Today, Craddock’s architecture firm, Craddock-Cunningham, operates out of an 1899 former Anheuser-Busch bottling plant situated on Jackson Street in downtown Lynchburg. The evocative vista from the firm’s windows extends over well-worn railroad tracks and to the James River just a few yards beyond. But there are more advantages to his location than just good views. Restoring his design firm’s two-story, 4,000-square-foot building was economically feasible because of historic preservation tax credits. "We probably wouldn’t have done it if it hadn’t been for them," he says.

Statewide and nationally, while commerce is now conducted electronically — and canal boats have become dinosaurs — recycled buildings are increasingly making the transition from industrial to post-industrial use. And spurred by a burgeoning economy, low vacancy rates, companies seeking flexible work spaces and both state and federal historic preservation tax credit programs, many of Virginia’s land-locked urban centers are being renewed with recycled buildings that provide handsomely textured and highly expandable commercial, corporate or living spaces.

In Richmond, employees and management at Experient Technologies, a software development company, were committed to expanding their growing company at a distinctive, downtown location. The solution was moving to a former warehouse building at 10 South Sixth Street. Experient is typical of many small-to-medium-sized high-tech companies that consider unique office space a means of attracting employees and differentiating themselves from the next dot-com.

In 1983, Peg DeMallie and W. Douglas Gilpin converted a downtoewn Charlottesville warehouse into what's now the South Street Brewery. Photo by Mark Rhodes

The state’s historic preservation tax credit program, which was enacted in 1997, allows a tax credit of 25 cents for every $1 investment in a qualified project. Add to this a 20 percent tax credit on buildings that qualify for federal programs (available since 1976), and developers potentially can receive a 45 percent tax credit on every dollar spent. The program has special appeal to large investors, or syndicates made up of investment pools. During strong economies, businesses are looking increasingly for investments with tax advantages. Traditionally, the affordable housing market was a primary area where investors could find tax advantages, but Virginia’s preservation tax credit program offers additional opportunities.

Virginia is one of only 11 states that offer historic preservation tax credits. The program has attracted numerous out-of-state investors looking for projects solely for the benefit of the tax credits. Obviously, a rich stock of historic or potentially historic buildings is essential. But Daniel Gecker, a lawyer with the Richmond law firm of Kutak Rock who specializes in historic preservation tax credit projects, says two other factors have contributed to the success of Virginia’s tax credit program. "The first is that we have a very active preservation community, and the second is the flexibility that was built into the program. The Virginia program is very flexible." In Virginia, unlike other states, tax credits can be sold to other parties.

Tax credits are a good deal, says Gecker. "There is no reason why a good-sized company shouldn’t be interested in this, either directly or in pools," he says "The benefit comes on day one." Among projects in which Gecker has been involved, tax credits were critical to financing Petersburg’s Appomattox Regional Governor’s School for the Arts and Technology. The once-derelict, but physically sound and architecturally imposing former Petersburg High School on South Washington Street was restored and is bursting with activity. Its renaissance has also spurred residential restorations in the immediate neighborhood. It’s been a win-win situation. An economically-challenged city gets a educational showcase, surrounding houses are restored as an indirect result and investors reap tax benefits.

This former telephone warehouse near Pentagon City in Arlington County is now a shopping center.

The project was also the first in Virginia to use preservation tax credits for financing school construction. Noting its success, conversion of Richmond’s former Maggie L. Walker High School in central Richmond for the Governor’s School for Government and International Studies is also being financed in part by preservation tax credits. There, tax credits are financing a third of the $20 million cost of the project. Completion is slated for fall.

For decades from the mid-to-late 20th century, preservationists were wringing their hands at decline of downtowns and the loss of old buildings. But the tax credit program has turned things around dramatically.

In Lynchburg, the Craddock-Cunningham architecture firm is working on numerous adaptive reuse projects in Lynchburg. These include the Courtland Apartments, where a dowager of a building is being converted into a rehabilitation center; Artspace, a 36-unit apartment house for local artists; and the BluffWalk Center, a hotel, restaurant, theater and retail development overlooking the James River. The firm also is involved in restoring the city’s landmark Academy of Music, a former downtown opera house. It will be updated for 21st century performances and audiences.

In Charlottesville, architects W. Douglas Gilpin and Peg DeMallie in 1983 were involved in converting a downtown warehouse into what is now the South Street Brewery, using federal tax credits. Their firm, Dalgliesh, Eichman, Gilpin & Paxton, is currently working on renovations of University of Virginia fraternity and sorority houses and an apartment house using tax credits.

Gilpin, however, says sometimes developers, particularly of modest-sized projects, don’t jump to use the tax abatement programs: "They don’t want to go through the regulations and do the accounting." Butch Ball, a Richmond developer who has converted the 1920s era former William Byrd Hotel into apartments says that the program "is a maze. But to tear things down doesn’t make any sense." Adds Gilpin: "If you play the game, you get the tax credit."

Although many disagree, some have suggested that in certain places opportunities are becoming scarce. "We had a potential investor who had done a number of historic renovation projects call us looking for other investment opportunities in Richmond," says James M. Glave, a Richmond architect. His practice, The Glave Firm, has spearheaded historic preservation projects throughout Virginia and in North Carolina. "I told her there was nothing major left."

While this may be a stretch, the pace of rehabilitation activity in Richmond’s Shockoe Bottom district, hastened by the completion of a federally owned floodwall, has accelerated dramatically. There is discussion in Richmond of creating additional historic districts. And some say conversion of aging public buildings will provide the next wave of preservation opportunities.

In suburban Northern Virginia, while developers and investors don’t necessarily use tax credits, they have been looking at mid-20th century structures that wouldn’t necessarily catch the eye of traditional preservationists. In Arlington County, Morgan Gick Associates has converted a former telephone warehouse near Pentagon City into a shopping center.

In other places, older buildings still await rediscovery. "There is a tremendous stock of old buildings in Danville and Charlottesville crying out to be fixed up," says Craddock. "You can’t get there before the market," he warns, "You have to be cognizant of what the demand is." Staunton, he says, actually offers developers and investors help in filling out applications seeking historic status.

Increasingly, historic preservation as an effective development weapon is being used by cities that can no longer expand by annexing surrounding areas. And in an increasingly homogenized world, there are also the factors that can’t be priced. "All the shopping centers look the same and all the hotels look the same," says Craddock when discussing current development, "You could be in Lynchburg Mall and not know you’re in Lynchburg. We’ve given up our regional sense of place. We’ve lost our sense of identity. But if you look at these old cities, Danville is not like Charlottesville and Charlottesville is not like Lynchburg." What gives these places their identity is the collective, often older building stock.

Norfolk, since opening its Waterside Festival Marketplace in 1983, has been dogged in its efforts to establish a 24-hour a day downtown. While its MacArthur Center Mall has been gaining regional attention, residential development in adjacent historic neighborhoods has been moving on a parallel track. At The Heritage at Freemason Harbour and at Pierpointe, near the Elizabeth River, upscale apartments are now served by the Downtown Provision Co., a gourmet grocery store and Chocollage Bakery is scheduled to open soon.

As businesses move back into the center of cities, so do residents. The common denominator is the character that is hard to find in other places. "People come into our offices, see the big windows, the intricate brickwork and the big beams," says Craddock of his riverfront offices, "They say, ‘Wow!’"