Preserving History: Historic, New Markets Tax Credits Help Create Civil Rights Museum
By Caitlin Jones
5 min read
Usually a tax credit project generates local economic activity and jobs. In one case in Greensboro, N.C., it has preserved a chapter in history as well.
Funds raised with historic rehabilitation tax credits and the federal new markets tax credit were used to speed the completion of the International Civil Rights Center & Museum, a nonprofit-operated facility built to honor and explain the civil rights “sit-in” movement of the 1960s that helped lead to the elimination of segregated public facilities in the South.
The new museum, created from the rehabilitation of an historic landmark building, the former F. W. Woolworth five-and-dime store in downtown, opened on February 1, the 50th anniversary of a famous sit-in at the same Woolworth’s lunch counter that sparked similar sit-ins nationwide.
On February 1, 1960, four African-American students from a local university sat down at the store’s “whites only” lunch counter. They were refused service, and even taunted by some other white customers. Next day they returned to protest and demonstrate, joined by other supporters that grew in number by week’s end to 400.
“There were sit-ins as early as the “˜40s, but this sit-in, which lasted from February 1st to July 25th, was one of the longest and most sustained, and indeed is perceived as the catalyst for the movement. Within 60 days, more than 50 cities across the South had replicated what happened here in Greensboro,” says Amelia Parker, an executive of Sit-In Movement, Inc., the nonprofit that operates the International Civil Rights Center & Museum.
The demonstration eventually led to the desegregation of the Woolworth’s lunch counter and ultimately the system of segregation throughout the South.
Preserving Moment in History
Sit-In Movement, Inc. was founded to preserve the Greensboro site, and eventually purchased the vacant Woolworth’s building in the mid-1990s, using funds from a bank loan and charitable donations. “This was an historic landmark that the [nonprofit’s] founders came together to preserve so we would not lose this moment in history,” says Parker.
After acquiring the building, saving it from demolition for a parking lot, the nonprofit and its founders repaid the bank loan in a few years and started exploring how to renovate and convert the 1929 building into a museum. According to Parker, this was an enormous challenge, to bring a very old building up to modern codes, to renovate and transform the structure in a way that met federal historic preservation guidelines, and to raise the money to fund the job.
The local community, foundations, businesses, and others pledged an initial $4 million to help pay for design work and allow construction to begin.
Renovation took five years to complete, with setbacks along the way. “It was a construction challenge,” says Parker.
Accelerating Completion
As time passed and the work progressed, however, the nonprofit and its supporters tried to figure out how to speed up the completion of the museum so that it could open in time for the 50th anniversary of the Greensboro sit-in. This endeavor ultimately led to a new financing package, heavily made up of equity generated by federal and state historic tax credits and by the federal new markets tax credit (NMTC). Prices paid were $1.07 per dollar of credit for the federal historic credit and 55 cents for the state credit.
The tax credits, Parker explains, “allowed us to meet this deadline.”
Two separate allocations of NMTC authority totaling $28 million were provided by the community development entity of US Bancorp Community Development Corporation, based in St. Louis, and by Stonehenge Community Development LLC.
The Community Affordable Housing Equity Corporation (CAHEC), a multi-state tax credit syndicator based in Raleigh, N.C., syndicated the federal and state historic tax credits for the project and placed them with Winston-Salem, N.C.-based investor and regional bank BB&T, raising nearly $7 million in tax credit equity. Stonehenge Capital arranged for the NMTC equity investment by US Bank.
CAHEC was interested in participating in the project for several reasons, according to executive Chuck Newcomer. “One, North Carolina is in our home state, so we were very interested in doing things in our backyard. The project itself was a very high profile and notable project. And then, BB&T was also very interested in the project and had been a financial contributor to the project over the years.”
Said Dana Boole, president and CEO of CAHEC: “The opportunity to invest in and support the International Civil Rights Center and Museum furthers CAHEC’s mission – to build community value – not only through affordable housing developments, but through the renovation of historic properties such as this and other mixed-use developments.”
Newcomer describes the completed development as “a beautiful project – the integration of the historic elements of the building and the museum.”
Successful Outcome
The educational facility, which has 30,000 square feet of exhibits, including the original Woolworth’s lunch counter, has been a tremendous success on several counts.
“We’ve had in excess of 20,000 [visitors] the first two and a half months,” says Parker.
She noted, “The foot traffic has had an extraordinary economic benefit for our neighbors – benefits to area businesses, restaurants, and others. That has been most gratifying.”
(Details: http://www.sitinmovement.org)
