Matter of Trust Preservation: The Maryland Historical Trust employs various tools to help it locate and identify properties worthy of preservation.

September 29, 1996|By Scott Ponemone | Scott Ponemone,SUN STAFF

Does the idea of living in a turreted Victorian with wraparound porches dance in your head, but you can't imagine tackling all the restoration needs of an old house?

Have you found a striking, but rundown Early American townhouse for sale, but can't get financing for both the purchase price and restoration costs?

Does your home miraculously have most of its 1910 Arts and Crafts interior intact, but you don't how to protect it for generations to come?

The Maryland Historical Trust may have the answer -- and the answer may save you a great deal of money.

Take the case of Bill and Norma Grovermann, who anticipate a windfall because they have donated an easement to the trust on their unusual waterfront property in Centreville.

The couple bought what are known as the Captain's Houses in 1970 as rental properties. They consist of four one-bedroom, two-story houses joined as one around 1960. Bill Grovermann believes they were built as tenant houses in the 1880s by a Captain Ozman, hence the name.

He says they restored them as four one-bedroom rentals, and hope they stay that way.

"Knowing that I wasn't going to hold on to them forever, I was not going to let them deteriorate beyond my ownership," Grovermann says, explaining why he and his wife chose to donate an easement to the trust that would prevent any government or private action putting the historic character of the buildings at risk.

In turn, Grovermann knew such a gift easement would make the Captain's Houses "substantially less marketable." He had an appraiser establish a value for the gift, and consequently the Grovermanns' 1995 federal income tax return included that deduction -- $130,000.

Asked if the Internal Revenue Service has accepted the filing, Bill Grovermann says, "Well, they haven't said 'no.' "

The easement program is just one of the tools available to the Maryland Historical Trust in its mission to locate and identify significant properties in the state worthy of preservation.

J. Rodney Little, director of the trust, says that after it was set up in 1961, its mission meant saving "the George Washington-slept-here sort of place." But since then, the agency's purview has broadened to include archaeological sites, on land or even submerged -- like shipwrecks.

The bulk of its initiatives, however, are still directed toward properties. And most of those protected or eligible for protection are dwellings.

For homeowners of eligible properties, the Maryland Historical Trust offers loans for purchase, rehabilitation or pre-development (such as architect's fees); technical advice as well as a directory of preservation consultants; advice on securing a state income tax break on restoration costs; and the easement program. The trust also administers the U.S. Department of Interior's National Register of Historic Places for Maryland.

Eligible dwellings include those already listed on the National Register, within one of the state's 134 historical districts, signified as historic by a certified local government or of historic or architectural significance. About 49,000 structures in Maryland currently qualify, while several hundred additional structures are potentially eligible.

The age minimum for any dwelling is 50 years. This technically means the tract houses built after World War II, the houses many baby boomers first called home, are becoming eligible year by year now.

Michael K. Day, chief of the trust's Office of Preservation Services, describes the Historic Preservation Loan Program as "basically gap financing."

Applicants, whether for purchase, pre-development or rehabilitation, need to prove they were unable to secure sufficient private financing. This would more likely be the situation when the building in question is in need of considerable repair as opposed to a building in walk-in condition or in need of minor repair.

The trust then may lend the applicant the difference, or the gap, between the amount needed and what the banks are willing to lend. Prospective borrowers cannot seek funds from the trust for both the acquisition and the rehabilitation of the same property.

The loan rate is 5.35 percent, set by law at one-eighth point above the current state bonding rate. Loans for purchase or rehabilitation are made for up to 20 years.

Short-term loans (up to two years) may be made for pre-development work recommended or required by the trust.

"It's a first-come, first-serve process," Day says, but selection is also based on the significance of the property and the ability of the borrower to repay.

As a condition of the loan, the trust requires the successful applicant to convey to the trust a perpetual preservation easement on the property. Loan recipients, consequently, "waive the right to make an easement a gift," Day says.

Gift easement program

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