Old bank building is lone remaining historic structure that qualifies for state tax break

by: KEVIN GABOURY/CENTRAL OREGONIAN - The Old First National Bank Building on Main Street in Prineville is currently on the list of historic buildings participating in the state's Special Assessment Program and receives tax incentives.

Historic buildings in Oregon, including Crook County, that are listed on the National Register of Historic Places are eligible for tax incentives if certain criteria are met, including commitment by the owner to put the time and effort into keeping up the historic nature of the building.
   The Oregon State Historic Preservation Office (SHPO), located in Salem, offers two programs of historic property tax incentives, depending upon whether the property is used for residential or commercial purposes. Buildings must be listed on the national register to be considered.
   The Special Assessment Program, which applies to residential or commercial uses, freezes a property's assessed value for 15 years. It currently has around 842 participating properties statewide.
   Susan Haylock, special assessment coordinator with Oregon SHPO, explained the program like this:
   "How it works is the assessor locks in the assessed value at the time of application. For instance, if your assessed value when you apply is $125,000, then the assessor locks in that value for 15 years, so that every time the owner gets his or her tax bill, he or she is being taxed on the $125,000, not what its actual assessed value might be. So for 15 years, they're paying taxes on that locked value rather than the increase each year that the assessment gets."
   Since 1995, property owners participating in the program have been required to submit a preservation plan that outlines any significant rehabilitation that the building will undergo during the 15-year period. Some property owners have also opted for complete restoration projects, which according to Haylock are not required, but a lot of people carry out. SHPO approval is required for any interior and exterior work.
   An annual four-hour open house is also required.
   It is highly recommended by the SHPO that an application for the program be submitted before rehabilitation takes place in order to receive maximum benefit.
   "The idea behind this is that you lock in the value pre-rehabilitation. You're not going to get any value out of doing the rehab and then locking it in," Haylock said. "It's the best bang for the buck."
   Currently, the only building participating in the Special Assessment Program in Crook County is the Old First National Bank Building located at 247 N. Main St. in Prineville.
   The 15-year program has recently expired for two other properties in Prineville, the Thomas Baldwin house at 126 W First St. and the Marion Reed Elliot house at 305 W First St. For the bank building, the program will end on Jun. 30 of this year.
   The building itself, completed in 1905, was listed on the register in 1985 and began participating in the program in 1993.
   According to Haylock, proir to 1995, when the First National Bank went on the list, a preservation plan was not required and the owner "basically just had to do maintenance."
   However, between 1993 and 1998, the building underwent significant rehabilitation. Among the improvements mentioned by Haylock were: exterior painting, new awning, lobby and corridor improvements, bathroom remodel, interior painting, new bathroom installation, new carpeting new floors and new moulding.
   Also, the interior was divided in two offices with a lobby, wainscoting woodwork was installed to regain the character of the building and light fixtures were chosen to reflect the original feel.
   The building is currently owned and leased out by David Swan of Bend and houses Edward Jones Investments and Iverson Group.
   Swan could not be reached for comment.
   The other program is a federal tax program that offers income tax credits for commercial, income-generating properties only. If accepted, a business can receive a federal income tax credit equal to 20 percent of the rehabilitation costs.
   According to Haylock, the value of these projects is often higher because more rehab dollars are often put into commercial projects than residential.
   Haylock mentioned that Oregon was the first state to adopt a property tax program, doing so in 1975, and other states have patterned theirs after ours. A principal difference is that Oregon's tax benefits last longer.
   "I don't know if any others have ones that last as long as our 15 years," she said. "Most are five, eight or 10 years."
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