R.R. Smith Center for History and Art: Forging a Partnership
Virginia | By Joe Pettiford and Erica Stewart. Used with permission from Main Street News, the monthly journal of the National Trust`s National Main Street Center (no. 211/Oct. 2004). | Posted: 10/08/2004
The R.R. Smith Center for History and Art project in Staunton, Virginia can be credited with helping forge the partnership that lead to the National Trust Small Deal Fund. The project, to rehabilitate the former Eakleton Hotel in this Virginia Main Street community’s historic downtown into an art museum and local archives, falls outside of the investment guidelines of the Trust’s Banc of America Historic Tax Credit Fund. The Fund’s staff forwarded the project to Tax Credit Capital in hopes that the Small Deal Fund could syndicate the deal. Indeed, its standard underwriting terms and the flexibility of its investor enabled the SDF to make a tax credit equity investment where the Banc of America Historic Tax Credit Fund could not. A partnership was soon formed, whereby Tax Credit Capital gains another feeder source for the SDF pipeline and smaller-sized, Main Street-scale historic rehabilitation projects gain access to important tax credit equity that would otherwise be unavailable to them.
For three non-profit organizations in Staunton, Virginia, the Small Deal Fund’s tax credit financing is helping to make their dream come true. When Staunton was settled in 1747, it was but a mere outpost within the vast expanse known as Augusta County, which at the time bordered the Mississippi River. The town’s prominence rose markedly in the late 19th century, however, due to its position along several transportation routes and in time, its major railroad depot. Grand homes and a bustling downtown came to define Staunton, earning it the nickname, “Queen City on the Great Wagon Road between the Blue Ridge and the Alleghenies”. For the better part of three centuries, Staunton also enjoyed distinction as a crossroads for noted artisans and artists including John Sheets, the riflemaker; Caleb Bingham, the painter; Grandma Moses, the folk artist and T.J. Collins, the architect. All would leave behind a rich and varied legacy unique for a community of its size. Collins in particular made a lasting impression, designing more than one thousand public and private buildings in the area—one of which is the Eakleton Hotel.
Like many downtowns across the county, when the railroad declined, so did Staunton. The city suffered a further blow when interstate highway travel bypassed Staunton and commercial development flocked to the suburbs. The once stately facades in the central Beverley Street district lost their luster and downtown was reduced to a shell of its former self. Preservation ordinances were unheard of, allowing the wrecking ball to inflict further damages on the city. The urban renewal strategy of the 1960s laid waste to fifty of Staunton’s historic buildings before concerned citizens rallied in 1971 to form the Historic Staunton Foundation. Today, the Foundation is one of three non-profit organizations determined to see that Staunton doesn’t lose another monument to its glorious past, or its connection to its arts heritage. In 1998, the Staunton-Augusta History and Arts Alliance purchased the Eakleton Hotel intent on rescuing the 1895 property from neglect and on finding a home for the county’s rich history and arts record.
To this end, the Alliance has undertaken a $2.5 million rehabilitation project that restores the luster to this once-grand structure (which was most recently used as a furniture store) and creates the R.R. Smith Center for History and Art, a climate-controlled archival and educational facility will serve the arts, history, culture, tourism and economic development opportunities in the community. The Augusta County Historical Society will house its collection of manuscripts, photographs and architectural drawings by Collin and Son, one of the premier collections of its kind in the county within its walls; on-site research facilities will provide public access to previously unavailable materials through its Local and Family History Library; the Preservation Resource Center will offer education, advocacy and technical support to architectural preservation, and adult and children’s classes will be held on varied subjects including drawing, painting, pottery and other arts. The Center will also provide office space for each of the three organizations in addition to shared conference space, a catering kitchen, lecture hall and a gift shop.
Support for this project has been drawn from several key sources, including $710,000 in federal tax credit equity from the National Trust Small Deal Fund and $625,000 in state tax credit equity from the Virginia Historic Tax Credit Fund (also managed by Tax Credit capital. Eighty-five percent of the federal tax credit equity will be paid once the project receives Part 3 (final) approval from the National Park Service, with the remainder paid in at six months of break-even or better operations (the state tax credit equity amount will be paid in one lump sum). Other sources include grant funding from the City of Staunton, TEA-21, CDBG and HUD and approximately $250,000 in-kind donations and $880,000 in pledge contributions. Phase I of the project, the exterior work was completed in 2002 and Phase II, the interior work is set to commence in the fall of 2004 and finish in late winter of 2005.
R.R. Smith Center for History and Art-by the numbers
|Total Development Cost||$4,314,304|
|Qualified Rehabilitation Expenditures||$4,029,304|
|Federal Tax Credits||20%||$805,861|
|Percentage to Small Deal Fund||99.99%||$805,780|
|Federal Tax Credit Equity per $1 of credits||$0.88||$709,086|
|Installments as Follows:|
|6 Months Breakeven Operations||15%||$106,363|
|Buy Out Price (after Year 5)||15%||($106,363)|
|State Tax Credits||25%||$1,007,326|
|% to Small Deal Fund||100%||$1,007,326|
|State Tax Credit Equity per $1 of credits||$0.62||$624,542|
For more information contact:
Small Deal Fund
National Trust Community Investment Corp. (NTCIC)