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 Title Page
 Federal disclaimer
 Table of Contents
 Executive summary
 Background to the analysis of the...
 Profile of and economic impacts...
 Profile of and direct economic...
 Profile of and economic impacts...
 Economic impact of operations of...
 Profile of and economic impacts...
 Comparative property values analysis--use...
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Group Title: Economic impacts of historic preservation in Florida
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Title: Technical report
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Table of Contents
    Front Cover
        Front Cover
    Title Page
        Page i
    Federal disclaimer
        Page ii
    Table of Contents
        Page iii
        Page iv
    Executive summary
        Page v
        Page vi
        Page vii
        Page viii
        Page ix
        Page x
        Page xi
        Page xii
        Page xiii
        Page xiv
        Page xv
        Page xvi
        Page xvii
        Page xviii
    Background to the analysis of the economic impacts of historic preservation
        Page I-1
        Page I-2
        Page I-3
        Page I-4
        Page I-5
        Page I-6
        Page I-7
        Page I-8
        Page I-9
    Profile of and economic impacts from Florida historic rehabilitation
        Page II-1
        Page II-2
        Page II-3
        Page II-4
        Page II-5
        Page II-6
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    Profile of and direct economic impacts from Florida heritage tourism
        Page III-1
        Page III-2
        Page III-3
        Page III-4
        Page III-5
        Page III-6
        Page III-7
        Page III-8
        Page III-9
        Page III-10
    Profile of and economic impacts from the Florida Main Street Program
        Page IV-1
        Page IV-2
        Page IV-3
        Page IV-4
        Page IV-5
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        Page IV-9
        Page IV-10
        Page IV-11
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    Economic impact of operations of Florida historical museums
        Page V-1
        Page V-2
        Page V-3
        Page V-4
        Page V-5
        Page V-6
    Profile of and economic impacts from the Florida Historic Preservation Grants-In-Aid Program
        Page VI-1
        Page VI-2
        Page VI-3
        Page VI-4
        Page VI-5
        Page VI-6
        Page VI-7
        Page VI-8
    Comparative property values analysis--use of GIS mapping to review property appraisal data
        Page VII-1
        Page VII-2
        Page VII-3
        Page VII-4
        Page VII-5
        Page VII-6
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        Page VII-23
        Page VII-24
    Bibliography
        Page VIII-1
        Page VIII-2
        Page VIII-3
        Page VIII-4
        Page VIII-5
        Page VIII-6
        Page VIII-7
        Page VIII-8
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        Page VIII-10
        Page VIII-11
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        Page VIII-27
        Page VIII-28
    Input-output analysis--technical description and application
        Page A-1
        Page A-2
        Page A-3
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    Summary of Florida property values comparisons
        Page B-1
        Page B-2
        Page B-3
        Page B-4
        Page B-5
        Page B-6
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Full Text





Economic Im acts


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RESEARCH ORGANIZATIONS


CENTER FOR GOVERNMENTAL RESPONSIBILITY
FREDRIC G. LEVIN COLLEGE OF LAW
UNIVERSITY OF FLORIDA


CENTER FOR URBAN POLICY RESEARCH
EDWARD J. BLOUSTEIN
SCHOOL OF PLANNING & PUBLIC POLICY
RUTGERS, THE STATE UNIVERSITY OF NEW
JERSEY


Principal Investigators
David Listokin
Mike L. Lahr
Timothy McLendon
JoAnn Klein



RESEARCH FUNDING i) OVERSIGHT

FLORIDA DEPARTMENT OF STATE
DIVISION OF HISTORICAL RESOURCES
BUREAU OF HISTORIC PRESERVATION



September 2002


UNIVERSITY OF
FLORIDA
Fredric GQ Levin College of Law


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ECONOMIC IMPACTS
OF HISTORIC PRESERVATION IN FLORIDA


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FEDERAL DISCLAIMER


This publication has been financed in part with historic preservation grant assistance provided by
the National Park Service, U.S. Department of the Interior, administered through the Bureau of
Historic Preservation, Division of Historical Resources, Florida Department of State, assisted
by the Florida Historical Commission. However, the contents and opinions do not necessarily
reflect the views and opinions of the Department of the Interior or the Florida Department of
State, nor does the mention of trade names or commercial products constitute endorsement or
recommendation by the Department of the Interior or the Florida Department of State. This
program receives Federal financial assistance for identification and protection of historic
properties. Under Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation
Act of 1973, and the Age Discrimination Act of 1975, as amended, the U.S. Department of the
Interior prohibits discrimination on the basis of race, color, national origin, disability, or age in its
federally assisted programs. If you believe you have been discriminated against in any program,
activity, or facility as described above, please write to: Office of Equal Opportunity, National
Park Service, 1849 C Street, NW, Washington, DC 20240.


ii Economic Impacts of Historic Preservation in Florida









TABLE OF CONTENTS

E X E C U T IV E SU M M A R Y ...................................................................... .....................v
Study Objective and Organization ......................................................... .............. vii
Economic Impacts of Florida Historic Rehabilitation .............. ........................................ xi
Economic Impacts of Florida Heritage Tourism.............................. xii
Economic Impacts of the Florida M ain Street Program ...................................................xiii
Economic Impacts of the Operations of Florida Historical Museums............................... xiv
Economic Impacts of the Florida Historic Preservation Grants-In-Aid Program (FHPG). xiv
Sum m ary of Benefits ............................................................ ........ .... xv

CHAPTER ONE: BACKGROUND TO THE ANALYSIS OF THE ECONOMIC
IMPACTS OF HISTORIC PRESERVATION .................. ...............I-1
The Need for Information on the Economic Impacts of Historic Preservation................-3
Prior Literature on the Economic Impacts of Historic Preservation ...............................-6
Current Study Scope and M ethodology..................................................................... -8

CHAPTER TWO: PROFILE OF AND ECONOMIC IMPACTS FROM FLORIDA
HISTORIC REHABILITATION .............. ................ ..........II-1
Introduction and Sum m ary ............................................... ......... ..............................11-3
Historic Rehabilitation in Florida ............................................................................. 11-4
Translating the Annual Florida Historic Rehabilitation Investment into Total Economic
Im pacts ............... ....................... ............................. ................... .. . ..... 11-5
Total Economic Impacts of Annual Florida Historic Rehabilitation............... ...............II-10

CHAPTER THREE: PROFILE OF AND DIRECT ECONOMIC IMPACTS FROM
FLORIDA HERITAGE TOURISM ..............................................III-1
Introduction .................................................... ..................... .............. III-3
Summary of Findings .......... ...... ............... .... ....... .. ............. III-3
National Travel and Tourism Overview .............................. .................. III-4
Heritage Tourism in the United States ......................................................... .............. III-5
Florida's Travel and Tourism Market Overview.................... .............. III-7
Total Economic Impacts from Heritage Tourism.............. ............... ................ III-8

CHAPTER FOUR: PROFILE OF AND ECONOMIC IMPACTS FROM THE
FLORIDA MAIN STREET PROGRAM ......... ................................IV-1
Introduction and Sum m ary ...................... .. ............................................................. IV -3
The Main Street Program: National Overview............................................ IV-4
The Florida Main Street Program................... ..............................IV-6
Data Maintained by the National Main Street Program....................................... IV-7
Direct Economic Impacts of the Florida Main Street Program .................................... IV-8
Total Economic Impacts from the Florida Main Street Program................................ IV-9


Economic Impacts of Historic Preservation in Florida









CHAPTER FIVE: ECONOMIC IMPACT OF OPERATIONS OF FLORIDA
HISTORICAL MUSEUMS ........... ........................... V-1
Introduction and Sum m ary...................... ...... .................................... .............. V -3

CHAPTER SIX: PROFILE OF AND ECONOMIC IMPACTS FROM THE
FLORIDA HISTORIC PRESERVATION GRANTS-IN-AID PROGRAM .....VI-1
Introduction and Sum m ary ......... ................... ............... ............. ..................... V I-3
Background to the Florida Historic Preservation Grants-In-Aid Program..................... VI-4
Economy ic Im pacts of the FH PG ................. ......................... .....................VI-4

CHAPTER SEVEN: COMPARATIVE PROPERTY VALUES ANALYSIS USE OF
GIS MAPPING TO REVIEW PROPERTY APPRAISAL DATA ...................VII-1
Introduction and Sum m ary .................. .... .............................. .....................V II-3
Other Studies Evaluating Historic Preservation and Local Communities .................. VII-5
M eth o d olog y ................................. .................................................................... V II-6
R results .................................. ..................................VII- 10
Initial Evaluation ................................... .... ..............VII-21
Suggestions for further Study.......................... .................. ............... VII-22

B IB L IO G R A PH Y ....................................................................V III-1

APPENDIX A: INPUT-OUTPUT ANALYSIS-TECHNICAL DESCRIPTION AND
APPLICATION .................. ...................................... ... .......... .. A-

APPENDIX B: SUMMARY OF FLORIDA PROPERTY
VALUES COM PARISONS ................................................ B-


iv Economic Impacts of Historic Preservation in Florida



























EXECUTIVE SUMMARY


Economic Impacts of Historic Preservation in Florida








































































vi Economic Impacts of Historic Preservation in Florida









STUDY OBJECTIVE AND ORGANIZATION


This technical study examines the many substantial economic effects of historic preservation in
Florida.

The study examines the total economic effects of historic preservation; these encompass both
the direct and multiplier effects. The direct impact component consists of labor and material
purchases made specifically for the preservation activity. The multiplier effects incorporate
what are referred to as indirect and induced economic consequences. The indirect impact
component consists of spending on goods and services by industries that produce the items
purchased for the historic preservation activity. The induced impact component focuses on the
expenditures made by the households of workers involved either directly or indirectly with the
activity. To illustrate, lumber purchased at a hardware store for historic rehabilitation is a direct
impact. The purchases of the mill that produced the lumber is an indirect impact. The household
expenditures of the workers at both the mill and the hardware store are induced impacts.

Economists estimate direct and multiplier effects using an input-output (I-O) model. This study
specifies the total economic effects of the major components of historic preservation in Florida
through a state-of-the-art IO model developed by the Center for Urban Policy Research
(CUPR) for the National Park Service (NPS). The model is termed the Preservation Economic
Impact Model (PEIM). The historic preservation components considered by the PEIM include
historic rehabilitation, heritage tourism, the Florida Main Street Program, and the
operations of Florida historical museums. There is also an analysis of the Florida Historic
Preservation Grant Program.

The results of PEIM model include many fields of data. The fields most relevant to this study are
the total impacts of the following:

* Jobs: Employment, both part- and full-time, by place of work, estimated using the
typical job characteristics of each industry. (Manufacturing jobs, for example, tend to be
full-time; in retail trade and real estate, part-time jobs predominate.) All jobs generated at
businesses in the region are included, even though the associated labor income of in-
commuters may be spent outside of the region. In this study, all results are for activities
occurring within the time frame of one year. Thus, the job figures should be read as job-
years; i.e., several individuals might fill one job-year on any given project.

* Income: "Earned" or "labor" income specifically, wages, salaries, and proprietors'
income. Income does not include nonwage compensation (i.e., benefits, pensions, or
insurance), transfer payments; or dividends; interest, or rents.

* Wealth: Value added-the equivalent at the subnational level of gross domestic
product (GDP). At the state level, this is called gross state product (GSP). Value added is
widely accepted by economists as the best measure of economic well-being. It is estimated


Economic Impacts of Historic Preservation in Florida









from state-level data by industry. For a firm, value added is the difference between the value
of goods and services produced and the value of goods and nonlabor services purchased.
For an industry, therefore, it is composed of labor income (net of taxes); taxes; nonwage
labor compensation; profit (other than proprietors' income); capital consumption
allowances; and net interest, dividends, and rents received.

* Taxes: Tax revenues generated by the activity. The tax revenues are detailed for the
federal, state, and local levels of government. Totals are calculated by industry.

Federal tax revenues include corporate and personal income, social security, and
excise taxes, estimated from the calculations of value added and income generated.

State tax revenues include income, excise, sales, and other state taxes, estimated from
the calculations of value added and income generated (e.g., purchases by visitors).

Local tax revenues include payments to substate governments, mainly through property
taxes on new worker households and businesses. Local tax revenues can also include
sales and other taxes.

The exposition includes seven chapters and two appendices. The first chapter sets the overall
perspective and is followed by a series of linked chapters that analyze, in tandem, the direct and
the total effects of Florida historic rehabilitation (chapter 2); Florida heritage tourism (chapter
3); the Florida Main Street Program (chapter 4); the Florida Historic Preservation Grants-in-
Aid Program (chapter 6), and a comparative analysis of property values in historic districts and
non-historic neighborhoods (chapter 7). The seven chapters are followed by an appendix that
details the economic impact model.

The major findings of the study are highlighted below and also summarized in summary exhibits
1 and 2. In all instances, impacts are shown for the latest years) for which complete information
was available at the time of the analysis.


viii Economic Impacts of Historic Preservation in Florida













SUMMARY EXHIBIT 1
Summary of the Annual Economic Impacts of Historic Preservation in Florida


FLORIDA DIRECT
EFFECTS









NATIONAL
TOTAL
IMPACTS
(DIRECT AND
MULTIPLIER)



FLORIDA PORTION
OF NATIONAL
TOTAL
IMPACTS


I II III IV.
Historic Operations of
Rehabilitation Heritage Tourism Main Street Activity Historic Museums
Total Examined
$350 million $3.721 billion $64 million $58 million Economic Impacts
annually of annually of heritage of construction annually annually
historic travel-attributed plus 850 retail/service results in:
, .,, (Sum1-IV)
rehabilitation spending, jobs
results in: results in: results in:
National Total (Direct and Multiplier) Impacts
Jobs 15,258 140,789 4,370 3,588 164,005
Income $465 million $3,419 million $116 million $98 million $4,203 million
GDP* $729 million $6,458 million $187 million $143 million $7,516 million
Taxes: Federal $86 million $677 million $22 million $17 million $802 million
Local/State $70 million $763 million $21 million $14 million $869 million
Tax subtotal $156 million $1,440 million $43 million $31 million $1,670 million
In-State Florida Total (Direct and Multiplier) Impacts

Jobs 10,443 107,607 3,202 1,989 123,242
Income $317 million $2,314 million $81 million $54 million $2,766 million
GSP* $496 million $4,552 million $132 million $86 million $5,266 million
Taxes: Federal $61 million $510 million $16 million $10 million $597 million
Local/State $50 million $583 million $15 million $9 million $657 million
Tax subtotal $111 million $1,093 million $31 million $19 million $1,254 million
In-state wealth* $446 million $4,042 million $116 million $78 million $4,669 million


Source: Rutgers University, Center for Urban Policy Research, 2001.
*GDP=Gross Domestic Product; GSP = Gross State Product; In-state wealth = GSP less federal taxes.
lNet of associated historic rehabilitation and heritage tourism spending.
Note: Totals may differ from indicated subtotals because of rounding.


Economic Impacts of Historic Preservation in Florida













SUMMARY EXHIBIT 2
Summary of the Economic Impacts of the Florida Historic Preservation Grants-in-Aid (FHPG)
For Fiscal Years 1996-2001


FLORIDA DIRECT
EFFECTS


NATIONAL
TOTAL
IMPACTS
(DIRECT AND
MULTIPLIER)

FLORIDA PORTION

OF NATIONAL
TOTAL
IMPACTS


Historic
Rehabilitation
$333 million FHPG
rehabilitation
over FY 1996-2001
results in:


National Total (Direct and Multiplier) Impacts
Person-years of work 15,233
Income $465 million
GDP* $727 million
Taxes: Federal $85 million
Local/State $69 million
Tax subtotal $154 million


In-State Florida Total (Direct and Multiplier) Impacts
Person-years of work 10,452
Income $317 million
GSP* $495 million
Taxes: Federal $61 million
Local/State $50 million
Tax subtotal $111 million
In-state c.illii 11,$.i i ) $434 million
Source: Rutgers University, Center for Urban Policy Research, 2001.
*GDP Gross Domestic Product; GSP = Gross State Product; In-state wealth = GSP less
federal taxes.
S"Person-years of work" are listed here rather than "jobs" as listed in Summary Exhibit 1
since the numbers represent an accumulation over multiple years.
Thus, the same jobs are counted from one year to the next.
Note: totals may differ from indicated subtotals because of rounding.


Economic Impacts of Historic Preservation in Florida









ECONOMIC IMPACTS OF FLORIDA HISTORIC REHABILITATION

* In 2000, an estimated total of $5.4 billion was spent on the rehabilitation of existing
residential and nonresidential buildings in Florida.

* Of the $5.4 billion spent on rehabilitation, an estimated $350 million, or about 6.5 percent
of the total, was spent on historic properties (older properties that were on, or might qualify
for, national, state, and/or local registers of historic sites).


SUMMARY EXHIBIT 3
Estimated Rehabilitation Total and
Historic Building Rehabilitation in Florida (2000)

Historic
Estimated Total Estimated Historic Rehabilitation as
Rehabilitation Rehabilitation % of Total
Component (in $ millions) (in $ millions) Rehabilitation
Residential 2,251 135 6.0
Nonresidential 3,113 215 6.9
Total 5,364 350 6.5

* The direct effects of historic rehabilitation are translated into multiplier effects, which
encompass, as noted, such dimensions as jobs (employment by place of work), income
(total wages, salaries, and proprietor's income), gross domestic product or GDP (total
wealth accumulated, referred to at the state level as gross state product or GSP), taxes
(federal, state, and local), and in-state ii eili/h (GSP less "leakage" in the form of federal
taxes).

* The total national economic impacts from the $350 million spent on statewide historic
rehabilitation included the following: 15,258 new jobs; $465 million in income; $729 million
in gross domestic product; and $156 million in taxes. Florida garnered about two-thirds of
these economic benefits and, as a result, captured 10,443 jobs; $317 million in income;
$496 million in gross state product; $111 million in taxes (including $50 million in state-local
taxes); and $446 million in in-state wealth. The other effects were distributed outside
Florida.


Economic Impacts of Historic Preservation in Florida xi










SUMMARY EXHIBIT 4
Total Economic Impacts of the Annual Florida
Historic Building Rehabilitation (2000 Million)


Jobs (person years)
Income ($millions)
GDP/GSPa ($millions)
Total taxes ($millions)
Federal ($millions)
State/Local ($millions)
In-State wealth ($millions)
(GSP minus federal taxes)
aGDP/GSP = Gross Domestic Product/Gross State Product.


In
Florida
10,443
$317 million
$496 million
$111 million
$61 million
$50 million
$446 million


Total
(U.S.)
15,258
$465 million
$729 million
$156 million
$86 million
$70 million


* The economic benefits from the historic rehabilitation are enjoyed throughout the Florida
economy. For instance, of the 10,443 in-state jobs, the construction, services, and retail
industries captured 2,666, 2,107 and 1,700 jobs, respectively.

ECONOMIC IMPACTS OF FLORIDA HERITAGE TOURISM

* During 2000, heritage tourism expenditures in Florida amounted to an estimated $3.721
billion.

* The total annual economic impacts from the $3.721 billion in annual spending by Florida
heritage travelers, encompassing both direct and multiplier effects, included, at the national
level, the following: 140,789 jobs; $3.419 billion in income; $6.458 billion in gross domestic
product; and $1.440 billion in taxes. Florida received a large share of these gains. On an
annual basis from the heritage tourism, Florida realized 107,607 jobs; $2.314 billion in
income; $4.552 billion in gross state product; $1.093 billion in taxes (including $583 million
in state-local taxes); and annual in-state wealth creation of about $4.042 billion.
SUMMARY EXHIBIT 5
Total Economic Impacts of the Annual Florida
Heritage Tourism Spending (2000)


Jobs (person years)
Income ($millions)
GDP/GSP ($millions)
Total taxes ($millions)
Federal ($millions)
State/Local ($millions)
In-state wealth ($millions)
(GSP minus federal taxes)
aGDP/GSP = Gross Domestic Product/Gross State Product.


In
Florida
107,607
$2,314 million
$4,552 million
$1,093 million
$510 million
$583 million
$4,042 million


Total
(U.S.)
140,789
$3,419 million
$6,458 million
$1,440 million
$677 million
$763 million


xii Economic Impacts of Historic Preservation in Florida









* The economic benefits of the Florida heritage tourism are enjoyed throughout the Florida
economy. For instance, of the $4.552 billion in gross state product, the retail trade, finance
insurance and real estate (FIRE), services, and manufacturing industries garnered $1.421
billion, $1.077 billion, $998 million, and $397 million, respectively.

ECONOMIC IMPACTS OF THE FLORIDA MAIN STREET PROGRAM

As other states, Florida has a Main Street program to help revitalize downtown areas.

In FY2000-01, the Florida Main Street Program resulted in the following investment.

SUMMARY EXHIBIT 6
Florida Main Street Program Investment (FY2000-01)


Component
Rehabilitation
New construction
Total
Number of new jobs


In $ Millions
$27.3
$45.3
$72.6
1,267


If we net out well as rehabilitation and other preservation outlays previously tallied1
(since we want to avoid double counting), the average annual Florida Main Street
investment is roughly $64 million of construction plus retail job benefits.

The total national economic impacts, including both direct and multiplier effects, from
the annual average Florida Main Street investment included a gain of 4,370 jobs, $116
million in income, $187 million in gross domestic product, and $43 million in taxes. The
in-state Florida gains were roughly 50 to 80 percent of the above-cited figures (see
below) with in-state wealth creation of $116 million.

















This figure is net of outlays for capital purposes and visitor-supported revenues. The capital outlays and
visitor revenues are netted out because these spending components have already been included in the
historic rehabilitation and the heritage tourism economic calculations, respectively.


Economic Impacts of Historic Preservation in Florida xiii










SUMMARY EXHIBIT 7
Total Economic Impacts of the Annual Net Florida Main Street Investment (FY2000-
01)


Jobs (person years)
Income ($million)
GDP/GSPb ($million)
Total taxes ($million)
Federal ($million)
State/Local ($million)
In-state wealth ($million)
(GSP minus federal taxes)
bGDP/GSP=Gross Domestic Product/Gross State Product.


In
Florida
3,202
$81 million
$132 million
$31 million
$16 million
$15 million
$116 million


Total
(U.S.)
4,370
$116 million
$187 million
$43 million
$22 million
$21 million


ECONOMIC IMPACTS OF THE OPERATIONS
OF FLORIDA HISTORICAL MUSEUMS

The Florida Association of Museums reports that historical museums in the state had a $68
million operating budget for 2001. If we net out rehabilitation and other preservation outlays
previously tallied (e.g., visitor-supported revenue already counted in the heritage tourism
component) then the economic impacts of Florida's historical museums are:

SUMMARY EXHIBIT 8
Total Economic Impacts of the Operation of Florida Historical Museums (2001)


Jobs (person years)
Income ($million)
GDP/GSPb ($million)
Total taxes ($million)
Federal ($million)
State/Local ($million)
In-state wealth ($million)
(GSP minus federal taxes)
bGDP/GSP=Gross Domestic Product/Gross State Product.


In
Florida
1,989
$54 million
$86 million
$19 million
$10 million
$9 million
$78 million


ECONOMIC IMPACTS OF THE FLORIDA
HISTORIC PRESERVATION GRANTS-IN-AID (FHPG)

* From FY1996 through FY 2001, about $3332 million of historic rehabilitation had
cumulatively been effected under FHPG auspices (for capital improvement purposes).


xiv Economic Impacts of Historic Preservation in Florida


Total
(U.S.)
3,588
$98 million
$143 million
$31 million
$17 million
$14 million


2Treated as $350 in present value terms.









* The FHPG has economic effects from both the historic rehabilitation (i.e., construction) it
engenders and from the historic tourism it supports (i.e., renovating Florida's historic
resources fosters visitation from heritage-oriented tourists). The former (rehabilitation) is a
one-time benefit, while the latter (tourism) is an on-going benefit. This study only analyzes
the historic rehabilitation benefit from the FHPG.

FHPG Historic Rehabilitation Economic Impacts

* The total national economic impacts from the FY1996 through FY2001 cumulative FHPG
historic rehabilitation investment included the following: 15,233 person-years of work; $465
million in income; $727 million in gross domestic product; and $154 million in taxes. From
the cumulative FHPG historic rehabilitation, the state of Florida garnered 10,452 person-
years of work; $317 million in income; $495 million in gross state product; $111 million in
total taxes (including $50 million in Florida state and local taxes); and $434 million in in-
state wealth.

SUMMARY EXHIBIT 9
Total Economic Impacts of the Cumulative FY1996-2001
FHPG-Supported Historic Rehabilitation ($333 million)

In Total
Florida (U.S.)
Jobs (person-years of work) 10,452 15,233
Income ($million) $317 million $465 million
GDP/GSP ($million) $495 million $727 million
Total taxes $111 million $154 million
Federal ($million) $61 million $85 million
State/Local ($million) $50 million $69 million
In- State Wealth $434 million -
(GSP Minus Federal Taxes)
Notes: Totals may differ from indicated subtotals because of rounding.
GDP/GSP = Gross Domestic Product/Gross State Product

* The economic benefits from the FHPG-supported historic rehabilitation are enjoyed
throughout the Florida economy. For instance, of the $495 million in gross state product,
the construction, services and manufacturing sectors of the Florida economy gained $111
million, $85 million, and $85 million, respectively.

SUMMARY OF BENEFITS

In sum, historic preservation in Florida is not just important culturally and aesthetically, it also
fosters significant economic activity and benefits in its own right.




Economic Impacts of Historic Preservation in Florida xv









* Annual direct economic effects, calculated conservatively, include $350 million in historic
rehabilitation spending, $3.721 billion in heritage tourism spending, about $64 million in
net3 Main Street Program activity and $58 million in net4 historical museum operations-for
a total of slightly over $4.2 billion annually. From FY1996 through 2001, the Florida
Historic Preservation Grants-in-Aid Program (FHPG) has cumulatively amounted to about
$333 million in rehabilitation investment. The FHPG, spurred by cumulative state assistance
of about $97 million, contributes to the $4.2 billion of annual Florida historic preservation
activity.

* When multiplier effects are taken into account from the $4.2 billion annual investment, the
total annual impacts to the nation include a gain of about 164,000 jobs; $4.203 billion in
income; $7.516 billion in GDP; and $1.670 billion in taxes. The in-state Florida benefits
include a gain of about 123,000 jobs; $2.766 billion in income, $5.266 billion in GSP,
$1.254 billion in taxes (including $657 million in state/local taxes), and $4.672 billion in in-
state wealth (Summary Exhibit 1).

* A further detailed breakdown of the economic benefits from the $4.2 billion in direct historic
preservation spending is shown in Summary Exhibit 10 (national impacts) and Summary
Exhibit 11 (in-state or Florida-specific effects). The exhibits show that although all sectors
of the economy benefit, many of the 164,005 new jobs at the national level are found in
such industries as services (52,058 jobs), retail trade (48,622 jobs), manufacturing (18,975
jobs), and construction (6,974 jobs). National income and GDP effects are also clustered in
the above sectors (Summary Exhibit 10).

* A similar pattern is observed for Florida (Summary Exhibit 11). Of the 123,242 Florida
jobs annually supported by historic preservation, 33,621 are in services, 55,002 are in retail
trade, and construction and manufacturing gamer 3,893 and 9,627 jobs, respectively. The
total in-state income gain of $2.765 billion resulting from historic preservation concentrates
in such industries as services ($751 million), retail trade ($796 million), and construction and
manufacturing ($174 million and $322 million). Yet, because of the interconnectedness of
the Florida economy, all sectors benefit. For example, historic preservation supports almost
1,000 agricultural-mining jobs in Florida, with associated income of about $24 million.

* Given the powerful economic pump-priming effect of historic preservation, public programs
to foster preservation can realize sizable economic development gains. The Florida Historic
Preservation Grants-in-Aid Program has been doing just that. The economic gains from the
FHPG- supported activity offset much of the state cost of this program.






3Net of the historic rehabilitation and heritage tourism components.
4Ibid.


xvi Economic Impacts of Historic Preservation in Florida











SUMMARY EXHIBIT 10
National Economic and Tax Impacts of
Annual Florida Preservation-Related Activity ($4.217 Billion)

Employment Income Gross Domestic
(jobs) ($000) Product ($000)

I. TOTAL EFFECTS (Direct and Indirect/Induced)*
Private
1. Agriculture 2,859 39,798.9 152,030.7
2. Agri. Serv., Forestry, & Fish 1,879 30,438.2 32,143.0
3. Mining 1,271 27,276.4 111,903.0
4. Construction 6,974 347,988.2 403,304.0
5. Manufacturing 18,975 630,201.6 1,001,284.7
6. Transport. & Public Utilities 7,134 276,637.7 613,135.9
7. Wholesale 6,109 257,498.2 434,545.5
8. Retail Trade 48,622 800,883.2 1,423,965.8
9. Finance, Ins., & Real Estate 16,711 607,619.8 1,630,512.4
10. Services 52,058 1,137,396.1 1,667,870.2
Private Subtotal 162,591 4,155,738.2 7,470,695.2
Public
11. Government 1,414 47,191.3 45,294.0
Total Effects (Private and Public) 164,005 4,202,929.5 7,515,989.2

II DISTRIBUTION OF EFFECTS/MULTIPLIER
1. Direct Effects 70,002 1,295,659.0 2,212,247.8
2. Indirect and Induced Effects 94,002 2,803,518.0 5,279,954.7
3. Total Effects 164,005 4,202,929.5 7,515,989.2
4. Multipliers (3/1) 2.343 3.244 3.397

III COMPOSITION OF GROSS STATE PRODUCT
1. Wages-Net of Taxes 3,935,086.5
2. Taxes
a. Local/State 868,518.9
b. Federal
General 478,205.4
Insurance Trusts 323,382.0
Federal Subtotal 801,587.4
c. Total taxes (2a+2b) 1,670,106.3
3. Profits, dividends, rents, and other 1,910,796.4
4. Total Gross State Product (1+2+3) 7,515,989.2

EFFECTS PER MILLION DOLLARS OF INITIAL EXPENDITURE
Employment (Jobs) 38.9
Income 996,569
Local/State Taxes 205,937
Gross State Product 1,782,138
Note: Detail may not sum to totals due to rounding.
*Terms:
Direct Effect (State) the proportion of direct spending on goods and services produced.
Indirect Effects-the value of goods and services needed to support the provision of those direct economic effects.
Induced Effects-the value of goods and services needed by households that provide the direct and indirect labor.



Economic Impacts of Historic Preservation in Florida xvii











SUMMARY EXHIBIT 11
In-State Economic and Tax Impacts of
Annual Florida Preservation-Related Activity ($4.217 Billion)

Employment Income Gross Domestic
(jobs) (000$) Product ($000)

I. TOTAL EFFECTS (Direct and Indirect/Induced)*
Private
1. Agriculture 201 6,159.0 20,822.7
2. Agri. Serv., Forestry, & Fish 717 9,135.1 9,516.2
3. Mining 81 8,405.9 18,163.8
4. Construction 3,893 174,383.1 221,787.3
5. Manufacturing 9,627 321,613.1 510,825.8
6. Transport. & Public Utilities 4,122 153,219.9 324,762.8
7. Wholesale 3,817 153,578.1 291,915.8
8. Retail Trade 55,002 796,318.1 1,504,445.2
9. Finance, Ins., & Real Estate 11,603 372,770.3 1,216,736.3
10. Services 33,621 750,738.5 1,127,902.8
Private Subtotal 122,684 2,746,321.2 5,246,878.5
Public
11. Government 558 19,252.0 19,014.3
Total Effects (Private and Public) 123,242 2,765,573.2 5,265,892.8

II DISTRIBUTION OF EFFECTS/MULTIPLIER
1. Direct Effects 67,158 1,235,145 2,139,221
2. Indirect and Induced Effects 56,084 1,530,428 3,126,672
3. Total Effects 123,242 2,765,573.2 5,265,892.8
4. Multipliers (3/1) 1.835 2.239 2.462

III COMPOSITION OF GROSS STATE PRODUCT
1. Wages-Net of Taxes 2,906,415.6
2. Taxes
a. Local/State 657,150.4
b. Federal
General 357,689.4
Insurance Trusts 239,644.8
Federal Subtotal 597,334.2
c. Total taxes (2a+2b) 1,254,484.6
3. Profits, dividends, rents, and other 1,104,992.6
4. Total Gross State Product (1+2+3) 5,265,892.8

EFFECTS PER MILLION DOLLARS OF INITIAL EXPENDITURE
Employment (Jobs) 29.2
Income 655,753
Local/State Taxes 155,819
Gross State Product 1,248,611
Note: Detail may not sum to totals due to rounding.
*Terms:
Direct Effect (State)-the proportion of direct spending on goods and services produced.
Indirect Effects-the value of goods and services needed to support the provision of those direct economic effects.
Induced Effects-the value of goods and services needed by households that provide the direct and indirect labor.



xviii Economic Impacts of Historic Preservation in Florida























CHAPTER ONE


Economic Impacts of Historic Preservation in Florida I-1


Background to the Analysis of the
Economic Impacts of
Historic Preservation








































































1-2 Economic Impacts of Historic Preservation in Florida









THE NEED FOR INFORMATION ON THE ECONOMIC IMPACTS
OF HISTORIC PRESERVATION

Until almost the mid-twentieth century, the idea of historic preservation was alien to the
American reverence for the new. There were but a handful of exceptions. Independence Hall,
slated for demolition, was purchased by the City of Philadelphia in 1816, and Mount Vernon
was saved by a valiant private women's group in the 1860s. Private philanthropy from the
Rockefeller family helped restore Colonial Williamsburg in the mid-1920s. In the mid-1930s,
there was some nascent public preservation action. The federal government, authorized by the
1935 Historic Sites Act, began identifying nationally significant landmarks on the National
Register of Historic Sites and Buildings. From the 1930s to the 1950s, a handful of
communities, most notably New Orleans and Charleston (South Carolina), established local
preservation commissions to identify and protect selected historic districts.

These preservation activities, however, were the exceptions. More typical was destruction of
even acknowledged landmarks. Pennsylvania Station in New York City is a prime example.
Federal programs, ranging from urban renewal to the interstate highway systems, fueled the
demolition of the nation's historic built environment. Partly in reaction to the widespread loss of
historic properties, a regulation system for preservation had developed by the 1960s. At the
federal level, the National Historic Preservation Act (NHPA) of 1966 created a National
Register of Historic Places and a review process, Section 106 of the NHPA, to evaluate federal
undertakings that threatened National Register eligible resources. With federal funds from the
NHPA, state historic preservation offices (SHPOs) were established to help identify sites and
structures to be placed on the National Resister. Many states further enacted "mini-106"
procedures to evaluate state and local government actions that threatened historic properties;
Florida was not one of those states.

Most significant was the establishment of local preservation commissions (LPCs). LPCs were
created to identify historic resources and then take appropriate action to designate these
resources as landmarks. Once designated, the landmarks could not be demolished, nor could
their facades be altered in a historically inaccurate fashion without the approval of the LPCs; at
minimum, these actions would be delayed pending LPC review.

In a short period of time, historic preservation has mushroomed in scope. There were about
1,000 entries on the National Register of Historic Places in 1968; today there are nearly
70,000. There have been almost 50,000 Section 106 reviews. In a few ears, the National
Trust for Historic Preservation's Main Street Program, designed to revitalize older downtown,
has grown from a handful to hundreds of successful examples nationwide. Local historic
commissions totaled only about 20 as of the mid-1950s. Civic spirit fueled by the Bicentennial
increased that number to 100, and today there are almost 2,000 local commissions. Other
barometers of historic preservation activity also show quantum increases (exhibit 1.1); still,
preservation remains the exception rather than the rule.

Preservation has accomplished much. Icons that have been saved, such as Grand Central
Station in New York, are important to the perception of quality of life. Less dramatic, but
equally as important, is the preservation of thousands of residential neighborhoods and
downtown throughout the United States.


Economic Impacts of Historic Preservation in Florida 1-3









EXHIBIT 1.1

Growth of Historic Preservation Activity: Selected Indicators
FISCAL YEAR Annual Listings on Cumulative Listings on Annual Advisory Cumulative Advisory Local Historic Distrct Annual Historic Cumulative Historic Annual Rehab Tax Cumulative Annual Tax Cumulative Tax
National Register of National Register of Council Section 106 Council Section 106 Commissions Preservation Fund Preservation Fund Credit Investment RehabTax Credit Credit Projects Credit Projects
Historic Places (entnes) Historic Places Review (cases) Review (cases) (millions of dollars) millionss of dollars) millionss of dollars) Investment Approved Approved
(entries) (millions of dollars)
1955 20


1966 100
1967 0 0
1968 1,204 1,204 5 5 $0 3 $0 3
1969 359 1,563 22 27 0 1 04
1970 832 2,395 57 84 1 0 1 4
1971 1,026 3,421 81 165 6 0 74
1972 1,533 4,954 152 317 6 0 13 4
1973 2,162 7,116 311 628 7 5 20 9
1974 2,151 9,267 689 1,317 11 5 32 4
1975 1,987 11,254 1,104 2,421 20 0 52 4
1976 2,284 13,538 2,263 4,684 492 24 8 77 2
1977 1,563 15,101 2,369 7,053 175 94 7
1978 3,120 18,221 1,759 8,812 578 45 0 139 7 $140 $140 512 512
1979 2,783 21,004 2,264 11,076 60 0 199 7 300 440 635 1,147
1980 3,027 24,031 1,623 12,699 55 0 254 7 346 786 614 1,761
1981 518 24,549 2,700 15,399 26 0 280 7 738 1,524 1,375 3,136
1982 3,140 27,689 1,827 17,226 832 25 4 306 1 1,128 2,652 1,802 4,938
1983 4,525 32,214 2,261 19,487 1,000 51 0 357 1 2,165 4,817 2,572 7,510
1984 3,814 36,028 2,241 21,728 27 5 384 6 2,123 6,940 3,214 10,724
1985 994 37,022 1,094 22,822 25 5 410 1 2,416 9,356 3,117 13,841
1986 3,401 40,423 1,400 24,222 23 7 433 8 1,661 11,017 2,964 16,805
1987 2,498 42,921 2,453 26,675 24 3 458 1 1,084 12,101 1,931 18,736
1988 2,035 44,956 1,700 28,375 28 3 486 4 866 12,967 1,092 19,828
1989 3,157 48,113 2,186 30,561 30 5 5169 927 13,894 994 20,822
1990 2,285 50,398 1,544 32,105 32 9 549 8 750 14,644 814 21,636
1991 3,834 54,232 1,647 33,752 34 5 584 3 735 15,379 678 22,314
1992 1,837 56,069 2,000 35,752 35 5 619 8 777 16,156 719 23,033
1993 1,539 57,608 2,332 38,084 1,863 36 9 656 7 547 16,703 538 23,571
1994 1,718 59,326 2,911 40,995 40 0 696 7 483 17,186 560 24,131
1995 1,514 60,840 2,831 43,826 2,000+ 41 4 483 0 569 17,755 621 24,752
1996 1,426 62,266 3,148 46,974 36 2 774 3 757 18,512 724 25,476

1997 1,685 63,951 2,667 49,641 36 6 8109 688 19,200* 902 26,378*


There is a slight error in these annual figures The National Center for Cultural Resource Stewardship and Partnerships, within the U S Department of the Interior, National Park Service, reports that cumulatively as of FY1997, $18 83 billion has been
invested, comprising 26,676 projects Further of note is that the annual rehab tax credit investment shown here is "certified investment" which differs from the "estimated investment" shown in Figure 1 .


Economic Impacts of Historic Preservation in Florida









The aesthetic and quality-of-life benefits of preservation are generally acknowledged. However,
doubts are often expressed about the quantifiable economic contribution of preservation. While
proponents of investment in such areas as public infrastructure and new housing construction
tout the job, income, and other financial benefits of their respective activities, historic
preservationists are much less vocal about the economic benefits that accrue from their
activities.

A dearth of information on the economic benefits of preservation has unfortunate consequences,
especially in competing for public and other support. Take, for instance, the federal preservation
tax incentive (hereafter referred to s the FPTI). Initiated in the late 1970s, the FPTI has
generated $19.2 billion in investment in historic preservation, encompassing about 26,000
separate projects. The FPTI is the most significant federal financial support for preservation,
eclipsing even the Historic Preservation Fund that supports SHPOs (see exhibit 1.1). Despite its
accomplishments, the FPTI has been under assault from those working to reduce federal tax
incentives. In 1986, the FPTI tax credit was reduced from 25 to 20 percent, and there are
periodic calls for further reductions or even elimination of the FPTI. Critics of the FPTI cite its
costs to the Federal Treasury. Preservationists, however, have failed to document the FPTI's
full economic benefits. This omission, in part due to the fact that a methodology for documenting
the FPTI's benefits is not readily at hand, puts preservationists at a competitive disadvantage
compared with those arguing for federal tax breaks for other investments (e.g., capital gains and
infrastructure), who can marshal arrays of statistics to support their respective causes.

Parallel developments exist at the state level. As the federal government has cut back and states
have ascended as implementers and funders, state activity has become more significant in
historic preservation. It is no accident that a recent publication from the National Trust for
Historic Preservation is entitled Smart States, Better Communities (Beaumont 1997).
Numerous states, including Florida, Maryland, Texas, and Vermont, have passed bond issues
to foster preservation. But there are many demands on the public purse, and preservation is in
competition for state support for other investments ranging from adding new or rehabilitating
existing highways to providing affordable mortgages for new housing. Preservationists often do
not have hard numbers on the economic benefits of their projects, unlike the proponents of
competing investments. The same is true when other state preservation incentives are proposed,
such as a state income tax credit. State legislators might be more inclined to support such a
credit if they were presented with evidence that their home constituencies would benefit from
increased jobs, income, and spending as a result of the credit-induced preservation. Yet, such
evidence is often not readily available because the procedures for measuring the economic
benefits deriving from preservation projections are not developed.

In summary, the dearth of "hard" economic numbers on preservation and the lack of
procedures to quantify these benefits have significant adverse implications. This is unfortunate,
since historic preservation generates extensive economic benefits. In fact, preservation's benefits
surpass those yielded by such alternative investments as infrastructure and new housing
construction.

This study documents the benefits of preservation and develops procedures for assessing its
economic effects that others may apply. The focus of the study is the state of Florida. Few
previous analyses have examined the economic impacts of historic preservation at a statewide
level to the scope and detail of this study. To set the perspective for the current investigation,
prior literature is briefly reviewed here. (An extensive listing of relevant literature and annotations
of critical studies are contained in the bibliography in appendix A.)


Economic Impacts of Historic Preservation in Florida 1-5










PRIOR LITERATURE ON THE ECONOMIC IMPACTS
OF HISTORIC PRESERVATION

Studies conducted in the late 1970s and early 1980s, although nominally addressing the
economic benefits of historic preservation, focused less on economic benefits and more on
financial feasibility. (This was a time when the feasibility of preservation vis-a-vis new
construction was still an issue.) For example, The Economic Benefits of Preserving Old
Buildings (National Trust for Historic Preservation 1982) considered such topics as hidden
assets of old buildings, the costs of preservation, the types of government grants available for
the preservation process, and the advantages of historic preservation from a private financier's
viewpoint.

Some of the early literature did introduce economic effects into the discussion, typically in
anecdotal or case-study fashion. For instance, The Contributions of Historic Preservation to
Urban Revitalization (Advisory Council on Historic Preservation [ACHP] 1979) investigated
the effect of historic preservation activities in Alexandria (Virginia), Galveston (Texas),
Savannah (Georgia), and Seattle (Washington). According to the ACHP, historic designation
and attendant preservation activities provide many benefits, including saving important
properties from demolition, fostering construction, and providing a concentrated area of interest
to attract tourists and metropolitan-area visitors. Designation also was found to have the
beneficial effect of strengthening property values-an impact documented by comparing the
selling prices of buildings located within versus outside the historic districts in Alexandria and
other cities studied.

The economic topics considered by the Advisory Council on Hstoric Preservation in 1979-
preservation's relationship to property values, tourism, and construction-have been revisited
numerous times, typically on a case-study basis (see bibliography). For instance, Samuels
(1981) examined increases in property values in designated historic neighborhoods in
Washington, D.C. Schaeffer and Ahem (1988), Benson and Klein (1988), Ford (1989), Gale
(1991), and Leithe et al. (1991) did similar property value analyses in Chicago, Cleveland,
Baltimore, Washington, D.C., and Galveston, respectively.

Construction and tourism effects from preservation have also been studied by numerous
authors. For instance, Lane (1982) and Johnson and Sullivan (1992) examined the tourism
benefits of Civil War battlefield visitation. Avault and Van Buren (1985) examined the economic
contributions of historic rehabilitation construction activity in Boston, and a similar analysis was
done in Atlanta by the Center for Business and Economic Studies (1986).

Our review of the existing literature shows some changes over time. The geographical scale of
analysis in considering economic impact has expanded. Whereas earlier the focus was typically
a neighborhood or two (e.g., Philadelphia's Society Hill or Seattle's Pioneer Square),
investigations are now more commonly citywide (e.g., Fredericksburg, Virginia, and Galveston,
Texas), and there have been some examples of statewide studies, such as in Virginia
(Preservation Alliance of Virginia 1996) and Rhode Island (University of Rhode Island 1993).
In combination, some of these more geographically broad studies have examined not only the
direct but the total economic effects of historic preservation, the latter including multiplier
benefits to the larger state and regional economies.


1-6 Economic Impacts of Historic Preservation in Florida









For example, the University of Rhode Island (1993) reviewed the impacts of the Rhode Island
Historical Preservation Commission's (RIHPC) programs on the state economy in the areas of
employment, wages, value added, and tax revenues generated. To that end, the study used
computer models of the state economy to incorporate both direct and multiplier impacts. The
study found that the greatest impacts of RIHPC's programs were in the construction-related
industries, with retail sales and service industries affected positively as well.

A methodology for examining the total (direct and multiplier) impacts of preservation was
developed by Joni Leithe, Thomas Muller, John Peterson, and Susan Robinson of the
Government Finance Research Center (Leithe et al. 1991) for the National Trust for Historic
Preservation. This work, important to the field, included approaches for estimating the benefits
of construction activity, real estate activity (e.g., historic property value appreciation), and
commercial activity (e.g., enhanced tourism). Leithe et al. applied the methodology in
Fredericksburg, Virginia, and Galveston, Texas (Government Finance Officers Association
1995). For instance, in Fredericksburg, historic preservation was found to have the following
effects:

* Over an eight-year period, 777 projects totaling $12.7 million were undertaken in the
historic district. These projects created approximately 293 construction jobs and
approximately 284 jobs in sales and manufacturing.

* Property values, both residential and commercial, experienced a dramatic increase.
Between 1971 and 1990, residential property values in the historic district increased an
average of 674 percent as compared with a 410 percent average increase in properties
located elsewhere in the city.

* In 1989 alone, $11.7 million in tourist purchases were made within the historic district, and
another $17.4 million outside the district, with secondary impacts resulting in $13.8 million.

No overview of literature on the subject would be complete without mentioning The Economics
of Historic Preservation by Donovan Rypkema (1994), which compiled results from
numerous studies showing the economic benefits of preservation. Rypkema also was the author
of the Virginia report (Preservation Alliance of Virginia 1996) that summarized how
preservation benefited the state's economy through tourism, construction, business
development, and property value enhancement. Rypkema's numerous and important
contributions to the field are noted in the bibliography to this study.

We should also note a study by the authors of the current investigation that focused on the states
of New Jersey and Texas (Listokin and Lahr 1997; 1999). The New Jersey and Texas reports
considered the direct and total (with multiplier) effects of different components of historic
preservation in these states, including historic rehabilitation, heritage tourism, and the operation
of such preservation efforts as the Main Street Program. The current analysis considers the
similar aspects of historic preservation in Florida.


Economic Impacts of Historic Preservation in Florida 1-7









CURRENT STUDY SCOPE AND METHODOLOGY


The current investigation builds from, and adds to, the state of the art as reflected in the extant
literature. Some of the distinguishing characteristics of the current study are its

1. statewide scope
2. development of preservation-specific data
3. comprehensive linked analysis
4. use of a state-of-the-art input-output model

Statewide Scope

The current investigation is truly statewide in scope. It estimates statewide figures on the amount
of historic rehabilitation, heritage tourism, and Main Street investment. Other state investigations
have not done this to the same scale. For instance, the Virginia study (Preservation Alliance of
Virginia 1996) examined construction impacts from the rehabilitation of some Virginia historic
properties, but did not conduct a full inventory of such state activity since this information was
simply not available.

Development of Preservation-Specific Data

Some other studies have developed preservation-specific information, such as the profile and
spending of heritage versus nonheritage tourists (Preservation Alliance of Virginia 1996), but
few do this to the extent accomplished here. Thus, the chapter on heritage tourism in this study
develops side-by-side profiles of all tourists (historic and nonhistoric), as well as such subgroups
as heritage versus nonheritage day-trippers, and heritage versus nonheritage overnighters. This
side-by-side profiling is accomplished for many types of characteristics, such as demographic
background, trip origin, and trip spending, with the latter differentiated into numerous
components. The point is not detail for detail's sake, but rather that the more precisely the
profile and spending of heritage travelers is detailed, the more precise will be the projection of
economic impact of this aspect of preservation.

The more refined development of preservation-specific data is especially pronounced in the
current study in regard to the breakdown of historic rehabilitation expenditures. Many studies to
date use "canned programs" hat have information on rehabilitation in general. But historic
rehabilitation is not the same as general rehabilitation. To that end, the current study
deconstructs in great detail the components of historic rehabilitation. This detailed breakdown
permits a much more precise estimate of the economic impacts of historic rehabilitation, which in
turn is one of the most important components of historic preservation.

Comprehensive Linked Analysis

As there are many facets to historic preservation, a study of its economic impacts should
incorporate as many of these as possible. The current investigation attempts to do this by
analyzing the respective economic contribution of (1) historic rehabilitation, (2) heritage tourism,
and (3) Main Street investment. The Florida investigation also considers the effects of this
state's innovative state tax credits for rehabilitation investments.

The comprehensive inclusion of the many components of historic preservation in an economic
assessment must carefully avoid double counting. For instance, if all of the activity of Main


1-8 Economic Impacts of Historic Preservation in Florida









Street investments, historic rehabilitation, and heritage tourism were included, there would be
duplicative counting because each one of these entities includes historic rehabilitation, which
presumably is already tallied in the separate historic rehabilitation component.

The current study avoids this. For instance, in considering the economic contribution of Main
Street, we net out from the Main Street investment capital spending and revenue derived from
visitors, because these are considered in the earlier tallied historic rehabilitation and heritage
tourism projections, respectively.

Use of a State-of-the-Art Input-Output Model

As other recent studies have done, the current investigation of the economic impacts of historic
preservation considers direct effects of preservation-related activities as well as indirect and
induced economic impacts. The total or multiplier effect, sometimes referred to as the ripple
effect, has three segments:

1. A direct effect (the initial drop causing the ripple effects) is the change in purchases due to
a change in economic activity.

2. An indirect effect is the change in the purchases of suppliers to the economic activity
directly experiencing change.

3. An induced effect is the change in consumer spending that is generated by changes in labor
income within the region as a result of the direct and indirect effects.

To illustrate briefly, the direct effects encompass the goods and services immediately involved
in the economic activity analyzed, such as historic rehabilitation. For historic rehabilitation, this
could include carpenters hired and steel purchased. Indirect effects encompass the value of
goods and services needed to support the provision of the direct effects (e.g., materials
purchases by the steel plant). Induced effects include the goods and services needed by
households to provide the direct and indirect labor required to rehabilitate a historic structure
(e.g., food purchases by the carpenters' or steelworkers' households). The estimation of
indirect and induced effects typically is accomplished by what is referred to as an input-output
model.

In this study, the projection of the total or multiplier effects of historic preservation is
accomplished by application of an input-output model developed by the authors. This model
offers significant advantages in detailing the total economic effects of an activity (such as historic
rehabilitation), including multiplier effects (see appendix A).
The analysis in the subsequent chapters first presents the direct effects of the components of
historic preservation-historic rehabilitation, heritage tourism, Main Street investment, the
operations of historic museums, and the Florida Preservation Grants-in-Aid Program-and then
applies the input-output model to derive total or multiplier effects.


Economic Impacts of Historic Preservation in Florida 1-9


























CHAPTER TWO


Economic Impacts of Historic Preservation in Florida I1-1


Profile and Economic Impacts of
Florida Historic Rehabilitation








































































11-2 Economic Impacts of Historic Preservation in Florida









INTRODUCTION AND SUMMARY


This chapter first describes the magnitude of historic rehabilitation in Florida. The analysis is for
the year 2000, which, when this study commenced, was the last year for which construction
information was fully available. The chapter then considers how the direct Florida historic
rehabilitation investment translates into total economic impacts, including multiplier effects. The
results of the analysis are summarized below:

* In 2000, an estimated total $5.363 billion was spent on rehabilitation in Florida: $2.250
billion on residential properties and $3.113 billion on nonresidential properties.

* Of the $2.1 billion spent on rehabilitation, an estimated $350 million, or about 6.5 percent
of the total, was spent on historic private properties (properties listed on or eligible for
historic designation on national, state, and/or local registers of historic sites).

EXHIBIT 2.1
Estimated Total Rehabilitation
and Historic Building Rehabilitation in Florida (2000)

Property Type Estimated Total Estimated Historic Historic
Rehabilitation Rehabilitation Rehabilitation as %
(in $ million) (in $ million) of Total
Rehabilitation
Residential $2,250 $135 6.0%
Nonresidential $3.113 $215 6.9%
Total $5,363 $350 6.5%

The direct effects of historic rehabilitation are translated into multiplier effects, which
encompass such dimensions as jobs (employment by place of work), income (total wages,
salaries, and proprietor's income), gross domestic product or GDP (total wealth
accumulated, referred to at the state level as gross state product or GSP), taxes (federal,
state, and local), and in-state wealth (GSP less "leakage" in the form of federal taxes).

* The total national economic impacts from the $350 million spent in 2000 on statewide
historic rehabilitation included the following: 15,258 new jobs; $465 million in income; $729
million in gross domestic product; and $156 million in taxes. Florida garnered a large share
of these economic benefits and, as a result, captured 10,443 jobs; $317 million in income;
$496 million in gross state product; $111 million in taxes (including $50 million in-state local
taxes); and $435 million in in-state wealth. The other effects were distributed outside
Florida.


Economic Impacts of Historic Preservation in Florida 11-3









EXHIBIT 2.2
Total Economic Impacts of the Annual Florida
Historic Building Rehabilitation ($350 Million)

In Total
Florida (U.S.)
Jobs (person years) 10,443 15,258
Income ($millions) $317 million $465 million
GDP/GSPa ($millions) $496 million $729 million
Total taxes ($millions) $111 million $156 million
Federal ($millions) $61 million $86 million
State/Local ($millions) $50 million $70 million
In-State wealth ($millions) $435 million -
(GSP minus federal taxes)
aGDP/GSP = Gross Domestic Product/Gross State Product.

HISTORIC REHABILITATION IN FLORIDA

Definition of Historic Rehabilitation

For the purposes of this study, historic rehabilitation includes all "rehabilitation" that is effected
in "historic" properties. "Rehabilitation" is defined as encompassing all construction work that
the Census classifies as "alterations." Not included are minor repairs or structures added to
buildings (i.e., the Census categories "repairs" and "additions"). All rehabilitation is included-
not just work of a historic nature (e.g., facade restoration)-as long as the rehabilitation is
effected in a historic property. "Historic" is defined as a property that is designated as a
national, state, or local landmark; or is located in a national, state or local historic register
district; or because of age and other factors might be eligible for historic designation.

The definition of "rehabilitation" is straightforward (from the Census); however, the specification
of "historic" as used in the present study bears further comment. Inclusion of landmarks listed
by all levels of government-federal, state, and local-acknowledges that all of these listings are
important. Including only entries on the National Register of Historic Places and omitting local
landmarks would fail to incorporate the tremendous interest in preservation at the local level and
the significance of local involvement, as evidenced by the numbers of landmark and historic
district designations and the related rehabilitation of these resources.

Thus, our specification of historic includes only those properties already officially listed on
registers, whether federal, state, or local, and properties that, because of age and other factors,
might be eligible for historic listing. In the field of preservation, eligibility for designation is in fact
a recognized status. At the federal level, a Section 106 review is triggered when federal action
threatens properties both on, and eligible for, the National Register. There is a valid reason why
eligibility for listing is recognized by historic preservationists, principally that the time gap


11-4 Economic Impacts of Historic Preservation in Florida









between eligibility status and official listing should not thwart the ultimate goal of protecting
legitimate historic resources.

Scale of Historic Rehabilitation in Florida

At first glance, the task of determining the share of Florida rehabilitation work that is in historic
stock seems easy: simply sum for all historic properties the total amount of rehabilitation and
repair work that is performed. Unfortunately, there is no centralized data source for current
building rehabilitation activity, nor is there one that lists historic properties in the state.

As recently as 1994, data on rehabilitation by community were collected by the Permits Division
of the U.S. Bureau of Census. The series was ended, however. Indeed, the only construction
data collected at the community level pertain to new residential construction permits. Further,
the latest centralized data set with information on the age of structures in Florida is the 1990
decennial national Census, and that too relates only to residential properties. Thus, it was within
these constraints that estimates of the statewide value of rehabilitation of historic structures
proceeded. The process used to estimate the extent of historic rehabilitation of buildings
effected in Florida in 2000 is outlined below.

1. First, past (pre-1994) relationships between permits for new residential building and both
new nonresidential and rehabilitation construction for each of Florida's communities were
applied to 2000 data for new residential construction from the Census.

2. The community-level incidence ratios were applied to the respective estimates of
rehabilitation activity tsing year 2000 permits data to obtain final statewide estimates of
private historic preservation activity effected in privately owned properties.

Exhibit 2.1 summarizes the results of the method.

TRANSLATING THE ANNUAL FLORIDA HISTORIC REHABILITATION
INVESTMENT INTO TOTAL ECONOMIC IMPACTS

This section discusses how the total economic impact of the estimated $350 million of
rehabilitation effected in historic properties annually is derived. First, the typical purchases for
each type of property on which historic rehabilitation is taking place-single-family, multifamily,
and nonresidential-are detailed by industry. The lists of typical labor, material, and service
purchases for each property type are then standardized. These estimated economic "recipes"
for historic renovation are then multiplied by the annual amount of such activity for each
property type. The resulting vectors of historic rehabilitation volume are then applied to input-
output models that calculate total economic impacts (direct, indirect, and induced) for the state
of Florida and the nation.
"Recipes" for Historic Rehabilitation


Economic Impacts of Historic Preservation in Florida 11-5









Direct effects, or direct requirements, the first category of total economic impact, are readily
identified once a project has been bid and once its costs have been calculated and summed. In
theory, the best way to estimate a project's direct requirements would be to use bid sheets that
apply cost elements (i.e., labor and materials) to items specified by the project's architects and
engineers. Bid sheets would provide sufficient detail on project requirements to identify the
industry that supplies the components, as well as the type of labor needed for the work. The
quality of the estimates of a project's direct requirements, in turn, determines the quality of the
estimates of other categories of economic impacts. Thus, estimates demand an unusual amount
of thoroughness and care. In ideal circumstances, the thoroughness extends to identifying where
the direct requirements come from, as well as a very detailed specification of the supplying
industry.

In prior studies, the Center for Urban Policy Research (CUPR) obtained detailed cost
information on renovations effected on a variety of historic properties by

* contacting developers/sponsors active in historic preservation,

* obtaining files on historic rehabilitation projects certified for federal preservation tax credits,

* obtaining files on projects that had received public funding.

In all instances, the information obtained approached the detail of a bid sheet. Based on these
sources, CUPR received information on almost 60 historic properties requiring just shy of $100
million in recent rehabilitation. The detailed cost estimates for these projects were summed by
property type-residential and nonresidential. Using information from the detailed cost estimates
as well as the prior experience of the Regional Science Research Corporation in similar studies
(University of Rhode Island 1993), the cost estimates by property type were converted into
purchases of goods and services, including labor, by industry. This lengthy, sometimes
subjective, conversion process enabled the specification required to get accurate results by
industry from the preservation economic impact model. The result is an "economic recipe" of
the direct requirements for historic rehabilitation by property type.

Estimating Total Economic Impacts

Total economic impacts encompass both direct and multiplier effects. The latter incorporate
indirect and induced impacts. The character of the direct impacts of historic preservation is
derived from the recipes noted above. The process for estimating a given project's indirect and
induced economic impacts is more roundabout. By definition, a project's first round of indirect
impact includes the purchases of any supplies and/or services that are required to produce the
direct effects. Subsequent purchases of supplies and services generate other rounds of indirect
impacts. The induced impacts are the purchases that arise, in turn, from the increase in
aggregate labor income of households. Aggregate labor income is defined as the sum of wages,
salaries, and proprietors' income earned by workers. Both the indirect and induced economic


11-6 Economic Impacts of Historic Preservation in Florida









impacts demonstrate how the demand for direct requirements reverberates through an
economy.

Exhibit 2.3 details the economic impacts of the rehabilitation of historic properties. The direct
impact component consists of purchases made specifically for the construction project. Direct
impacts on the local economy are composed only of purchases from local organizations.

The indirect impact component consists of spending on goods and services by industries that
produce the items purchased by the contractors who are preserving the property. Among his
many business relationships, for example, a contractor might purchase windows from "Jerry's
Home Improvement Inc." (JHI), which makes custom windows. In order to produce windows,
JHI must hire craftsmen as well as contract with firms that supply glass, adhesives, paints and
coatings, glazing, and wood products. JHI also hopes to make a profit for its
owners/shareholders. In order to meet JHI's needs, its suppliers must also hire workers and
obtain materials and specialized services. The same process is repeated for their suppliers, and
so on. Thus, an extensive network of relationships is established based upon round after round
after round of business transactions that emanate from a single preservation project. It is this
network of transactions that describes the set of indirect impacts. Of course, a firm's net indirect
contribution to the preservation activity largely depends on (1) the total value of its transactions
in the network; and (2) the proximity of its business relationships) to the preservation
contractor within the project's business network. Similar to direct impacts, local indirect impacts
are composed only of indirect business transactions that occur in the local economy.

Finally, induced impacts are a measure of household spending. They are a tally of the
expenditures made by the households of the construction workers on a preservation project, as
well as the households of employees of the supplying industries.


Economic Impacts of Historic Preservation in Florida 11-7









EXHIBIT 2.3
Examples of Direct and Multiplier Effects
(Indirect and Induced Impacts) of Historic Preservation

MULTIPLIER EFFECTS
DIRECT IMPACTS INDIRECT IMPACTS INDUCED IMPACTS
Purchases for: Purchases of: Household spending on:
Architectural design Lumber & wood products Food, clothing, day care
Site preparation Machine components Retail services, public
Construction labor Stone, clay, glass, & gravel transit, utilities, carss, oil
Building materials Fabricated metals & gasoline, property &
Machinery & tools Paper products income taxes, medical
Finance & insurance Retail & wholesale services services, and insurance
Inspection fees Trucking & warehousing

One means of estimating indirect and induced impacts would be to conduct a survey of the
business transactions of the primary contractor. The business questionnaire for this survey would
ask for the names and addresses of the contractor's suppliers; what and how much they supply;
the names and addresses of the contractor's employees; and the annual payroll.

A related questionnaire would cover the household spending of the employees of the surveyed
firms. It would request a characterization of each employee's household budget by detailed line
items, including names and addresses of the firms or organizations from which each line item is
purchased.

Both questionnaires subsequently could be used to measure indirect and induced impacts of the
primary contractor's activity. The business questionnaire would be sent to the business
addresses identified by the primary contractor; the household questionnaire, in turn, would be
sent to the homes of the employees of hose businesses that responded to the survey. This
"snowball-type" sampling would continue until time or money was exhausted. In order to keep
each organization's or household's contribution to the project in proper perspective, its total
spending would be weighted by the size of its transaction with its customers who were included
in the survey activity. The sum of the weighted transaction values obtained through the surveys
would be the total economic impact of the project.

This survey-based approach to estimating indirect and induced impacts consumes a great deal
of money and time, however. In addition, response rates by firms and households on surveys
regarding financial matters are notoriously low. Hence, in the rare cases where survey work has
been conducted to measure economic impacts, the results have tended to be not statistically
representative of the targeted network of organizations and households. Consequently, relatively
less expensive economic models based on Census data are typically used to measure economic
impacts.


11-8 Economic Impacts of Historic Preservation in Florida









The economic model that has proven to estimate the indirect and induced economic effects of
events most accurately is the input-output model. Its advantage stems from its level of industry
detail and its depiction of interindustry relations. As shown in appendix A, a single calculation-
known as the Leontief inverse-simulates the many rounds of business and household surveys.
Input-output tables are constructed from nationwide Census surveys of businesses and
households. The most difficult part of regional impact analysis is modifying a national input-
output model so that it can be used to estimate impacts at a subnational level. Regionalization of
the model typically is undertaken by the model producer and requires a large volume of data on
the economy being modeled. This study employs regional input-output models to estimate the
extent of the indirect and induced economic effects of a direct investment in historic preservation
activities. The economic effects of historic rehabilitation are studied in this chapter; the effects of
heritage tourism, the Main Street Program, and other historic preservation components are
studied in later chapters.

The Regional Science Research Corporation's Input-Output Model

The regional input-output model used by this study to derive the total economic impacts is a
regionalized version of the Preservation Economic Impact Model produced by CUPR for the
National Park Service. The PEI model (PEIM) produces very accurate estimates of the total
regional impacts of an economic activity and employs detail for more than 500 industries in
calculating the effects.

This model and its predecessors have proven to be the best of the non-survey-based regional
input-output models at measuring a region's economic self-sufficiency. The models also have a
wide array of measures that can be used to analyze impacts. In particular, PEIM produces one
of the only regional economic models that enable an analysis of governmental revenue (i.e., tax)
impacts and an analysis of gains in total regional wealth. (See appendix A for more details on
the relative higher quality of the PEIM.)

The results of PEIM include many fields of data. The fields most relevant to this study are the
total impacts with respect to the following:

* Jobs: Employment, both part- and full-time, by place of work, estimated using the
typical job characteristics of each detailed industry. (Manufacturing jobs, for example,
tend to be full-time; in retail trade and real estate, part-time jobs predominate.) All jobs
generated at businesses in the region are included, even though the associated labor income
of commuters may be spent outside of the region. In this study, all results are for activities
occurring within the time frame of one year. Thus, the job figures should be read as job-
years, i.e.; several individuals might fill one job-year on any given project.

* Income: "Earned" or "labor" income specifically wages, salaries, and proprietors'
income. Income in this case does not include nonwage compensation (i.e., benefits,
pensions, or insurance), transfer payments, or dividends, interest, or rents.


Economic Impacts of Historic Preservation in Florida 11-9










* Wealth: Value added-the equivalent at the subnational level of gross domestic
product (GDP). At the state level, this is called gross state product (GSP). Value added is
widely accepted by economists as the best measure of economic well-being. It is estimated
from state-level data by industry. For a firm, value added is the difference between the value
of goods and services produced and the value of goods and nonlabor services purchased.
For an industry, therefore, it is composed of labor income (net of taxes); taxes; nonwage
labor compensation; profit (other than proprietors' income); capital consumption
allowances; and net interest; dividends; and rents received.

* Taxes: Tax revenues generated by the activity. The tax revenues are detailed for the
federal, state, and local levels of government. Totals are calculated by industry.
Federal tax revenues include corporate and personal income, social security, and excise
taxes, estimated from the calculations of value added and income generated.

State tax revenues include personal and corporate income, state property, excise, sales,
and other state taxes, estimated from the calculations of value added and income generated
(e.g., purchases by visitors).

Local tax revenues include payments to substate governments mainly through property
taxes on new worker households and businesses. Local tax revenues can also include
revenues from local income, sales, and other taxes.

TOTAL ECONOMIC IMPACTS OF ANNUAL
FLORIDA HISTORIC REHABILITATION

This chapter previously estimated that $350 million in historic rehabilitation is effected annually in
Florida. What is the total economic benefit of this activity? What proportion of these benefits
accrues to Florida?

To answer these questions, the study team applied the direct requirements of $350 million in
historic rehabilitation construction activity to economic models of Florida and the United States.
This yielded total economic impacts for the country as a whole (national or U.S. effects) and for
the state of Florida (in-state effects). For both the nation and state, the significant economic
indicators were jobs created, resident income generated, resident wealth generated (gross
domestic or state product), and taxes generated by level of government.

Besides the above four measures, CUPR estimated an additional gauge of activity termed in-
state wealth. This measure consists of in-state generation of value added (or gross state
product), less the amount that "leaks" out of the state's economy in the form of taxes paid to
the federal government. Since taxes paid to the state and local governments remain in state, they
cannot be said to "leak" and, thus, are considered part of the accumulated in-state wealth.


11-10 Economic Impacts of Historic Preservation in Florida


11-10


Economic Impacts of Historic Prcscrvation in Florida









PEIM expresses the resulting jobs, income, and wealth impacts in various levels of industry
detail. The most convenient application breaks the industry-level results at the one-digit standard
industrial code (SIC) or division level. This level has 11 industry divisions:

1. Agriculture
2. Agricultural, Fishing, and Forestry Services
3. Mining
4. Construction
5. Manufacturing
6. Transportation, Communications, and Public Utilities (TCPU)
7. Wholesale Trade
8. Retail Trade
9. Finance, Insurance, and Real Estate (FIRE)
10. Services
11. Government

PEIM provides results in two other industry breakdowns that detail subcategories under each of
these eleven groups. These breakdowns use the two-digit SIC (86-industry) specification and
the full industry specification of the input-output model (about 517 industries).

The model results, however, are only as good as the data that go into them. Thus, when the
direct requirements are estimated, and the industry-level purchases are also estimated (as is the
case in this study), care should be taken in interpreting model results, especially when they
contain extreme categorical detail. Hence, the main body of this report focuses on the one-digit
SIC level results, but data on the two-digit SIC results are made available as exhibits. The
purpose of providing such detail is to enable a better idea of the quality of jobs that are likely to
be created and of the types of industries that are most likely to be affected by historic
rehabilitation activities.

The total economic impacts of the $350 million in historic rehabilitation spending are
summarized in exhibit 2.2 and detailed in exhibits 2.4 and 2.5:

Item 1 of section II in exhibit 2.4 shows how the $350 million translates into direct economic
effects nationwide. It creates 5,449 jobs (technically "job-years"), which produce $178 million
in labor income and $228 million in GDP. The difference between the initial investment ($350
million) and the direct GDP subsequently created by it ($228 million) implies that
historic building rehabilitation requires significant amounts of imported materials.

The indirect and induced effects of historic preservation activity require nationwide 9,809 more
jobs, and generate $287 million more in income and $477 million more in GDP in their support.
As a consequence, the total economic impact-the sum of the direct and indirect and induced
effects-of historic building rehabilitation is 15,258 jobs (5,449 + 9,809); $465 million in
income ($178 million + $287 million); and $728 million in GDP ($228 million + $477


Economic Impacts of Historic Preservation in Florida 11-11









million). Hence, the multiplier effects are greater than the direct effects: the national multipliers
are always substantially greater than 2.0.

According to exhibits 2.4 and 2.5, of the 15,258 jobs created annually, about 70 percent
(10,443 jobs) are created within the state. Florida retains nearly all of the jobs (4,434 of the
5,449) created directly by state-based historic rehabilitation activity. However, the indirect and
induced impacts of Florida historic rehabilitation activity tend to leak out of the state. Much of
this leakage occurs through the demands of Floridians for products manufactured elsewhere.

We can learn other interesting aspects of the impacts vhen we examine them by detailed
industry (see exhibits 2.4 and 2.5). For example, the Florida industry sectors that are stimulated
most by the preservation activity are as follows: construction, services, manufacturing, and retail
trade.


11-12 Economic Impacts of Historic Preservation in Florida


11-12


Economic Impacts of Historic Preservation in Florida












TABLE 2.4
National Economic and Tax Impacts of

Annual Florida Historic Building Rehabilitation Activity ($350.3 Million)
Economic Component
Employment Income Gross Domestic
(jobs) ($000) Product ($000)


L TOTAL EFFECTS (Direct and Indirect/Induced)*
Private
1. Agriculture 142 2,526.0 7,756.6
2. Agri. Serv., Forestry, & Fish 270 4,409.9 5,190.0
3. Mining 207 6,121.7 17,099.4
4. Construction 3,714 158,698.2 152,006.7
5. Manufacturing 2,683 111,550.7 138,170.6
6. Transport. & Public Utilities 759 32,762.7 59,633.9
7. Wholesale 633 32,020.3 45,826.2
8. Retail Trade 2,058 41,554.0 55,645.2
9. Finance, Ins., & Real Estate 1,675 73,645.4 128,685.7
10. Services 2,995 100,836.0 114,657.4
Private Subtotal 15,136 461,315.3 724,671.6
Public
11. Government 122 4,958.1 3,945
Total Effects (Private and Public) 15,258 465,330.4 728,616.4

IL DISTRIBUTION OF EFFECTS/MULTIPLIER
1. Direct Effects 5,449 178,388.0 227,754.0
2. Indirect and Induced Effects 9,809 286,942.3 477,075.8
3. Total Effects 15,258 465,330.4 728,616.4
4. Multipliers (3/1) 2.800 2.609 3.199

II. COMPOSITION OF GROSS STATE PRODUCT
1. Wages-Net of Taxes 408,721.6
2. Taxes
a. Local/State 69,989.1
b. Federal
General 46,738.4
Insurance Trusts 38,883.7
Federal Subtotal 85,622.1
c. Total taxes (2a+2b) 155,611.2
3. Profits, dividends, rents, and other 164,283.7
4. Total Gross State Product (1+2+3) 728,616.4


EFFECTS PER MILLION DOLLARS OF INITIAL EXPENDITURE
Employment (Jobs) 43.6
Income 1,328,290
Local/State Taxes 199,785
Gross State Product 2,079,842
Note: Detail may not sum to totals due to rounding.
*Terms:
Direct Effect (State)-the proportion of direct spending on goods and services produced.
Indirect Effects-the value of goods and services needed to support the provision of those direct economic effects.
Induced Effects-the value of goods and services needed by households that provide the direct and indirect labor.


Economic Impacts of Historic Preservation in Florida


11-13













TABLE 2.5

In-State Economic and Tax Impacts of

Annual Florida Historic Building Rehabilitation Activity ($350.3 Million)
Economic Component
Employment Income Gross Domestic
(jobs) ($000) Product ($000)


I. TOTAL EFFECTS (Direct and Indirect/Induced)*
Private
1. Agriculture
2. Agri. Serv., Forestry, & Fish
3. Mining
4. Construction
5. Manufacturing
6. Transport. & Public Utilities
7. Wholesale
8. Retail Trade
9. Finance, Ins., & Real Estate
10. Services
Private Subtotal
Public
11. Government
Total Effects (Private and Public)


IL DISTRIBUTION OF EFFECTS/MULTIPLIER
1. Direct Effects
2. Indirect and Induced Effects
3. Total Effects
4. Multipliers (3/1)


I1. COMPOSITION OF GROSS STATE PRODUCT
1. Wages-Net of Taxes
2. Taxes
a. Local/State
b. Federal
General
Insurance Trusts
Federal Subtotal
c. Total taxes (2a+2b)
3. Profits, dividends, rents, and other
4. Total Gross State Product (1+2+3)


16
127
57
2,666
1,654
477
423
1,700
1,168
2,107
10,395


523.5
1,737.0
2,581.0
94,572.6
55,735.7
17,353.5
17,099.2
26,185.7
38,362.1
61,029.0
315,179.4


47 1,627.1
10,443 316,806.4


4,434
6,008
10,443
2.355


155,217.6
161,588.8
316,806.4
2.041


EFFECTS PER MILLION DOLLARS OF INITIAL EXPENDITURE
Employment (Jobs)
Income
Local/State Taxes
Gross State Product
Note: Detail may not sum to totals due to rounding.
*Terms:
Direct Effect (State)--the proportion of direct spending on goods and services produced.
Indirect Effects-the value of goods and services needed to support the provision of those direct economic effects.
Induced Effects-the value of goods and services needed by households that provide the direct and indirect labor.


11-14 Economic Impacts of Historic Preservation in Florida


1,733.3
1,585.6
5,667.3
110,786.7
83,600.2
34,476.9
32,643.6
46,294.8
91,815.5
85,594.4
494,198.4


1,607
495,805.5



200,947.5
294,858.0
495,805.5
2.467



308,717.1


49,945.0


33,309.0
27,583.4
60,892.3
110,837.3
76,251.1
495,805.5



29.8
904,327
142,568
1,415,281








































































Economic Impacts of Historic Preservation in Florida 11-15



























































Economic Impacts of Historic Preservation in Florida Ill-1


CHAPTER THREE

Profile of, and Direct Economic Impacts from, Florida
Heritage Tourism








































































111-2 Economic Impacts of Historic Preservation in Florida









INTRODUCTION


Giant and growing, the U.S. travel and tourism industry has captured the attention of state and local
governments eager to bolster local economies and enhance community amenities.

The $400 billion travel industry-one of America's fastest-growing business segments-accounts for
approximately 6 percent of the nation's gross domestic product. Demographic, socioeconomic, and
lifestyle factors are affecting the industry's volume and its predominant component-the pleasure trip
market. Heritage tourism, one of the top reasons for pleasure travel, has become increasingly important
to travelers and the communities they visit and offers significant benefits to the community. Heritage
tourism can offset the costs of maintaining historic sites, help stimulate preservation efforts, and
perpetuate the sense of place that lends communities their unique character and identity. At the same
time, heritage tourism can realize important economic gains with respect to jobs, income, and tax
revenues.

This chapter analyzes heritage tourism in the nation and in Florida. First, an overview of the U.S. travel
market sets out a perspective on the market's size, features, trends, and impacts. Next, heritage
tourism's growth factors, benefits, and impacts are briefly surveyed at the national level. Finally, the
Florida travel market and data compiled on the features and economic impacts of Florida heritage
tourism are reviewed in detail.

SUMMARY OF FINDINGS

National Travel and Heritage Tourism

* There are numerous trends in the travel market fostering heritage tourism, including an increase in
travel for pleasure, as opposed to business, and a growing tendency toward shorter duration and
shorter distance trips. Baby boomers-large in number and with growing discretionary income-
also have a proclivity toward heritage tourism.

* While the precise scale of national heritage tourism is unavailable, it is by all accounts a significant
component of pleasure travel. Forty percent of families traveling on vacation stop at historic sites
(Schiller 1996), and museums and cultural events rank among Americans' favorite tourist attractions
(McDowell 1997).

* Numerous reports show heritage tourism's significant contribution to the economy. In Virginia, for
instance, historic preservation visitors were found to stay longer, visit twice as many places, and
spend on average more than two and one-half times more money in that state than other (non-
heritage) visitors.

Florida Travel and Heritage Tourism

* Travel and tourism are also significant to Florida's economic well-being. As an industry, Florida
tourism is one of the state's top three revenue producers.

* Enhanced heritage tourism in Florida would expand the overall travel market in the state. Heritage
tourism would increase overnight and touring vacations and would coax more visitors to Florida-
thus injecting the state with "imported" income. Moreover, Florida is rich in historic and other
interesting sites, which are core motivations for heritage travel.


Economic Impacts of Historic Preservation in Florida 111-3









* Heritage travel spending in Florida in 2000 is estimated to amount to $3.721 billion.

* The total impacts from the $3.721 billion in annual heritage tourism spending in Florida are shown
below.

EXHIBIT 3.1
Total Economic Impacts of the Annual Florida
Heritage Tourism Spending ($3.721 Billion Spent)

In Total
Florida (U.S.)
Jobs (person years) 107,607 140,789
Income ($millions) $2,314 million $3,419 million
GDP/GSP ($millions) $4,552 million $6,458 million
Total taxes ($millions) $1,093 million $1,440 million
Federal ($millions) $510 million $677 million
State/Local ($millions) $583 million $763 million
In-state wealth ($millions) $4,042 million
(GSP minus federal taxes)
aGDP/GSP = Gross Domestic Product/Gross State Product

NATIONAL TRAVEL AND TOURISM OVERVIEW

* In 1999, Americans took 1 billion domestic person-trips of 50 miles or more (U.S. Travel Data
Center 1999) away from home. On average, a third (32 percent) of U.S. households take at least
one trip each month.

* In 1999 travel expenditures in the U.S. totaled $526.6 billion ($451.6 billion from U.S. residents).
On average, travel parties spend $438 per trip, not including transportation to their destination.

* Domestic travel in the United States in 1999 was predominantly composed of pleasure trips (66
percent) and business trips (21 percent). The three main components of pleasure travel are visiting
friends and family (53 percent), outdoor recreation (16 percent), and entertainment (31 percent).

* Demographically, 1999 traveling households were apt to be married (64 percent); more than a third
(36 percent) had children at home and the average age of traveling household heads was 48. More
than half (57 percent) had completed college and four in ten work in professional or managerial
positions (43 percent). The greatest change in the demographic profile of travelers over the past five
years has been the rise in household income levels. Travelers' average annual household increased
from $50,700 in 1994 to $61,500 in 1999.

* Almost half (46 percent) of all U.S. resident trips involved a hotel/motel or bed & breakfast stay in
1999. The average pleasure trip lasted 3.4 nights, but among only overnight trips, average duration
is 4.2 nights.

* Travel expenditures create secondary impacts that magnify travel's contribution to the economy, as
shown in exhibit 3.4. This exhibit indicates the direct, the indirect and induced, and finally the total
economic impacts of travel in the United States in 1990.


111-4 Economic Impacts of Historic Preservation in Florida









* The most popular type of trip activity is shopping, included on a third (33 percent) of all person
trips. Shopping is followed by outdoor activities (17 percent), historical places/museums (14
percent), beaches (10 percent), national/state parks (10 percent), and cultural events/festivals (10
percent). As usual summer is the most popular travel season for pleasure travel (33 percent of all
person-trips) and winter is the least popular travel season (20 percent).

* There are a number of overall forces affecting travel and tourism in the United States that bear on
heritage tourism. These include:

1. A stimulus for travel growth is expected to come from the increasing numbers of pleasure trips.
More and more, consumers seem to prefer long weekend getaways instead of lengthier
vacations to more distant spots. Perhaps this reflects the rise in numbers of two-income
households with more money but less free time (Standard and Poors 1996). Overall travel data
also suggest an increasing trend toward shorter-duration trips-more daytrips and one-night
visits-and shorter-distance trips. Heritage tourism compares well with these trends.

2. Baby boomers are in or approaching their peak earning years and have discretionary income to
spend. They represent great potential for the pleasure travel market. "The one thing baby-
boomers have left to collect is experiences, and that's what travel and the arts offer." (Cook
1996)

In short, due to demographic reasons, such as the coming of age of baby boomers, and the evolving
nature of travel in the United States (e.g., increasing numbers of short pleasure trips), heritage tourism is
becoming a more potent force in the travel market as a whole (Gaede 1994).

EXHIBIT 3.2
Measures of Impact of Travelers on the U.S. Economy in 1990

Direct Indirect & Total Multiplier
Impact Measure Impact Induced Impact
Impact
Expenditures (Billions) $290.4 $407.3 $697.7 2.40
Eamings (Billions) $79.1 $117.6 $196.7 2.49
Employment (Millions) 5.2 5.3 10.5 1.92
Source: Impact of Travel on State Economies, 1990, U.S. Travel Data Center, October 1992


HERITAGE TOURISM IN THE UNITED STATES

Historic sites play a crucial role in fostering pleasure travel. As travel expert Arthur Frommer explained,
peoplepe travel in massive numbers to commune with the past. We all gain solace, pleasure and
inspiration from contact with our roots... [Y]ou cannot deny that seeing the cultural achievements of the
past, as enshrined in period buildings, is one of the major motivators for travel." (Frommer 1993)

Precise data on heritage tourism's share of the overall travel market is not available. But various surveys
report that historic site visits are increasingly included on family travel itineraries. Noting a 1993 Better
Homes and Garden Survey, economist Tim Schiller (1996) wrote:
Historic sites are growing in popularity as destinations for pleasure trips: 40 percent of families
traveling on vacation stop at historic sites. Several factors account for this increased interest. First,
such trips tend to be less expensive than other types of vacations or pleasure travel. Second, family


Economic Impacts of Historic Preservation in Florida 111-5









travel has increased, and often, historic sites are something of interest to all family members. Third,
vacationers, especially family groups, are more concerned about adding educational opportunities
to their vacation plans.

Heritage tourism's burgeoning growth has also garnered business and government support.
1. American Express Travel Related Services underwrote the 1993 publication of Getting Started:
How to Succeed in Heritage Tourism, by the National Trust for Historic Preservation. The
booklet is designed to help communities combine the preservation of historic, cultural, and natural
resources with tourism and help sustain local economies and community character.

2. Black heritage tourism is increasing exponentially, and African Americans have formed tour
companies that focus on black cultural heritage throughout the U.S. (American Vision 1994).

3. The United States Travel and Tourism Administration and the Minority Business Development
Agency began a joint economic initiative in 1990 to broaden awareness of minority historical and
cultural tourist destinations and to bolster minority-owned businesses, particularly in travel and
tourism. The multifaceted program is considered an initiative "to assist interested communities in
preserving and celebrating their cultural identities through tourism." (Doggett 1993)
The $16 billion spent on the restoration of American historic sites since 1976 has produced a critical
mass of saved resources in many communities (Travel Holiday 1996). As the number of preserved
historic sites and neighborhoods mounts, new tourism "product" becomes available for both domestic
and international visitors and the tourism-preservation cycle continues.

[T]he tourism industry needs more attractive, educational and authentic destinations to meet the
needs of growing numbers of domestic and international travelers; the preservation community
needs the political support and economic benefit that travelers provide to the sites and the
communities they visit. That support and the resulting economic benefit are catalysts for continued
protection, maintenance and promotion of these heritage areas. (Touring Historic Places.)

Recognition of heritage tourism's economic contribution (or potential) can be found throughout the
country.

* More than 85 regional heritage areas are in varying phases of development across the U.S. These
efforts reflect broad-based collaboration to protect a regional landscape, preserve historic
resources, enhance recreation, or stimulate economic development and regional strength through
tourism.

* An analysis of historic preservation's impact on Maryland's tourism industry found that visiting
historic sites is one of the most popular activities among travelers. But, historic properties,
responsible for generating a very large share of the state's tourism income, needed to be more
widely promoted.

* In Virginia, the impact of travel to historic sites was found to be crucial to the state's economy.

* Historic preservation visitors stay longer, visit twice as many places, and spend on average, over
two-and-one-half times more money in Virginia than do other visitors. The economic impact of
Colonial Williamsburg alone on Virginia's economy is over half a billion dollars a year. (Virginia
1996)


111-6 Economic Impacts of Historic Preservation in Florida









* A report on the economic impact of Wisconsin's heritage tourism program showed that visitors
spent over $215 million on admission fees alone to cultural/historic activities in 1995.

FLORIDA'S TRAVEL AND TOURISM MARKET OVERVIEW

* There were 71.5 million visitors to Florida during 2000. Domestic visitors made up 89 percent of
total visitors followed by 8 percent from overseas countries and 3 percent from Canada.

TABLE 3.3
Estimates of Visitors to Florida
Calendar Year 2000 (In Thousands of Person-Trips)

Year Domestic Overseas Canada Total % of Total
Air 30,847 6,026 1,248 38,121 53.3%
Non-Air 32,625 ** 719 33,344 46.7%
Total 63,472 6,026 1,967 71,465 100.0%
% of Total 88.8% 8.4% 2.8% 100.0%_
Source: Florida Visitor Study. 2000.
** Not available.


* Vacationing was the primary reason for coming to Florida for domestic visitors. Visiting
friends/relatives was the second most common reason for coming to Florida followed by business.

TABLE 3.4
Primary Purpose of Trip

Leisure Total Air Auto
General Vacation 38.5% 33.0% 43.6%
Visit Friends/Relatives 25.7% 25.8% 25.9%
Getaway Weekend 6.1% 4.3% 8.1%
Special Event 6.8% 6.2% 6.7%
Other Personal 4.5% 3.1% 5.1%
Business
Convention 3.8% 6.3% 2.1%
Seminar/Training 3.7% 5.5% 2.2%
Other Group Meetings 2.2% 4.4% 0.8%
Sales/Consulting 1.4% 2.7% 0.4%
Other 7.3% 8.5% 5.1%
Source: D.K. Shifflet and Associates as cited in Florida Visitors Study. 2000.
* The top activities domestic visitors enjoyed while in Florida were visiting the beaches, shopping and
going to a theme/amusement park. Visiting historical places/museums was a primary activity for 9.1
percent of domestic visitors.


Economic Impacts of Historic Preservation in Florida 111-7









TABLE 3.5
Primary Activities

Total Air Auto
Beaches 32.4% 30.8% 36.9%
Shopping 32.4% 34.8% 30.6%
Theme/Amusement Park 26.5% 30.5% 22.8%
Nightlife/Dancing 12.0% 13.2% 9.6%
Outdoor (hunt, fish, hike) 10.7% 10.2% 11.6%
Historical Places/Museums 9.1% 8.9% 9.4%
GolfTennis 6.3% 6.6% 6.5%
Cultural Events/Festivals 6.3% 6.4% 5.6%
National/State Park 5.1% 5.1% 5.3%
Sports Event 4.4% 4.5% 4.8%
Gambling 2.0% 1.7% 2.4%
Other 3.2% 3.1% 3.1%
Source: Travel Industry Association, TravelScope Data as cited in Florida Visitors Study. 2000.

* Average expenditures per person per day in 2000 totaled $125.10 for domestic visitors. Air visitor
expenditures per person per day totaled $165.90, while auto visitor expenditures totaled $94.50
per person per day.

* Taxable spending in the Tourism and Recreation category totaled $50.7 billion in 2000.

* From available Florida state data, we estimate that in 2000, heritage tourism spending in Florida
amounted to about $3.721 billion.

TOTAL ECONOMIC IMPACTS FROM HERITAGE TOURISM

The following section translates the $3.721 billion annual Florida heritage-attributed direct spending into
total economic benefits by applying the Preservation Economic Impact Model (PEIM). An overview of
the results is contained in exhibit 3.1. The total annual economic impacts from the $3.721 billion in
annual spending by Florida heritage travelers, encompassing both direct and multiplier effects, included,
at the national level, the following: 140,789 jobs; $3.419 billion in income; $6.458 billion in gross
domestic product; and $1.440 billion in taxes. Florida received a large share of these gains. On an
annual basis from the heritage tourism, Florida realized 107,607 jobs; $2.314 billion in income; $4.552
billion in gross state product; $1.093 billion in taxes (including $583 million in state-local taxes); and
annual in-state wealth creation of about $4.042 billion.

Finer-grained detail of state impacts by economic sector are also available. For example, of the
107,607 total state-level jobs derived from heritage tourism, most are to be found in service
establishments (30,068 jobs) and retail trade (51,794 jobs). Of the total $2.314 billion generated in
annual income, retail ($749 million), services ($653 million), and finance insurance and real estate ($317
million) benefit the most.


111-8 Economic Impacts of Historic Preservation in Florida













TABLE 3.6
National Economic and Tax Impacts of

Annual Florida Heritage Tourism Activity ($3.721 Billion)


Employment Income Gross Domestic
(jobs) ($000) Product ($000)


I. TOTAL EFFECTS (Direct and Indirect/Induced)*
Private
1. Agriculture 2,649 36,283.4 140,566.2
2. Agri. Serv., Forestry, & Fish 1,551 25,069.5 25,916.9
3. Mining 1,011 19,932.6 90,207.4
4. Construction 2,363 158,875.4 215,133.5
5. Manufacturing 15,340 487,043.5 814,689.4
6. Transport. & Public Utilities 6,063 231,953.0 527,580.7
7. Wholesale 5,224 215,011.7 370,432.7
8. Retail Trade 44,797 731,935.5 1,324,538.3
9. Finance, Ins., & Real Estate 14,295 507,464.3 1,437,732.3
10. Services 46,258 965,065.5 1,471,131.9
Private Subtotal 139,552 3,378,634.4 6,417,929.1
Public
11. Government 1,237 40,457.4 39,606.2
Total Effects (Private and Public) 140,789 3,419,091.8 6,457,535.3

II. DISTRIBUTION OF EFFECTS/MULTIPLIER
1. Direct Effects 60,904 1,027,433.5 1,876,645.5
2. Indirect and Induced Effects 79,885 2,391,658.3 4,580,889.8
3. Total Effects 140,789 3,419,091.8 6,457,535.3
4. Multipliers (3/1) 2.312 3.328 3.441

III. COMPOSITION OF GROSS STATE PRODUCT
1. Wages-Net of Taxes 3,324,248.4
2. Taxes
a. Local/State 763,012.7
b. Federal
General 409,756.7
Insurance Trusts 267,274.4
Federal Subtotal 677,031.1
c. Total taxes (2a+2b) 1,440,043.8
3. Profits, dividends, rents, and other 1,693,243.1
4. Total Gross State Product (1+2+3) 6,457,535.3


EFFECTS PER MILLION DOLLARS OF INITIAL EXPENDITURE
Employment (Jobs) 37.8
Income 918,864
Local/State Taxes 205,056
Gross State Product 1,735,430
Note: Detail may not sum to totals due to rounding.
*Terms:
Direct Effect (State)-the proportion of direct spending on goods and services produced.
Indirect Effects-the value of goods and services needed to support the provision of those direct economic effects.
Induced Effects-the value of goods and services needed by households that provide the direct and indirect labor.



Economic Impacts of Historic Preservation in Florida 111-9













TABLE 3.7

In-State Economic and Tax Impacts of

Annual Florida Heritage Tourism Activity ($3.721 Billion)


Employment Income Gross Domestic
(jobs) ($000) Product ($000)


I. TOTAL EFFECTS (Direct and Indirect/Induced)*
Private
1. Agriculture
2. Agri. Serv., Forestry, & Fish
3. Mining
4. Construction
5. Manufacturing
6. Transport. & Public Utilities
7. Wholesale
8. Retail Trade
9. Finance, Ins., & Real Estate
10. Services
Private Subtotal
Public
11. Government
Total Effects (Private and Public)


II. DISTRIBUTION OF EFFECTS/MULTIPLIER
1. Direct Effects
2. Indirect and Induced Effects
3. Total Effects
4. Multipliers (3/1)


III. COMPOSITION OF GROSS STATE PRODUCT
1. Wages-Net of Taxes
2. Taxes
a. Local/State
b. Federal
General
Insurance Trusts
Federal Subtotal
c. Total taxes (2a+2b)
3. Profits, dividends, rents, and other
4. Total Gross State Product (1+2+3)


179
566
19
558
7,365
3,445
3,221
51,794
9,903
30,068
107,118


5,450.1
7,094.6
5,412.5
57,741.3
245,507.7
128,339.7
129,514.8
748,511.1
316,777.1
652,639.9
2,296,988.8


490 16,864.3
107,607 2,313,853.0


60,246
47,362
107,607
1.786


1,019,579.8
1,294,273.2
2,313,853.0
2.269


EFFECTS PER MILLION DOLLARS OF INITIAL EXPENDITURE
Employment (Jobs)
Income
Local/State Taxes
Gross State Product
Note: Detail may not sum to totals due to rounding.


*Terms:
Direct Effect (State)-the proportion of direct spending on goods and services produced.
Indirect Effects-the value of goods and services needed to support the provision of those direct economic effects.
Induced Effects-the value of goods and services needed by households that provide the direct and indirect labor.


18,473.2
7,630.6
11,590.4
84,735.3
397,385.6
275,018.6
246,001.5
1,420,550.4
1,076,753.0
997,355.4
4,535,494.2


16,655.8
4,552,150.0



1,861,790.7
2,690,359.3
4,552,150.0
2.445



2,446,122.4


582,801.4


309,618.5
200,340.1
509,958.6
1,092,760.1
1,013,267.5
4,552,150.0



28.9
621,836
156,625
1,223,367


111-10


Economic Impacts of Historic Preservation in Florida

























CHAPTER FOUR


Economic Impacts of Historic Preservation in Florida IV-1


Profile of, and Economic Impacts from,
the Florida Main Street Program








































































IV-2 Economic Impacts of Historic Preservation in Florida









INTRODUCTION AND SUMMARY


This chapter examines the contributions of the Florida Main Street Program. It begins
with an overview of the national Main Street effort. This is followed by a profile of
the Florida Main Street initiative and details of its direct investment as well as its total
economic impacts. The analysis is for the fiscal year (FY) 2000-01, which, when this
study commenced, was the last annual period for which Florida Main Street Program
information was fully available. The results of the analysis are summarized below:

* The State of Florida has an active Main Street program with 47 communities
participating (e.g., Clermont, Dade City, Ft Myers, Lake Wales, Palm Harbor,
Vero Beach, and Ybor City).

* In FY 1999, the Florida Main Street Program resulted in the following total
investment.

EXHIBIT 4.1
Florida Main Street Program (FY 2000-01)


Component
Rehabilitation $27.3 million
New construction $45.3 million
Total private and public investment $72.6 million

Number of new jobs 1,267


* If we net out rehabilitation and other preservation outlays previously tallied, such
as spending by heritage tourists in the Main Street communities (since we want
to avoid double counting), and make other adjustments, the FY 2000-01 Florida
Main Street investment/output is roughly $63.6 million of construction plus retail
job benefits.

* The total national economic impacts, including both direct and multiplier effects,
from the FY 2000-01 Florida Main Street investment included a gain of 4,370
jobs, $116 million in income, $187 million in gross domestic product, and $43
million in taxes. The in-state Florida gains were roughly 50 to 80 percent of the
above-cited figures (see below) with in-state wealth creation of $116 million.


Economic Impacts of Historic Preservation in Florida IV-3









EXHIBIT 4.2
Total Economic Impacts of the Annual Net Florida Main Street Investment

In Total
Florida (U.S.)
Jobs (person years) 3,202 4,370
Income ($million) $81 million $116 million
GDP/GSPb ($million) $132 million $187 million
Total taxes ($million) $31 million $43 million
Federal ($million) $16 million $22 million
State/Local ($million) $15 million $21 million
In-state wealth ($million) $116 million
(GSP minus federal taxes)
bGDP/GSP=Gross Domestic Product/Gross State Product.


THE MAIN STREET PROGRAM: NATIONAL OVERVIEW

In 1980, the National Trust for Historic Preservation established the National Main
Street Center (NMSC). With the goal of revitalizing downtown areas and
neighborhood commercial districts across the United States, the NMSC set up the
Main Street Program. The program focuses on improving downtown business
districts, primarily through historic preservation themes. All Main Street Programs
are locally driven and funded, though advice from the NMSC is available. In the past
twenty years, almost 2,000 communities and more than forty states have used the
Main Street approach to invigorate their downtown areas. The results have produced
both economic and social benefits.

Main Street programs are initiated by concerned citizens such as business and
property owners or civic and government officials. Public and private community
leaders are then called upon to organize the program, raise funds, and hire a Main
Street Manager. They also create committees and a board of directors to carry out the
work. Once these entities are in place, a long-term strategy can be formed based on
local issues and concerns. Each community's overall strategy, however, is based on
the Main Street Four Point Approach. The approach stresses looking at four areas in
order to encourage successful downtown revitalization. These four components are:

* Design: Enhancing the visual appearance of the downtown.

* Organization: Building consensus and cooperation among the groups and
members that have a concern with the downtown. Groups in both the public and
private sectors must collaborate.

* Promotion: Marketing the improved downtown to the public to attract customers,
investors, developers, and new businesses.

* Economic Restructuring: Strengthening the downtown's existing economic assets,
while expanding its economic base to meet new opportunities.


IV-4 Economic Impacts of Historic Preservation in Florida









The implementation of the Main Street Four Point Approach is based on eight
principles known as the Main Street Philosophy. The principles are:

* Comprehensive: A successful revitalization must have a comprehensive long-term
approach.

* Incremental: Begin with small projects, which will show progress, then move
onto larger ones.

* Self-Help: Local leaders are the key to making the projects successful.

* Public/Private Partnership: Both the public and private sectors must contribute to
the program.

* Identifying and Capitalizing on Existing Assets: The existing and unique local
assets of a community should be the solid foundation for its program.

* Quality: All elements of the program must be focused on quality.

* Change: Changes in attitude and practice must be made in order to improve the
public opinion of the downtown.

* Action-Oriented: Frequent and visible changes will help to change the perception
of the downtown, serving as reminders that revitalization is under way.

NMSC provides informational material, in a variety of formats, to assist communities.
Often it will provide technical assistance to state programs. It also sponsors a national
conference, which provides training. Sometimes, NMSC will provide specialized
assistance to a community for a fee.

Downtown revitalization afforded through the Main Street Program is important and
worthwhile for many reasons, both tangible and intangible. The most important
reasons include:

* Business is strengthened and stabilized: profits are kept in town, local family-
owned businesses are supported, and tax revenues increase.

* Main Street districts often become tourist attractions, which draw revenue.

* Infrastructure is improved.

* Jobs are created through construction done during renovations.

* Community-eroding sprawl is controlled.


Economic Impacts of Historic Preservation in Florida IV-5









* A civic forum is created, which develops a sense of community through parades
and celebrations held on Main Street.

* Main Street is a symbol of economic health, pride, and community history.

The Main Street Program has been extensively applied. From 1980 to 2000, the total
amount of public and private reinvestment in Main Street communities has been
$15.2 billion. According to NMSC, 206,000 new jobs have been created as well as
52,000 new businesses and 79,000 building rehabilitations. On average, for every $1
spent, $39 has been reinvested.

THE FLORIDA MAIN STREET PROGRAM

In numerous small Florida cities, downtown are in a state of decline. The
automobile, suburban housing, and the growth of local and regional shopping centers
and malls have greatly reduced the traditional role of these communities' downtown
as the principal center of economic activity. Many government programs, such as
urban renewal and various city beautification programs, have failed to halt the decline
of Florida's main commercial corridors.

The Florida Main Street Program attempts to spur revitalization by capitalizing on the
unique character of the downtown coupled with development of progressive
marketing and management techniques. The Florida Main Street Program is based on
the Main Street Four Point Approach of the NMSC. As noted, the NMSC was
established in 1980 by the National Trust for Historic Preservation; the Florida Main
Street Program has been in existence since the mid-1980s.

In the late 1980s and early 1990s, a grassroots effort by local citizens began a small
town renaissance in Florida.

A statewide Florida Main Street program was inaugurated in 1985 to aid towns with
populations between five thousand and fifty thousand-with DeLand in central
Florida as one of its first selections. With the state acting as an advisor, many
communities began to revitalize their historic or traditional commercial areas.

Each Florida community had to come up with its own plan to "bring back" its
downtown. Community involvement was stressed. The qualifications were strict, and
very few towns were selected as Main Street cities in the early years of the program.
Some 80 Florida cities have benefited from the Florida Main Street Program since
1985. Among the business districts that have been spruced up and revitalized are
Crestview, Marianna, Milton, and Panama City in the panhandle; Venice, Fort Myers,
and Tarpon Springs on the Gulf coast: Clermont, Sanford, Dunellon, and Wauchula in
central Florida; Homestead and Miami's Overtown neighborhood in the south: and
Fort Pierce, Daytona Beach, and DeLand along the Atlantic coast.


IV-6 Economic Impacts of Historic Preservation in Florida









DATA MAINTAINED BY THE NATIONAL MAIN STREET PROGRAM

Every month, communities participating in a Main Street program are supposed to
compile a series of data items (e.g., Project Status Information Sheets and a Reinvestment
Summary Sheet) including a "Monthly Report." The Monthly Report is divided into five
sections. The first section asks for feedback in the format known as the Main Street Four
Point Approach, as designed by the NMSC; the community must report on the month's
accomplishments in organization, promotion, quality design, and economic restructuring.
The second section asks the community to discuss any "brick walls" (obstacles) that the
program has encountered. Section three requests a list of the previous month's completed
meetings and the following month's planned meetings. Section four focuses on goals and
methodology-what does the community plan to accomplish next month? The last
section asks if the community has any questions or needs that it would like addressed by
the Main Street Program staff.

The Project Status Information Sheets comprise Project Status, Acquisitions, Business
Starts, Business Failures, and Business Rehabilitation sheets. The Project Status sheet
displays the proposed, pending, and completed work in the Main Street District. The
Acquisitions sheet tracks the buying and selling of buildings. The Business Starts sheet
shows new businesses that have opened, as well as the expansion or relocation of existing
businesses to the Main Street District. If any business in the Main Street District closes
down, it is included in the Business Failures sheet. The Building Rehabilitation sheet
records substantial building improvement projects. Since the purpose of these sheets is to
track the work and progress of the local program, they are updated frequently. All of the
sheets are maintained by the local Main Street Manager.

The Private Sector Reinvestment Summary Sheet, which builds from the Project
Status Information Sheets, comprises seven categories, all of which contain
cumulative totals reflecting results since the inception of the community's local Main
Street Program. Twice a year the figures compiled in the Reinvestment Summary are
included in an informational packet which the specific state Main Street Program
distributes throughout the state and also submits to NMSC. The categories of data in
the Reinvestment Summary are:

Of the three databases mentioned above-Monthly Report, Project Status, and
Reinvestment Summary-the last contains the most complete information for
ascertaining the total economic impacts of the Main Street Program, encompassing
both direct and multiplier effects.

The reinvestment outcomes for Florida Main Street are detailed in Exhibit 4.3 and are
summarized below.


Economic Impacts of Historic Preservation in Florida IV-7









EXHIBIT 4.3
Florida Main Street Program: Reinvestment Statistics


Cumulative
FY 2000-01 (Mid-1980s-2001)
$ Millions $ Millions

Rehab 27.3 85.4
New Construction 45.3 195.9
Total Private and Public Investment 72.6 281.3

New Jobs 1,584 jobs 7,043 jobs
Source: Florida Main Street Program


DIRECT ECONOMIC IMPACTS
OF THE FLORIDA MAIN STREET PROGRAM

The reinvestment results summarized above comprise the direct economic impacts of the
Florida Main Street program. These data allow us to translate the direct Main Street
investment into total economic benefits, including multiplier effects. In doing this
calculation, we focus on the impacts for FY2000-01.

We must make an adjustment to the data, however, to avoid double counting. This study
previously calculated the average level of historic rehabilitation occurring in Florida, that
is, the renovations taking place in properties on, or eligible for, historic designation.
Some of the Florida Main Street rehabilitation is likely taking place in such designated
properties; while we do not know this amount for certain, we estimate this would be 33
percent, that is, that one-third percent of the Florida Main Street Program-counted
rehabilitation is effected in designated or eligible properties. (This is a very gross
estimate.) The net Main Street rehabilitation, that is, the amount over and above that
tallied in the rehabilitation chapter, is therefore 80 percent of the FY2000-01 Florida
Main Street rehabilitation, or about $18.3 million ($27.3 million x .75).

We similarly have to adjust the net jobs credited to Main Street since these include
employment associated with heritage tourism (e.g., a Florida heritage traveler visiting a
Florida Main Street area and patronizing a store manned by an employee credited to the
Florida Main Street Program). If we didn't adjust, we would then be double counting.
While we do not know the exact overlap between Florida Main Street jobs and jobs
associated with Florida heritage tourism (the latter counted in Chapter Three), we
estimate this overlap at 20 percent. (Again, this is a very gross estimate.) Therefore to
avoid double counting, we will credit 80 percent of the Florida Main Street-generated
jobs as net of the tourism-associated employment, or 1,267 jobs (1,584 jobs x .8).


IV-8 Economic Impacts of Historic Preservation in Florida









In summary, the net additional annual direct economic gains from the Florida Main Street
Program (using FY2000-01 figures) include:

$18.3 million of rehabilitation
45.3 million of new construction
63.6 million
and

1,267 net jobs (Since the 1,267 net jobs will contain many part-time retail
positions, we count these 1,267 jobs as 850 full-time equivalent [FTE] positions.)

TOTAL ECONOMIC IMPACTS
FROM THE FLORIDA MAIN STREET PROGRAM

The next step is to translate the above-cited direct effects into total economic benefits by
applying the PEIM. The total economic impacts of the Florida Main Street Program
investment just noted are summarized below and detailed in Exhibits 4.4 and 4.5. For
example, of the 4,370 national jobs created annually, about 73 percent (3,202 jobs) are
created within the state. Florida retains nearly all of the jobs (1,660 of the 1,937) created
directly by state-based Main Street activity. However, the indirect and induced impacts of
Florida Main Street activity tend to "leak out of the state." This finding is not surprising,
in light of Florida being only one state in the national economy.

We can learn other interesting aspects of the impacts of Main Street investment by
examining them by industry. For example, the largest number cf in-state Florida jobs
fostered by Main Street investment is in the retail sector (1,165 of 3,202 jobs). Other
sectors gaining relatively larger number of jobs, in Florida from Main Street are
construction, services, and manufacturing.

In summary, the economic impacts estimated through the PEIM models of the Florida
and the U.S. economies reveal that the annual Main Street activity in Florida generates
valuable employment and attendant income and production benefits.


Economic Impacts of Historic Preservation in Florida IV-9











TABLE 4.4

National Economic and Tax Impacts of Annual Florida Main Street

Preservation Activity ($63.6 Million + 850 Retail Jobs)


Economic Component
Employment Income Gross Domestic
(jobs) ($000) Product ($000)
I. TOTAL EFFECTS (Direct and Indirect/Induced)*
Private
1. Agriculture 37 534.9 2,052.6
2. Agri. Serv., Forestry, & Fish 35 585.4 647.7
3. Mining 37 904.9 3,214.9
4. Construction 810 26,312.6 30,829.2
5. Manufacturing 624 20,856.6 31,769.4
6. Transport. & Public Utilities 178 6,755.7 14,846.3
7. Wholesale 161 6,728.9 11,738.9
8. Retail Trade 1,356 20,822.3 33,073.3
9. Finance, Ins., & Real Estate 424 15,009.2 33,963.2
10. Services 675 16,958.8 23,666.7
Private Subtotal 4,339 115,469.3 185,802.4
Public
11. Government 31 1,029.3 1,011.0
Total Effects (Private and Public) 4,370 116,498.6 186,813.4

II. DISTRIBUTION OF EFFECTS/MULTIPLIER
1. Direct Effects 1,937 46,391.2 63,294.3
2. Indirect and Induced Effects 2,433 70,107.5 123,519.1
3. TotalEffects 4,370 116,498.6 186,813.4
4. Multipliers (3/1) 2.256 2.511 2.952

III. COMPOSITION OF GROSS STATE PRODUCT
1. Wages-Net of Taxes 110,685.7
2. Taxes
a. Local/State 21,211.3
b. Federal
General 12,530.0
Insurance Trusts 9,779.7
Federal Subtotal 22,309.6
c. Total taxes (2a+2b) 43,520.9
3. Profits, dividends, rents, and other 32,606.7
4. Total Gross State Product (1+2+3) 186,813.4

EFFECTS PER MILLION DOLLARS OF INITIAL EXPENDITURE
Employment (Jobs) 49.6
Income 1,322,219
Local/State Taxes 240,736
Gross State Product 2,120,229
Note: Detail may not sum to totals due to rounding.
*Terms:
Direct Effect (State)-the proportion of direct spending on goods and services produced.
Indirect Effects-the value of goods and services needed to support the provision of those direct economic effects.
Induced Effects-the value of goods and services needed by households that provide the direct and indirect labor.


IV-1 0


Economic Impacts of Historic Preservation in Florida











TABLE 4.5
In-State Economic and Tax Impacts of Annual Florida Main Street
Preservation Activity ($63.6 Million + 850 Retail Jobs)

Economic Component
Employment Income Gross Domestic
(jobs) ($000) Product ($000)
I. TOTAL EFFECTS (Direct and Indirect/Induced)*
Private
1. Agriculture 4 111.3 372.C
2. Agri. Serv., Forestry, & Fish 15 190.0 185.5
3. Mining 5 308.8 681.3
4. Construction 625 19,992.5 23,475.6
5. Manufacturing 389 13,091.4 19,045.6
6. Transport. & Public Utilities 113 4,166.4 8,637.1
7. Wholesale 110 4,453.1 8,505.7
8. Retail Trade 1,165 16,448.9 28,559.5
9. Finance, Ins., & Real Estate 304 9,969.7 25,183.C
10. Services 461 11,885.1 16,666.3
Private Subtotal 3,190 80,617.2 131,311.9
Public
11. Government 13 439.5 434.2
Total Effects (Private and Public) 3,202 81,056.7 131,746.1

II. DISTRIBUTION OF EFFECTS/MULTIPLIER
1. Direct Effects 1,660 39,509.4 54,539.7
2. Indirect and Induced Effects 1,542 41,547.3 77,206.4
3. Total Effects 3,202 81,056.7 131,746.1
4. Multipliers (3/1) 1.929 2.052 2.416

III. COMPOSITION OF GROSS STATE PRODUCT
1. Wages--Net of Taxes 79,600.C
2. Taxes
a. Local/State 15,412.1
b. Federal
General 9,027.4
Insurance Trusts 7,052.4
Federal Subtotal 16,079.S
c. Total taxes (2a+2b) 31,491.c
3. Profits, dividends, rents, and other 20,654.2
4. Total Gross State Product (1+2+3) 131,746.1

EFFECTS PER MILLION DOLLARS OF INITIAL EXPENDITURE
Employment (Jobs) 35.9
Income 909,727
Local/State Taxes 172,975
Gross State Product 1,478,631
Note: Detail may not sum to totals due to rounding.
*Terms:
Direct Effect (State)-the proportion of direct spending on goods and services produced.
Indirect Effects-the value of goods and services needed to support the provision of those direct economic effects.
Induced Effects-the value of goods and services needed by households that provide the direct and indirect labor.


Economic Impacts of Historic Preservation in Florida


IV-1 1








































































IV-1 2 Economic Impacts of Historic Preservation in Florida




























































Economic Impacts of Historic Preservation in Florida V-1


CHAPTER FIVE

Economic Impacts from Florida Historical Museums








































































V-2 Economic Impacts of Historic Preservation in Florida









INTRODUCTION AND SUMMARY


The Florida Association of Museums reports the following information for 2001.

Historical All Museums
Number of Museums 183 356
Staffing 1,610 4,703
Total Operating Budgets $67,835,646 $204,380,983
Visitors 9,778,248 22,890,006

This chapter summarizes the $68 million expenditure by Florida historical museums into total
economic effects. We subtract from the $68 million outlay, estimated expenditures for museum
capital improvements and visitor-supported revenues as there have already been counted in
previous chapters (chapter three-rehabilitation and chapter four-heritage tourism). That
leaves a net of an estimated $58 million dollars, which has the following effects.

EXHIBIT 5.1
Annual Total Economic Impacts
of the Florida Historic Museums Net Spendingt ($58 Million)

In Total
Florida (U.S.)
Jobs (person years) 1,989 3,588
Income $54 million $98 million
GDP/GSP $86 million $143 million
Total Taxes $19 million $31 million
Federal $10 million $17 million
State/Local $9 million $14 million
In- State Wealth $78 million
(GSP Minus Federal Taxes)
GDP/GSP=Gross domestic product/Gross state product
Net of outlays for capital purposes and visitor-supported revenues


More detailed impacts are shown in exhibit 5.2 and 5.3. For example, of the $86 million of
Florida gross state product generated by the historical museums, $29 million benefits the
services sector and $23 million benefits the finance, insurance, and real-estate sector.


Economic Impacts of Historic Preservation in Florida V-3











EXHIBIT 5.2
National Economic and Tax Impacts of
Annual Florida Historic Museum Operations ($58 Million)
Economic Component
Employment Income Gross Domestic
(jobs) ($000) Product ($000)

L TOTAL EFFECTS (Direct and Indirect/Induced)*
Private
1. Agriculture 31 454.6 1,655.3
2. Agri. Serv., Forestry, & Fish 23 373.3 388.5
3. Mining 15 317.3 1,381.3
4. Construction 86 4,102.0 5,334.6
5. Manufacturing 329 10,750.8 16,655.3
6. Transport. & Public Utilities 133 5,166.3 11,075.0
7. Wholesale 91 3,737.3 6,547.7
8. Retail Trade 410 6,571.4 10,709.0
9. Finance, Ins., & Real Estate 317 11,500.9 30,131.2
10. Services 2,130 54,535.8 58,414.2
Private Subtotal 3,565 97,509.6 142,292.1
Public
11. Government 23 746.5 732.0
Total Effects (Private and Public) 3,588 98,256.1 143,024.1

II DISTRIBUTION OF EFFECTS/MULTIPLIER
1. Direct Effects 1,712 43,446.3 44,554.1
2. Indirect and Induced Effects 1,876 54,809.8 98,470.0
3. Total Effects 3,588 98,256.1 143,024.1
4. Multipliers (3/1) 2.096 2.262 3.210

III COMPOSITION OF GROSS STATE PRODUCT
1. Wages-Net of Taxes 91,430.8
2. Taxes
a. Local/State 14,305.8
b. Federal
General 9,180.4
Insurance Trusts 7,444.3
Federal Subtotal 16,624.6
c. Total taxes (2a+2b) 30,930.4
3. Profits, dividends, rents, and other 20,662.8
4. Total Gross State Product (1+2+3) 143,024.1

EFFECTS PER MILLION DOLLARS OF INITIAL EXPENDITURE
Employment (Jobs) 61.4
Income 1,694,115
Local/State Taxes 246,652
Gross State Product 2,465,933
Note: Detail may not sum to totals due to rounding.
*Terms:
Direct Effect (State)-the proportion of direct spending on goods and services produced.
Indirect Effects-the value of goods and services needed to support the provision of those direct economic effects.
Induced Effects-the value of goods and services needed by households that provide the direct and indirect labor.


V-4 Economic Impacts of Historic Preservation in Florida











EXHIBIT 5.3
In-state Economic and Tax Impacts of
Annual Florida Historic Museum Operations ($58 Million)
Economic Component
Employment Income Gross Domestic
(jobs) ($000) Product ($000)


I. TOTAL EFFECTS (Direct and Indirect/Induced)*
Private
1. Agriculture
2. Agri. Serv., Forestry, & Fish
3. Mining
4. Construction
5. Manufacturing
6. Transport. & Public Utilities
7. Wholesale
8. Retail Trade
9. Finance, Ins., & Real Estate
10. Services
Private Subtotal
Public
11. Government
Total Effects (Private and Public)

II DISTRIBUTION OF EFFECTS/MULTIPLIER
1. Direct Effects
2. Indirect and Induced Effects
3. Total Effects
4. Multipliers (3/1)

lI. COMPOSITION OF GROSS STATE PRODUCT
1. Wages-Net of Taxes
2. Taxes
a. Local/State
b. Federal
General
Insurance Trusts
Federal Subtotal
c. Total taxes (2a+2b)
3. Profits, dividends, rents, and other
4. Total Gross State Product (1+2+3)


2
9
0
43
220
87
63
343
227
986
1,980


74.2
113.5
103.6
2,076.7
7,278.3
3,360.2
2,511.0
5,172.4
7,661.4
25,184.6
53,535.9


9 321.2
1,989 53,857.0


817
1,172
1,989
2.435


20,838.5
33,018.5
53,857.0
2.584


EFFECTS PER MILLION DOLLARS OF INITIAL EXPENDITURE
Employment (Jobs)
Income
Local/State Taxes
Gross State Product
Note: Detail may not sum to totals due to rounding.
*Terms:
Direct Effect (State)-the proportion of direct spending on goods and services produced.
Indirect Effects-the value of goods and services needed to support the provision of those direct economic effects.
Induced Effects-the value of goods and services needed by households that provide the direct and indirect labor.


Economic Impacts of Historic Preservation in Florida V-5


244.2
114.4
224.7
2,789.7
10,794.5
6,630.2
4,764.9
9,040.1
22,984.8
28,286.7
85,874.1

317.1
86,191.2


21,943.3
64,247.9
86,191.2
3.928


71,976.0

8,991.9

5,734.5
4,668.9
10,403.4
19,395.4
-5,180.2
86,191.2


34.3
928,593
155,038
1,486,093








































































V-6 Economic Impacts of Historic Preservation in Florida

























CHAPTER SIX


Economic Impacts of Historic Preservation in Florida


Profile of, and Economic Impacts from,
the Florida Historic Preservation Grants-in-Aid Program











































































VI-2 Economic Impacts ofHistoric Preservation in Florida









INTRODUCTION AND SUMMARY


This chapter examines the economic impact of the Florida Historic Preservation Grants-in-Aid
(FHPG) Program. From FY 1996 through FY 2001, the FHPG awarded a total of about $97
million. The FY 1996-2001 match to that investment was about $236 million. Therefore, from
FY 1996 through 2001, the FHPG helped spur about $333 million in historic preservation outlay
(for capital improvement purposes).

Economic Impacts of the FHPG

The FHPG has economic effects from both the historic rehabilitation (i.e., construction) it
engenders and from the historic tourism it supports (i.e., renovating Florida's historic resources
fosters visitation from history-oriented tourists). We examine only the construction-related
benefits.

FHPG Historic Rehabilitation Economic Impacts (exhibit 6.2)

* The total national economic impacts from the $3331 million cumulative FHPG historic
rehabilitation investment included the following: 15,233 person-years of work; $465 million
in income; $727 million in gross domestic product; and $154 million in taxes. From the
cumulative FHPG historic rehabilitation, the state of Florida garnered 10,452 person-years of
work; $317 million in income; $495 million in gross state product; $111 million in total taxes
(including $50 million in Florida state and local taxes); and $434 million in in-state wealth.


EXHIBIT 6.1
Florida Historic Preservation Grants-in-Aid (FHPG) Activity
(as of August 2001)


FY1996-2001


FHPG Award and
FY FHPG Award FHPG Match Match
1996 $14,040,860 $38,423,386 $52,464,246
1997 $14,566,352 $62,362,913 76,929,265
1998 $14,428,676 $42,409,184 56,837,860
1999 $16,478,356 $28,059,784 44,538,140
2000 $17,827,189 $34,183,199 52,010,388
2001 $19,635,082 $29,919,401 49,554,483
Total $96,976,514 $236,357,867 $332,334,381


'Treated as $350 million in present value terms.

Economic Impacts ofHistoric Preservation in Florida


VI-3









EXHIBIT 6.2
Total Economic Impacts of the Cumulative
FHPG-Supported Historic Rehabilitation (FY 1996-2001)

In Total
Florida (U.S.)
Jobs (person-years of work) 10,452 15,233
Income ($million) $317 million $465 million
GDP/GSP ($million) $495 million $727 million
Total taxes $111 million $154 million
Federal ($million) $61 million $85 million
State/Local ($million) $50 million $69 million
In-State Wealth $434 million -
(GSP Minus Federal Taxes)
Note: GDP/GSP = Gross Domestic Product/Gross State Product

* The economic benefits from the FHPG-supported historic rehabilitation are enjoyed
throughout the national and Florida economies. For instance, of the $495 million in gross
Florida state product, the construction, services and manufacturing sectors of the Florida
economy gained $111 million, $86 million, and $85 million, respectively.

BACKGROUND TO THE FLORIDA
HISTORIC PRESERVATION GRANTS-IN-AID PROGRAM

The Division of Historical Resources within the Florida Department of State administers various
historic preservation assistance programs. We focus in this chapter on the following major aids
which are largely used for capital improvement purposes.2

Historic Preservation Grants: This program awards $2 million annually in basic matching grant
assistance for the restoration of historic structures, archaeological excavations, recording of the
historic and archaeological sites and historic preservation education projects.

Special Category Grants: This program funds major historic building restoration, archaeological
excavations, and museum exhibit projects on the human occupation of Florida. Funding is
dependent on an annual appropriation of funds by the Florida Legislature. This amount has
averaged around $10 million in recent years, and typical grants have ranged from $50,000 to
$250,000.

ECONOMIC IMPACTS OF THE FHPG

Florida offers one of the nation's most successful programs to foster historic rehabilitation
through the FHPG, As noted, from FY 1996 through FY 2001, historic rehabilitation projects
amounting to about $333 million have been completed under the FHPG. The cumulative state
cost for this effort has been about $97 million.


2We do not include all aid from the Division of Historical Resources, such as museum grants for basic operating
expenses.


Economic Impacts ofHistoric Preservation in Florida


VI-4









The $333 million3 in historic rehabilitation activity fostered by the FHPG generates additional
secondary economic activity and benefits. These economic impacts, which are added through
indirect and induced consequences, are calculated by applying the Preservation Economic Impact
Model to the $333 million in total direct historic rehabilitation activity.

The detail of this $333 million direct rehabilitation expenditure plus the multiplier effects is
detailed in exhibits 6.3 (national) and exhibit 6.4 (in-state) and summarized in exhibit 6.2.

The in-state benefits are of particular interest here because the FHPG is a state-level investment.
From this perspective, it is clear that Florida benefits significantly from the FHPG's rehab
support. The $97 million in grants returns about $496 million in wealth to the state-a good rate
of return for any public infrastructure investment. Much of this $496 million ($317 million, or 64
percent) is income. Further, it creates nearly 11,000 person years of work in the state and adds
millions in gross state product.

The benefits from the FHPG's rehab support are felt throughout the economy. For instance, of
the $317 million in Florida income, the construction; services; manufacturing; and finance,
insurance, and real estate (FIRE) industries in Florida garnered $95 million, $61 million, $56
million, and $38 million respectively (exhibit 6.4).































3Treated as $350 million in present value terms.


Economic Impacts of Historic Preservation in Florida


VI-5










EXHIBIT 6.3
National Economic and Tax Impacts of
Cumulative Florida Historic Pre servation Grants-in-Aid ($350 Million)
Economic Component
Employment Income Gross Domestic
(jobs) ($000) Product ($000)
I. TOTAL EFFECTS (Direct and Indirect/Induced)*
Private
1. Agriculture 141 2,067.1 7,730.8
2. Agri. Serv., Forestry, & Fish 268 4,503.8 5,059.0
3. Mining 201 5,242.1 16,533.4
4. Construction 3,725 130,101.6 152,128.8
5. Manufacturing 2,691 89,751.6 139,255.2
6. Transport. & Public Utilities 739 27,672.8 58,867.1
7. Wholesale 628 26,123.1 45,444.8
8. Retail Trade 2,057 34,009.6 55,619.8
9. Finance, Ins., & Real Estate 1,675 59,884.6 128,553.3
10. Services 2,986 81,557.2 114,185.5
Private Subtotal 15,110 460,913.5 723,377.8
Public
11. Government 123 4,024.6 3,953.8
Total Effects (Private and Public) 15,233 464,938.1 727,331.6

II. DISTRIBUTION OF EFFECTS/MULTIPLIER
1. Direct Effects 5,139 177,890.4 229,054.5
2. Indirect and Induced Effects 10,094 287,047.7 498,277.1
3. Total Effects 15,233 464,938.1 727,331.6
4. Multipliers (3/1) 2.964 2.614 3.175

III. COMPOSITION OF GROSS STATE PRODUCT
1. Wages-Net of Taxes 408,902.6
2. Taxes
a. Local/State 69,405.1
b. Federal
General 46,333.9
Insurance Trusts 38,407.6
Federal Subtotal 84,741.5
c. Total taxes (2a+2b) 154,146.6
3. Profits, dividends, rents, and other 164,282.4
4. Total Gross State Product (1+2+3) 727,331.6

EFFECTS PER MILLION DOLLARS OF INITIAL EXPENDITURE
Employment (Jobs) 43.5
Income 1,328,395
Local/State Taxes 198,130
Gross State Product 2,076,311
Note: Detail may not sum to totals due to rounding.
*Terms:
Direct Effect (State)--the proportion of direct spending on goods and services produced.
Indirect Effects-the value of goods and services needed to support the provision of those direct economic effects.
Induced Effects-the value of goods and services needed by households that provide the direct and indirect labor.


Economic Impacts of Historic Preservation in Florida


VI-6










EXHIBIT 6.4
In-State Economic and Tax Impacts of

Annual Florida Historic Building Rehabilitation Grants ($350.3 Million)
Economic Component
Employment Income Gross Domestic
(jobs) ($000) Product ($000)

I TOTAL EFFECTS (Direct and Indirect/Induced)*
Private
1. Agriculture 16 523.5 1,733.3
2. Agri. Serv., Forestry, & Fish 127 1,737.0 1,585.6
3. Mining 57 2,581.0 5,667.3
4. Construction 2,666 94,572.6 110,786.7
5. Manufacturing 1,654 55,735.7 83,600.2
6. Transport. & Public Utilities 477 17,353.5 34,476.5
7. Wholesale 423 17,099.2 32,643.6
8. Retail Trade 1,700 26,185.7 46,294.S
9. Finance, Ins., & Real Estate 1,168 38,362.1 91,815.5
10. Services 2,107 61,029.0 85,594.4
Private Subtotal 10,395 315,179.4 494,198.4
Public
11. Government 47 1,627.1 1,607
Total Effects (Private and Public) 10,443 316,806.4 495,805.5

II. DISTRIBUTION OF EFFECTS/MULTIPLIER
1. Direct Effects 4,434 155,217.6 200,947.5
2. Indirect and Induced Effects 6,008 161,588.8 294,858.0
3. Total Effects 10,443 316,806.4 495,805.5
4. Multipliers (3/1) 2.355 2.041 2.467

III. COMPOSITION OF GROSS STATE PRODUCT
1. Wages-Net of Taxes 308,717.1
2. Taxes
a. Local/State 49,945.C
b. Federal
General 33,309.C
Insurance Trusts 27,583.4
Federal Subtotal 60,892.3
c. Total taxes (2a+2b) 110,837.3
3. Profits, dividends, rents, and other 76,251.1
4. Total Gross State Product (1+2+3) 495,805.5

EFFECTS PER MILLION DOLLARS OF INITIAL EXPENDITURE
Employment (Jobs) 29.8
Income 904,327
Local/State Taxes 142,568
Gross State Product 1,415,281
Note: Detail may not sum to totals due to rounding.
*Terms:
Direct Effect (State)-the proportion of direct spending on goods and services produced.
Indirect Effects-the value of goods and services needed to support the provision of those direct economic effects.
Induced Effects-the value of goods and services needed by households that provide the direct and indirect labor.


Economic Impacts of Historic Preservation in Florida











































































VI-8 Economic Impacts ofHistoric Preservation in Florida

















CHAPTER SEVEN


Timothy McLendon & JoAnn Klein
Center for Governmental Responsibility
University of Florida Levin College of Law

James C. Nicholas
Professor of Urban & Regional Planning & Affiliate Professor of Law
University of Florida

Stanley Latimer
Research Scientist, Geoplan Center
University of Florida, Department of Urban & Regional Planning


Economic Impacts ofHhstoric Preservation in Florida vII-1


Comparative Property Values Analysis
Use of GIS Mapping to Review Property Appraisal Data


Economic Impacts qf Historic Preservation in Florida


Vll-1











































































VII-2 Economic Impacts ofHistoric Preservation in Florida










INTRODUCTION


This study employed Geographic Information Systems (GIS) technology and data to compare
property appraisals from 1992, 1997 and 2001 for neighborhoods within the following Florida
cities: 1) Gainesville (two historic districts); 2) Ocala (two districts); 3) Jacksonville (two
districts); 4) Tampa (two districts); 5) St. Petersburg (four districts); 6) Lakeland (four districts);
7) West Palm Beach (two districts); and 8) Lake Worth (one district). For the most part, the
study focused on neighborhoods in residential historic districts, the two exceptions being the
mixed use districts in Ybor City in Tampa and Springfield in Jacksonville.

The purpose of this comparative study was to use GIS techniques to demonstrate the effects of
historic preservation programs on local property values. For this reason, each selected historic
district was compared with one or more neighborhoods in the same city selected as being
demographically and economically comparable.

SUMMARY OF FINDINGS

Researchers traced assessed values for some 28,000 parcels of mainly single family residential
property, looking at 1992, 1997 and 2001. These parcels represented eighteen historic districts
and twenty-five comparison neighborhoods in eight large and medium-sized Florida cities.
Analysis of these districts shows that average assessed values increased over the ten-year period
from 1992-2001 in both the historic districts and the comparison neighborhoods.

For the period from 1992-97, assessed values increased at a higher rate in 16 historic districts,
while 4 of the comparison neighborhoods showed a higher rate of increase than their historic
districts. For the period from 1997-2001, 13 historic districts witnessed a greater percentage
increase in assessed values, while 6 comparison neighborhoods outperformed their historic
districts. Over the entire term from 1992-2001, 16 historic districts and 4 comparison
neighborhoods witnessed greater total percentage increases in assessed values.

Exhibit 7.1
Summary of Findings
HIGHER
CITY/AREA INREAE
INCREASE
GAINESVILLE:
Northeast Historic District
HD
Golfview
Pleasant Street Historic Dist.
HD
5th Avenue
JACKSONVILLE:
Riverside/Avondale Historic Dist.
Ortega & San Marcos HD
OCALA:
Ocala Historic District
HD
The Pines
Tuscawilla Park Hist. Dist.
HD
East Tuscawilla


Economic Impacts of Historic Preservation in Florida


Vll-3










HIGHER
CITY/AREA INCREASE

TAMPA:
Hyde Park Historic District
HD
Davis Island
Ybor City Historic District.
HD
West Tampa
ST PETERSBURG:
North Shore Historic District
Lakewod, Northeast & Placido HD
Bayou
Historic Kenwood
HD
Meadowlawn
Poser Park Historic District
HD
Bartlett Park
Round Lake Historic District
HD
Euclid St. Paul
LAKELAND:
East Lake Morton Historic Dist.
HD
Biltmore
Dixieland Historic District
HD
Camphor
Beacon Hill Historic Dist.
Tie
Southwest
South Lake Morton Historic Dist.
HD
Lake Hollingsworth
WEST PALM BEACH:
Northboro Park Historic Dist.
HD
Northwood Hills
Flamingo Park Historic Dist. T
Tie
Sunshine Park
LAKE WORTH:
Old Lucerne Historic Dist.
HD
North Lake Worth
TOTALS:
Historic Areas 18
Comparable 23
HIGHER INCREASE IN VALUE
Historic District 14
Percent 77.8%
Other Area 2
Percent 11.1%
Tie 2
Percent 11.1%


VII -4 Economic Impacts ofHhstoric Preservation in Florida


VII-4


Economic Impacts of Historic Preservation in Florida










This initial Florida survey of assessed values suggests that historic properties tend to maintain
their value, and increase at a similar or slightly greater rate than comparable non-historic
properties in most cases. Although this study will need to be supplemented by research that
takes into account variables such as house or lot size, and improvements to property, as well as
recent sales prices, it nevertheless provides a look at how the average residential property in an
historic neighborhood performs compared with similar property in non-historic neighborhoods.


OTHER STUDIES EVALUATING HISTORIC PRESERVATION
AND LOCAL COMMUNITIES

Many studies over the past quarter century have found that designated historic properties
appreciate at a somewhat greater rate than non-designated properties.1 Most studies employed a
methodology similar to the one used here: they present a non-scientific comparison setting forth
the evolution of house prices for historic districts and non-historic districts, based either on sales
information or on appraisal data. As with this study, these studies have looked mainly to
changes in average house prices for historic district properties and non-historic properties, and
have drawn tentative conclusions that historic designation has a positive effect on house prices.
However, a few studies have gone beyond this approach and have accounted for other variables
such as property and house characteristics or location that may also affect the price of houses in a
given neighborhood.2 The models presented by this latter group of studies have an additional


SSee, e.g., Donovan D. Rypkema, Virginia's Economy and Historic Preservation: The Impact of
Preservation on Jobs, Business, and Community Development (Preservation Alliance of Virginia 1995), reprinted in
1 DOLLARS & SENSE OF HIST. PRESERVATION, occasional series (Nat'l Trust for Hist. Preservation, no date), at 1;
ELIZABETH MORTON, HISTORIC DISTRICTS ARE GOOD FOR YOUR POCKETBOOK: THE IMPACT OF LOCAL HISTORIC
DISTRICTS ON HOUSE PRICES IN SOUTH CAROLINA (S.C. Dept. of Archives & History, 2000); John A. Kilpatrick,
Impact of Historic District Designation on House Prices in Columbia, South Carolina (S.C. Dept. of Archives &
History, research monograph, 1995); Ann Bennett, The Economic Benefits of Historic Designation, Knoxville,
Tennessee (Knoxville Knox County Metro. Comm'n 1996), reprinted in 15 DOLLARS & SENSE OF HIST.
PRESERVATION, occasional series (Nat'l Trust for Hist. Preservation, 1998), at 1; Jo Ramsay Leimenstall, Assessing
the Impact of Local Historic Districts on Property Values in Greensboro, North Carolina, 14 DOLLARS & SENSE OF
HIST. PRESERVATION, occasional series (Nat'l Trust for Hist. Preservation 1998), at 1.
A few researchers have identified mixed or negative results in their property comparisons. See, e.g., Paul
K. Asabere et al., The Adverse Impacts of Local Historic Designation: The Case of Small Apartment Buildings in
Philadelphia, 8 J. REAL EST. FIN. & ECON. 225 (1994) (focusing on small multi-family housing); Peter V. Schaeffer
& Cecily A. Millerick, The Impact of Historic District Designation on Property Values: An Empirical Study, 5
ECON. DEV. Q. 301 (1991) (Chicago study found that while National Register districts increased in value, local
districts did not).

2 See, e.g., Deborah Ford, The Effect of Historic District Designation on Single-Family Home Prices, 17 J.
AM. REAL EST. & URBAN ECON. ASS'N 353 (1989) (Baltimore, Maryland); Dennis E. Gale, The Impacts of Historic
District Designation, 57 J. AM. PLANNING ASS'N 325 (1991) (examining 3 Washington, D.C., historic districts, and
finding less post-designation decline in values in historic districts than in other D.C. neighborhoods); Paul K.
Asabere & Forrest E. Huffman, Historic Designation and Residential Market Values, APPRAISAL J., July 1994, at
396; Patrick Haughey & Victoria Basolo, The Effect of Dual Local and National Register Historic District
Designations on Single-Family Housing Prices in New Orleans, APPRAISAL J., July 2000, at 283; Robin M.
Leichenko et al., Historic Preservation and Residential Property Values: An Analysis of Texas Cities, 38 URBAN
STUDIES 1973 (2001) (providing a useful discussion of prior studies, and comparing property values for historic
districts in nine Texas cities).


Economic Impacts of Historic Preservation in Florida


Vll-5









element of statistical reliability.

Researchers identified only one similar comparative study evaluating Florida historic properties.
A 1997 report prepared for the Preservation Foundation of Palm Beach, suggested that the
designation of properties within the Town of Palm Beach added some 10-20% to property
values.3 The evaluation was made based on residential property sales comparisons from 1990
through 1997.

Historic preservation has long been a valuable tool for promoting urban redevelopment. Other
studies have noted the positive impacts of historic preservation efforts on local communities in
encouraging the revitalization of older neighborhoods, while also noting the risks that the
resulting gentrification, by removing affordable housing, can displace older residents.4


METHODOLOGY

The cities used for this property values analysis were largely self-selecting. For the most part
they represented Florida cities with significant historic preservation programs which responded
substantively to survey requests by project staff in fall 2001. Because of the GIS nature of the
project methodology, it was a requirement that cities be located in counties for which Geoplan
had GIS data, or that the cities make available this data themselves.5 Project staff used GIS
because it allows map data to link to specific parcel data and thus makes possible a large-scale
search of neighborhoods within the property appraisal databases which have been made publicly
available by the Florida Department of Revenue.6

Following a series of site-visits and interviews, project staff worked with local officials and staff
to identify at least one neighborhood in the same community that was substantially comparable
in terms of geography, demographics and economics. Each of the identified districts was
scrutinized using Census block data to ensure that they were relatively comparable during the
course of the period investigated.






3DIANE JENKINS, A SUMMARY REPORT CONCERNING THE IMPACT OF LANDMARKING ON RESIDENTIAL
PROPERTY VALUES, PALM BEACH, FLORIDA (1997).

See David Listokin et al., The Contributions of Historic Preservation to Housing and fonomic
Development, 9 HOUSING POL'Y DEBATE 431 (1998) (noting that rehabilitation is often a catalyst that helps improve
neighborhoods, and discussing the effects of the federal rehabilitation tax credit in helping to encourage local
rehabilitation); Christopher T. Wojno, Historic Preservation and Economic Development, 5 J. PLANNING
LITERATURE 296 (1991).

5 The Geoplan Center is a GIS research and teaching laboratory in the Department of Urban ad Regional
Planning at the University of Florida College of Design, Construction and Planning.
6 Geoplan also makes this information accessible as part of its Florida Geographic Data Library. It is
available online at: http://www.fgdl.org/ (last visited Sept. 2002).


Vll-6


Economic Impacts (?fHistoric Preservation in Florida









Project collaborators at Geoplan first assembled GIS shapefile7 data for specific districts or
neighborhoods with the cities selected for property values analysis. They then used the local
parcel shapefiles to query a subset of records within county property appraisal records for the
years 1992, 1997 and 2001. This involved considerable effort because parcel numbering formats
vary from county to county. Some counties use extra prefix numbers while others use embedded
spaces or dashes for delineation. Furthermore, these formats change over time. It was thus
necessary to ensure that parcel numbers for each of the three databases were provided in the
same format.

The combination of the three appraisal cycles over a decade provided some showing of the
development of property values during a period of time. Once subsets of county appraisal data
were created, these were combined into a single database providing assessed values for all three
appraisal periods for each parcel within the district or neighborhood. To refine and correct the
comparison, the parcels were then sorted first, by their respective "Department of Revenue
Codes" (land use) and secondly, by "Use Descriptions."8 It was then possible to provide average
values for parcels identified as "Residential" in nature. Subsequent analysis also evaluated
single family residential parcels, distinct from all residential parcels.

Having identified residential parcels, project staff then computed the changes in average assessed
value from 1992 to 1997, from 1997 to 2001 and from 1992 to 2001. Measured against the
average value for the property, the average change yielded a percentage change in value for the
district. Three separate searches were done. The first search tracked changes in assessed values
for all property within the district, including institutional or commercial property. The second
search tracked changes for all residential property, and the third measured changes in single
family residential property. One comparison of solely commercial property in Ybor City and
West Tampa was included, as well as one intra-district survey of the four quadrants of
Springfield Historic District in Jacksonville.













7 "Shapefile" is a technical name for the GIS format for storing specific location, shape and attribute
information for geographic features. Each parcel of property in an appraiser's database represented one shapefile,
and was linked to the relevant information identifying the parcel, its location, ownership, appraised values etc. The
information allowed both mapping and data search for each parcel.

8 The Florida Department of Revenue (DOR) Codes are number codes which provide an official land use
classification for property tax purposes. This study focused on the following DOR Codes and Use Descriptions:
Code 1 (Single Family Residential), Code 8 (Multi-Family Less Than 10 Units), Code 03 (Multi-Family 10 Units or
More), and Codes 11-39 (Improved Commercial). These DOR Codes and Use Descriptions are employed by each
county property appraiser throughout Florida under Rule 12D-8.008(2)(c), Florida Administrative Code.


Economic Impacts (?fHistoric Preservation in Florida


Vll-7











Historic Districts


Northeast Hist. Dist.
(Nat'l Register & local)

Pleasant Street Hist. Dist.
(N.R. & local)


Ocala Hist. Dist.
(N.R. & local)

Tuscawilla Hist. Dist.
(N.R. & local)


Riverside/Avondale Hist. Dist.
(N.R. & local)

Springfield Hist. Dist. (4 quadrants)
(N.R. & local)


Inventory of
Comparison Neighborhoods


Golfview neighborhood


N.W. 5h Ave. neighborhood



Woodfields neighborhood
The Pines neighborhood

East Tuscawilla neighborhood
just east of Tuscawilla Hist. Dist.


Ortega neighborhood
San Marco neighborhood


Hyde Park Hist. Dist.
(N.R. & local)

Ybor City local hist. dist.
(N.R. & local)

Ybor City commercial
(N.R. & local)


North Shore Hist. Dist.
(local)


Historic Kenwood District
(local)

Roser Park Hist. Dist.
(local)

Round Lake Hist. Dist.
(local)


Davis Island


Eastern Ybor City (part of Nat'l
Register district, not local district)

West Tampa commercial


Lakewood Estates subdivision
Old North East Park neighborhood
Placido Bayou neighborhood

Meadowlawn neighborhood


Bartlett Park neighborhood


Euclid St. Paul neighborhood


VII -8 Economic Impacts ofHhstoric Preservation in Florida


Cities Reviewed


Gainesville:


Ocala:


Jacksonville:


Tampa:


St. Petersburg:


Vll-8


Economic Impacts of Historic Preservation in Florida










Cities Reviewed


Lakeland:













West Palm Beach:






Lake Worth:


Economic Impacts ofHhstoric Preservation in Florida VII-9


Vll-9


Historic Districts


East Lake Morton Hist. Dist.
(N.R. & local)

Dixieland Hist. Dist.
(local)

Beacon Hill Hist. Dist.
(N.R. & local)

South Lake Morton Hist. Dist.
(N.R. & local)


Northboro Park Hist. Dist.
(local)

Flamingo Park Hist. Dist.
(local)


Old Lucerne Hist. Dist.
(local)


Inventory of
Comparison Neighborhoods


Biltmore neighborhood


Camphor neighborhood


Southwest neighborhood


Cumberland neighborhood
Lake Hollingsworth neighborhood


Northwood Hills neighborhood


Sunshine Park neighborhood



Neighborhood immediately north


Economic Impacts of Historic Preservation in Florida









RESULTS


GAINESVILLE COMPARISONS

1. Northeast Historic District and Golfview Neighborhood.

Two Gainesville historic districts were examined. The first, the Northeast Historic District, is
one of Gainesville's oldest and best-preserved residential neighborhoods. Consisting of some
160 acres, this district has homes in a variety of styles dating from around 1875 through 1920.
The Northeast Historic District has been on the National Register since 1980 and also enjoys
local protection. It has benefited from much rehabilitation activity during the past decade.9

Single family residential property was compared with similar property in the Golfview Estates
subdivision, a single-family residential neighborhood located in southwest Gainesville, near the
University of Florida campus. Its development dates from about 1950 through 1980.


TABLE 7-1
Percentage Change in Assessed Values
Northeast Historic District and Golfview, 1992-2001

Single Fam. Resid. %Change 92-97 %Change 97-01 %Change 92-01
Northeast Hist. Dist. 35.74 23.42 67.53
Golfview 20.20 26.89 52.51


The results for this comparison (Table 7-1) show that the single family residential property in the
Northeast Historic District increased significantly faster during the period 1992-97 than in the
comparison neighborhood. For the second half of the time period, the comparison neighborhood
increased at a somewhat higher rate than in the historic district. Nevertheless, the historic district
witnessed significantly higher increases over the entire ten-year period.

2. Pleasant Street Historic District and 5th Avenue Neighborhood.

The Pleasant Street Historic District was the second Gainesville historic district examined.
Pleasant Street is Gainesville's oldest African-American residential neighborhood, with some
255 structures dating from 1875 through the 1930's. Pleasant Street has been listed on the
National Register since 1989, and also enjoys local protection. This neighborhood struggled in
the years following World War II with incompatible land uses and degradation of its housing
stock, but has benefited from new investment since its designation.



9For information about Gainesville's historic districts, see BEN PICKARD, HISTORIC ALACHUA COUNTY
AND OLD GAINESVILLE: A TOUR GUIDE TO THE PAST 10-61 (2001); MORTON D. WINSBERG, FLORIDA'S HISTORY
THROUGH ITS PLACES 2-4 (1995), available online at. http://www.freac.fsu.edu/HistoricPlaces/Atlas.html (last
visited Sept. 2002).


VII-1 0


Economic Impacts of Historic Preservation in Florida









As a comparison neighborhood to the Pleasant Street Historic District, the adjoining Fifth
Avenue neighborhood was selected. The Fifth Avenue neighborhood is a mixed use
neighborhood sharing many of the economic and demographic characteristics of Pleasant Street
Historic District.

TABLE 7-2
Percentage Change in Assessed Values
Pleasant Street Historic District and 5th Avenue neighborhood

Single Fam. Resid. % Change 92-97 % Change 97-01 % Change 92-01
Pleasant Street H.D. 21.44 22.01 48.17
5th Avenue 15.07 22.57 41.04


The results of this comparison, as seen in Table 7-2, show that the Pleasant Street Historic
District and 5h Avenue neighborhood enjoyed similar increases in assessed values, with the
historic district performing better in the period from 1992-97. The comparison neighborhood, in
turn, slightly outperformed the historic district in the period following 1997.


JACKSONVILLE COMPARISONS

1. Riverside/Avondale Historic District with Ortega and San Marco Neighborhoods.

Jacksonville's Riverside/Avondale Historic District is a fashionable residential neighborhood
situated along the St. Johns River near downtown Jacksonville. The National Register and local
district contains around 3,000 homes dating from the 1870's through the 1930's.10

The Ortega and San Marco neighborhoods, which were used in this comparison, were both
developed beginning in the 1920's and have since remained fashionable waterfront
neighborhoods. The comparison (see Table 7-3, below) shows that assessed values increased in
all three neighborhoods, with Riverside/Avondale in the mid-range over the ten-year period.












1 For further information about Jacksonville's historic districts and neighborhoods, including
Riverside/Avondale, Ortega, San Marco and Springfield, see WAYNE W. WOOD, JACKSONVILLE'S ARCHITECTURAL
HERITAGE: LANDMARKS FOR THE FUTURE (1989); cf WINSBERG, supra note 8, at 35, 40 (discussing the Avondale
and Riverside National Register Districts).


Economic Impacts qf historic Preservation in Florida


VII-1 1










TABLE 7-3
Percentage Change in Assessed Values
Riverside/Avondale H.D., Ortega and San Marco


Single Family Resid. % Change 92-97 % Change 97-01 % Change 92-01
Riverside/Avondale HD 13.77 32.27 50.49
Ortega 14.12 22.77 40.11
San Marco 22.09 37.60 67.99


2. Springfield Historic District: Intra-District Comparison.

The Springfield Historic District, a nationally and locally designated historic district, has been
the focus of sustained local investment by the city of Jacksonville since 1998. The goal of the
city's initiative has been to promote restoration of this formerly genteel neighborhood. The
city's redevelopment efforts have concentrated on improving infrastructure and providing
incentives and assistance for home ownership. The city has concentrated its efforts by beginning
in 1998 with the Southwest Quadrant (the area west of Main Street and south of 8th Street), and
shifting to the Southeast Quadrant in 2000. These efforts have resulted in significant
improvement in both targeted areas (see Table 7-4, below), and the benefits of improvement are
also being felt in the northern parts of the district.


TABLE 7-4
Percentage Change in Assessed Values
Springfield Historic Districts
Springfield Hist. Dist. % Change 92-97 % Change 97-01 % Change 92-01
Single Family Resid.
Southwest Quadrant 3.26 35.83 40.25
Southeast Quadrant -4.47 25.40 19.79
Northwest Quadrant 8.07 29.33 39.77
Northeast Quadrant -1.70 24.77 22.65


VII-12 Economic Impacts ofHhstoric Preservation in Florida


VII-12


Economic Impacts of Historic Preservation in Florida










OCALA COMPARISONS


1. Ocala Historic District and Woodfields & The Pines neighborhoods.

The Ocala Historic District, situated along Fort King Street, is one of Ocala's most fashionable
neighborhoods, with houses dating from around 1880 through 1930.11 On the National Register
since 1984, the Ocala Historic District also benefits from local protection.

Both Woodfields and The Pines subdivisions are post-war residential neighborhoods lying
immediately south and west of the Ocala Historic District.

TABLE 7-5
Percentage Change in Assessed Values
Ocala Historic District and Woodfields and The Pines neighborhoods


Single Fam. Resid. % Change 92-97 % Change 97-01 % Change 92-01
Ocala Hist. Dist. 22.09 37.60 67.99
Woodfields 2.38 16.35 19.12
The Pines 9.62 20.42 32.00


2. Tuscawilla Park Historic District and East Tuscawilla Neighborhood.

Tuscawilla Park Historic District is a small residential neighborhood, containing houses from the
1870's through the 1930's. It is listed on the National Register and is also a local historic district.
A comparison was made with East Tuscawilla, a small residential area lying immediately to the
east of the historic district.

TABLE 7-6
Percentage Change in Assessed Values
Tuscawilla Park Historic District and East Tuscawilla neighborhood


SSee WINSBERG, supra note 8, at 79 (discussing both the Ocala and Tuscawilla Park Historic Districts).


Single Fam. Resid. % Change 92-97 % Change 97-01 % Change 92-01
Tuscawilla Park H.D. 18.76 20.31 42.89
East Tuscawilla -2.26 26.70
23.84


Economic Impacts qf historic Preservation in Florida


VII-1 3










TAMPA COMPARISONS


1. Hyde Park Historic District and Davis Island.

The Hyde Park Historic District is Tampa's oldest and best-preserved residential neighborhood.
On the National Register since 1985, this district contains some 1700 structures dating mainly
from the 1880's through the 1930's.12 The Hyde Park Historic District was compared with the
residential neighborhood on Davis Island, which faces it across Tampa Bay. These two
neighborhoods are similarly situated geographically and economically, making this an especially
interesting comparison, as can be seen from Table 7-7, below.

TABLE 7-7
Percentage Change in Assessed Values
Hyde Park Historic District and Davis Island

Single Fam. Resid. % Change 92-97 % Change 97-01 % Change 92-01
Hyde Park Hist. Dist. 24.33 40.40 74.56


Davis Island 19.32


33.99 59.88


2. Ybor City Historic District and West Tampa Commercial.

Ybor City Historic District is a manufacturing, residential and commercial area famous for its
cigar factories. Settled by immigrants, it has buildings dating from the 1880's through the early
twentieth century. 13 Today this National Register district is a vibrant mixed use commercial and
entertainment district. This comparison focused on commercial property within the district, and
compared the changes in assessed values with those for commercial property in West Tampa.
The comparison demonstrates the success of Ybor City's redevelopment and renaissance, as can
be seen from Table 7-8, below.

TABLE 7-8
Percentage Change in Assessed Value
Ybor City and West Tampa Commercial Property
Improved Commercial % Change 92-97 % Change 97-01 % Change 92-01
Ybor City Hist. Dist. 50.92 66.81 151.74
West Tampa -3.07 28.85 24.89







12 See id. at 57 (discussing the Hyde Park Historic District).

13 See id. at 60 (discussing Ybor City).


VII-14


Economic Impacts of Historic Preservation in Florida









ST. PETERSBURG COMPARISONS


1. North Shore Historic District and Lakewood Estates, Northeast Park and Placido
Bayou neighborhoods.

North Shore Historic District, a locally designated historic district, is one of St. Petersburg's
oldest traditional residential neighborhoods. Developed from 1911 onward, it features a wide
mix of home styles, including a variety of home sizes and small multi-family residences.14 This
neighborhood was compared with three others: Lakewood Estates, a subdivision in south St.
Petersburg mainly developed from 1950 through the 1980's; Northeast Park, a mainly single-
family neighborhood developed in the 1950's and 1960's; and Placido Bayou, another single-
family subdivision developed mainly from 1950-1990.

As Table 7-9 shows, the North Shore Historic District demonstrated greater increases in assessed
values for residential property than did both Lakewood Estates and Northeast Park over the ten-
year period. Although the historic district outperformed Placido Bayou for the final period from
1997-2001, assessed values increased significantly higher in Placido Bayou for the earlier period
from 1992-97.

TABLE 7-9
Percentage Change in Assessed Values
North Shore H.D. and Lakewood Estates, Northeast Park & Placido Bayou


Single Family Resid. % Change 92-97 % Change 97-01 % Change 92-01
North Shore H.D. 17.42 28.81 51.24
Lakewood Estates 10.95 14.72 27.28
Northeast Park 11.63 19.43 33.32
Placido Bayou 54.81 17.43 81.80


2. Historic Kenwood and Meadowlawn neighborhood.

Historic Kenwood is a locally designated historic district in central St. Petersburg with small
homes and apartments dating mainly from 1920 through around 1940. This district was
compared with the Meadowlawn neighborhood, a suburban development in north St. Petersburg.
Single family residential assessed values increased at a markedly higher rate in the historic
district over the period from 1992-2001 than in the comparison neighborhood (see Table 7-10,
below).




14 For more information on St. Petersburg neighborhoods, including both its historic districts and non-
historic neighborhoods, see, e.g., the summary of the Neighborhood Partnership and tour of St. Petersburg
neighborhoods, available at: http://www.stpete.org/npart.htm(last visited Sept. 2002).


Economic Impacts of Historic Preservation in Florida


VII-1 5









TABLE 7-10
Percentage Change in Assessed Values
Historic Kenwood and Meadowlawn neighborhood

Single Family Resid. % Change 92-97 % Change 97-01 % Change 92-01
Historic Kenwood 14.17 26.82 44.80
Meadowlawn 4.71 15.77 21.22


3. Roser Park Historic District and Bartlett Park Neighborhood.

Roser Park was developed after 1910, and first designated a local historic district in 1987. Since
adoption of a neighborhood plan in 1993, this small district has seen substantial rehabilitation
financed both by private and public investment. Bartlett Park is a traditional neighborhood, with
a mix of housing dating from both before and after the World War II. Bartlett Park has also
benefited from substantial public and private investment since adoption of a neighborhood plan
in 1993. As can be seen from Table 7-11, below, both neighborhoods have seen dramatic
increases in property values over the past decade reflecting the resurrection of both these
neighborhoods from decay.

TABLE 7-11
Percentage Change in Assessed Values
Roser Park Historic District and Bartlett Park

Single Family Resid. % Change 92-97 % Change 97-01 % Change 92-01
Roser Park H.D. 91.56 49.45 186.29
Bartlett Park 54.59 45.92 125.59


4. Round Lake Historic District and Euclid St. Paul Neighborhood.
Round Lake Historic District, another locally designated historic district in central St.
Petersburg, is an older neighborhood located to the west of the North Shore Historic District.
Developed from about 1910 through 1940, this neighborhood features both single family
residences and small multi-family housing. Round Lake was compared with the nearby Euclid
St. Paul, a traditional neighborhood developed mainly from 1930 through 1960. Assessed values
in the comparison neighborhood rose significantly higher during the period from 1992-97.
However, Round Lake assessed values increased by a greater rate in the subsequent period from
1997-2001 (see Table 7-12, below).


VII-16 Economic Impacts ofHhstoric Preservation in Florida


VII-16


Economic Impacts of Historic Preservation in Florida










TABLE 7-12
Percentage Change in Assessed Values
Round Lake Historic District and Euclid St. Paul

Single Family Resid. % Change 92-97 % Change 97-01 % Change 92-01
Round Lake H.D. 11.43 36.54 52.15
Euclid St. Paul 17.29 24.87 46.47



LAKELAND COMPARISONS

1. East Lake Morton Historic District and Biltmore Neighborhood.

The East Lake Morton Historic District, on the National Register since 1993, is one of
Lakeland's earlier middle-class neighborhoods, with most houses dating from 1900 through
1940.15 This district was compared with the Biltmore neighborhood, a traditional neighborhood,
developed subsequently, and lying immediately to the east of the historic district. The
comparison showed both neighborhoods increasing at a similar rate, with a slightly higher rate
for East Lake Morton Historic District (see Table 7-13, below).

TABLE 7-13
Percentage Change in Assessed Values
East Lake Morton Historic District and Biltmore

Single Family Resid. % Change 92-97 % Change 97-01 % Change 92-01
East Lake Morton H.D. 14.07 16.71 33.14
Biltmore 14.03 13.56 29.49


2. Dixieland Historic District and Camphor Neighborhood.

The Dixieland Historic District is a locally designated historic district. This modest mixed-use
neighborhood features a variety of larger and smaller houses mainly in bungalow style,
developed since the 1920's.16 The historic district was compared with the Camphor
neighborhood, situated to its south. An analysis of assessed values for both neighborhoods
shows a moderately higher rate of increase for the historic district (see Table 7-14, below).




15 See WINSBERG, supra note 8, at 103-04 (discussing Lakeland historic districts on the National Register,
including East Lake Morton, Beacon Hill and South Lake Morton).

16 Information about the Dixieland Historic District, and other Lakeland historic districts, is available from
the city community development department, at http://communitvdevelopment.lakelandgov.net/Dist.Sum.html (last
visited Sept. 2002).


Economic Impacts of Historic Preservation in Florida


VII-1 7









TABLE 7-14
Percentage Change in Assessed Values
Dixieland Historic District and Camphor

Single Family Resid. % Change 92-97 % Change 97-01 % Change 92-01
Dixieland Hist. Dist. 9.94 13.57 24.86
Camphor 6.51 9.28 16.40


3. Beacon Hill Historic District and Southwest Neighborhood.

Beacon Hill Historic District, another National Register district, is a small neighborhood of
single family homes dating from 1920 through around 1940. This district was compared with the
larger Southwest neighborhood, developed in large part from the 1950's through the 1970's. The
comparison for these two neighborhoods shows modest increases in assessed values, with the
historic district increasing at a higher rate from 1992-97, while the comparison neighborhood
showing similar increases following 1997 (see Table 7-15, below).

TABLE 7-15
Percentage Change in Assessed Values
Beacon Hill Historic District and Southwest neighborhood

Single Family Resid. % Change 92-97 % Change 97-01 % Change 92-01
Beacon Hill Hist. Dist. 11.12 9.28 21.43
Southwest 10.19 11.23 22.57


4. South Lake Morton Historic District and Cumberland & Lake Hollingsworth
Neighborhoods.

South Lake Morton Historic District, a National Register district, is a residential middle class
neighborhood dating from 1900 through about 1940. South Lake Morton adjoins the campus of
Florida Southern College, which is itself an historic district because of its distinctive Frank
Lloyd Wright architecture. The Cumberland neighborhood, to the east of South Lake Morton, is
an older single family residential neighborhood, with homes dating from 1920 through the early
1950's. Lake Hollingsworth neighborhood, to the south, sits along the lake of the same name,
and also contains mainly single family houses dating from the 1930's through the 1960's. A
comparison of assessed values showed that homes in the historic district increased at a greater
rate throughout the ten-year period from 1992-2001 (see Table 7-16, below).


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TABLE 7-16
Percentage Change in Assessed Values
South Lake Morton Historic District and
Cumberland & Lake Hollingsworth neighborhoods


Single Family Resid. % Change 92-97 % Change 97-01 % Change 92-01
South Lake Morton H.D. 19.14 16.93 39.31
Cumberland 12.85 13.43 28.01
Lake Hollingsworth 15.25 11.53 28.55


WEST PALM BEACH COMPARISONS

1. Northboro Park Historic District and Northwood Hills Neighborhood.

The Northboro Park Historic District is a residential neighborhood in the north of West Palm
Beach. This local historic district lies to the immediate north of the Old Northwood National
Register District, and is an upper middle class development dating from 1920 through 1940.17
The comparison neighborhood, Northwood Hills, is a middle class residential neighborhood with
single family homes dating from the 1930's through the 1950's.

A comparison of assessed values in these neighborhoods shows that property values in the
historic district increased at a substantially higher rate during the entire ten-year period from
1992-2001 (see Table 7-17, below).

TABLE 7-17
Percentage Change in Assessed Values
Northboro Park Historic District & Northwood Hills


Single Family Resid. % Change 92-97 % Change 97-01 Change 92-01
Northboro Park Hist. Dist. 33.73 47.41 97.13
Northwood Hills 11.80 25.31 40.10


17 Information about West Palm Beach historic districts and their development is available from the West
Palm Beach Neighborhood Planning Department, at http://www.citvofwpb.com/neighborhoods/historic.htm (last
visited Sept. 2002).


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VII-1 9










2. Flamingo Park Historic District and Sunshine Park Neighborhood.

Flamingo Park Historic District, a local district since 1994, was listed on the National Register in
2000. This historic residential neighborhood features a variety of mainly single family
residences dating from 1920 through 1940.18 Sunshine Park, a smaller adjacent neighborhood
was developed during the same period and shares many of the characteristics of Flamingo Park.
Both districts witnessed impressive increases in assessed values over the ten-year period,
reflecting their proximity to new mixed use development downtown which made them attractive
and convenient. Though the designated district showed higher increases for the period from
1992-97, the comparison neighborhood increased by an even greater margin during the period
from 1997-2001 (see Table 7-18, below).

TABLE 7-18
Percentage Change in Assessed Values
Flamingo Park Historic District & Northwood Hills

Single Family Resid. % Change 92-97 % Change 97-01 % Change 92-01
Flamingo Park Hist. Dist. 27.78 50.93 92.86
Sunshine Park 16.58 69.09 97.12



LAKE WORTH COMPARISON

1. Old Lucerne Historic District and adjacent North Lake Worth Neighborhood.

The Old Lucerne Historic District is a locally designated residential neighborhood along the
Intracoastal Waterway. It was compared with the adjacent North Lake Worth neighborhood,
which lies immediately north of the historic district. The comparison (see Table 7-19, below)
shows that both neighborhoods increased at similar rates over the ten-year period, with a slightly
higher rate of increase for the historic district.

TABLE 7-19
Percentage Change in Assessed Values
Old Lucerne Historic District and North Lake Worth

Single Family Resid. % Change 92-97 % Change 97-01 % Change 92-01
Old Lucerne Hist. Dist. 20.78 28.35 55.03
North Lake Worth 18.79 23.82 47.09


VII -20 Economic Impacts ofHhstoric Preservation in Florida


18 See d.
See id.


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INITIAL EVALUATION


This initial comparative study reviews the effects of historic preservation on specific
neighborhoods in the selected cities, which form a fair sample of large and medium-sized
communities in the Florida peninsula. This review of assessed values was broad, examining
more than 28,000 parcels of residential property. To this extent, the findings of this study do
reflect the relative success of historic preservation in the selected communities.

One important conclusion is clear: in no case reviewed here do historic preservation programs so
"burden" property as to decrease property values. Indeed, in the vast majority of cases,
designated residential properties performed as well as or better than comparable undesignated
properties. This was especially the case for single family residential property, but also true for
small-scale multi-family residential property (see tables in Appendix B). This study shows that
local neighborhood historic preservation efforts may justly be considered as "value-added."
Such a conclusion is especially significant given the legal implications of government land use
regulations, which are often alleged to "burden" the use of real property or impose some
"inordinate economic burden" on the landowner. 19 If local governments are able to demonstrate
that any incidental "burdens" associated with the protection of historic resources are
accompanied by an accompanying "benefit" in the form of increased property values, this may
form a valuable insulation both against Fifth Amendment Takings challenges and against
challenges brought under Florida's Private Property Rights Protection Act. 20


19 Florida's Private Property Protection Act, Section 70.001, Florida Statutes, was enacted in 1995, and
creates a new cause of action whenever government action "has inordinately burdened an existing use of real
property." Under the Act, the landowner may be entitled to relief, including loss to the fair market value of the
property resulting from the government action. Id. The government actions encompassed by the Act would include
land use decisions such as rezonings, comprehensive plan amendments, designation of landmarks or historic districts
and enforcement of these regulations. Id. 70.001(3)(d).
As used in the Private Property Protection Act, the term "inordinate burden" draws from constitutional
takings jurisprudence and is defined to mean that the landowner is permanently unable "to attain the reasonable,
investment-backed expectations" for the existing land use, or that the only permitted land uses are unreasonable and
are such "that the property owner bears permanently a disproportionate share of a burden imposed for the good of
the public." Id. 70.001(3)(e).
This study suggests that there are demonstrable benefits attached to historic designation and protection, at
least as applied to a district as a whole. In the general course of events, historic designation and protection do not
depress property values, and are far more likely to increase them more than comparable non-designated properties.

20 For more recent analysis of the Private Property Protection Act, see Julian Conrad Juergensmeyer,
Florida's Private Property Rights Act: Does It Inordinately Burden the Public Interest?, 48 FLA. L. RV. 695
(1996); Roy Hunt, Property Rights and Wrongs: Historic Preservation and Florida's 1995 Private Property Rights
Protection Act, 48 FLA. L. REV. 709 (1996) (arguing that the benefits provided to property owners by historic
preservation outweigh any incidental burdens imposed).
As for Fifth Amendment Takings, the classic test identified by the U.S. Supreme Court in Penn Central
Transportation Co. v. New York City, 438 U.S. 104, 124-25 (1978), applied a three-factor balancing test to
determine if government regulation amounted to a taking of property: 1) the economic impact of the law on the
petitioner; 2) the extent to which the law interferes with reasonable investment-backed expectations; and 3) the
character of the regulation. Cf Graham v. Estuary Properties, Inc., 399 So. 2d 1374, 1380 (Fla.), cert. denied, 454
U.S. 1083 (1981) (providing a similar analysis test to show whether a taking had occurred).
Florida courts have never found that historic designation in itself constitutes a taking of property under the
Fifth Amendment. See Metropolitan Dade County v. P.J. Birds, Inc., 654 So. 2d 170 (Fla. 3d DCA 1995); Estate of
Tippettv. City ofMiami, 645 So. 2d 533 (Fla. 3d DCA 1994).


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