The Economics of Historic Preservation

The National Trust for Historic Preservation provides several books and white papers discussing current research on the economic elements of recognizing a community as an historic district. Ample text is dedicated to showing that there are many economic benefits to historic preservation. Examples include that it is less costly to preserve rather than to demolish and rebuild (which has a secondary economic benefit of providing a lower cost way of maintaining residential and commercial real property stock in a community). Other studies show that Historic Preservation facilitates Heritage Tourism--a recreational activity that yields more revenue per tourist than other forms of tourism and that is occuring in larger numbers than other forms of recreational activities.

The secondary effect of this latter example is that the money spent by Heritage Tourists also generates increased revenues for local municipalities--more revenue than is generated by other forms of tourism or recreational activities.

Here, in the Chautauqua (aka, Mount Gretna Borough), however, the statistical reality that historic preservation activities provide the community with economic benefits could not be farther from reality.

In this community, there is much talk of the buildings and area being historic. In fact, the Chautauqua reports to the IRS every year that one of its "charitable" activities is the maintainence of historic buildings. BOth the Borough Council and the Chautauqua Board give overtures every so often that they are pursuing historic designation. The Chautauqua also tells the IRS that the purpose of its activities is to minimize the shareholder fee. However, if either local entity is indeed pursuing historic designation, it certainly can't be to generate revenue for the Chautauqua or for the Borough and its taxpayers.

How do we know we will never benefit from any economic benefit normally generated by Historic Preservation activities? Because we know that any revenue generated by Heritage Tourism, or any other form of recreational activity pursued here, only produces revenue for private entities--all private corporations, who, in recent decades, have never used their revenue to offset the cost of maintaining the infrastructure of this area (whether designated historic or not). In fact, pursuit of maintaining these local buildings and environs as historic as only served to "justify" outrageously inflated expenses and fiscal "leaks" that are never made transparent and for which the shareholder or the taxpayer can not follow the money spent.

Over $330,000 a year is spent on these endeavors--maintaining the area's historic buildings and environs, and neither the Borough nor the Chautauqua see fit to publish that fact to its taxpayers or shareholders. They hide it from you, lie to you, and misrepresent the truth to you.

In fact, the entity within the Borough that generates the largest revenue (from tourism) is the Borough Council President's and Gretna Water/Sewer Authority Boardmember's (Charles "Chuck" Allwein and son, Andrew "Drew" Allwein) Jiggershop. Not only does this private corporation NOT ever share its profits to help offset the infrastructure costs of providing the "bucolic" historic setting that it relies on for its marketing and branding, it actually results in being an economic burden on the community.

First, these municipal leaders-entrepenuers demanded a significantly below-market rate lease with the entity that is fiscally responsible for maintaining these allegedly historic buildings and environs--the Chautauqua. We shareholders could be leasing that site out for ten times what these municipal leader-entrepeneurs are paying and using that revenue to offset our annual shareholders fees. But that is not practiced here.

Second, the lease could also contain a profit-sharing clause--a lease term that is common practice every where but here in the Chautauqua (aka Mount Gretna Borough).

Third, in order to maintain the "historic" environs relied on in the Jiggershop owners' marketing and operations, the municipality and the landowner (the Chautauqua) must hire excessive "public works" staff, commit to municipal retirement benefits for this staff (in addition to paying for every other type of employee benefit you can imagine), hire and supervise parking staff,etc, etc. etc. This cost alone pulls over $350,000 out of OUR pockets, as it is covered by revenue generated from tax revenue and shareholder fees--without any attendant licensing fee, permitting fee, business operations fee, or profit-sharing arrangment imposed on these private business. Private businesses owned by municipal leaders that are enjoying significant profit from our continued passivity when it comes to demanding to be told exactly what money is going to whom and how often.

Thus, Historic Preservation--whether followed under a formal designation or followed in practice, as we see here, has actually turned out to be an economic sinkhole for us taxpayers and shareholders. So, the powers that be were right to scrap, file in the round file cabinet, or toss their pursuit of historic designation for any building or area in the Chautauqua or Mt. Gretna Borough. It simply would be a lot of effort that would only result in a formal legal obligation to use shareholder and taxpayer money to continue to fatten the profits of certain municipal leader-entrepeneurs.