing store.
“Let’s save the old buildings. Let’s keep the look of downtown,” Ashford said. “One thing I hate to hear is that we should make it look like Palo Alto or Willow Glen. If I wanted it to look like Willow Glen, I’d move there. Let’s make it look like Gilroy.”
Owners seeking to take advantage of tax credits under the National Register program would have to follow federal historic preservation guidelines and continue using the building as a storefront or some other income-generating purpose for at least five years. To qualify for tax breaks, rehabilitation costs must exceed the original purchase price.
Property owners can qualify for smaller tax breaks under the Mills Act, a state law, and a federal preservation program for buildings constructed before 1936.
