[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 
 HISTORIC PRESERVATION AND COMMUNITY DEVELOPMENT: WHY CITIES AND TOWNS 
            SHOULD LOOK TO THE PAST AS A KEY TO THEIR FUTURE

=======================================================================

                                HEARING

                               before the

                       SUBCOMMITTEE ON FEDERALISM
                             AND THE CENSUS

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 20, 2006

                               __________

                           Serial No. 109-262

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                      http://www.house.gov/reform



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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
JON C. PORTER, Nevada                C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas                BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia        ELEANOR HOLMES NORTON, District of 
PATRICK T. McHENRY, North Carolina       Columbia
CHARLES W. DENT, Pennsylvania                    ------
VIRGINIA FOXX, North Carolina        BERNARD SANDERS, Vermont 
JEAN SCHMIDT, Ohio                       (Independent)
BRIAN P. BILBRAY, California

                      David Marin, Staff Director
                Lawrence Halloran, Deputy Staff Director
                      Benjamin Chance, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

               Subcommittee on Federalism and the Census

                   MICHAEL R. TURNER, Ohio, Chairman
CHARLES W. DENT, Pennsylvania        WM. LACY CLAY, Missouri
CHRISTOPHER SHAYS, Connecticut       PAUL E. KANJORSKI, Pennsylvania
VIRGINIA FOXX, North Carolina        CAROLYN B. MALONEY, New York
BRIAN P. BILBRAY, California

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                     John Cuaderes, Staff Director
            Ursula Wojciechowski, Professional Staff Member
                         Juliana French, Clerk
            Adam Bordes, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 20, 2006...............................     1
Statement of:
    Fowler, John, executive director, Advisory Council on 
      Historic Preservation; Janet Snyder Matthews, associate 
      director for cultural resources, National Park Service; 
      Richard Moe, president, National Trust for Historic 
      Preservation; and John Leith-Tetrault, president, National 
      Trust Community Investment Corp............................     3
        Fowler, John.............................................     3
        Matthews, Janet Snyder...................................    15
        Moe, Richard.............................................    39
        Leith-Tetrault, John.....................................    51
    Neal, Idotha Bootsie, executive director, Wright Dunbar, 
      Inc.; Kathleen Crowther, executive director, Cleveland 
      Restoration Society and chairman, Statewide and Local 
      Partner Program, National Trust; J. Myrick Howard, 
      president, Preservation North Carolina; Edward Sanderson, 
      director, Rhode Island Historical Preservation and Heritage 
      Commission; and Ken Baumgartner, president, the Corky 
      McMillin Companies.........................................    87
        Baumgartner, Ken.........................................   182
        Crowther, Kathleen.......................................    94
        Howard, J. Myrick........................................   125
        Neal, Idotha Bootsie.....................................    87
        Sanderson, Edward........................................   166
Letters, statements, etc., submitted for the record by:
    Baumgartner, Ken, president, the Corky McMillin Companies, 
      prepared statement of......................................   184
    Clay, Hon. Wm. Lacy, a Representative in Congress from the 
      State of Missouri, prepared statement of...................   213
    Crowther, Kathleen, executive director, Cleveland Restoration 
      Society and chairman, Statewide and Local Partner Program, 
      National Trust, prepared statement of......................    97
    Howard, J. Myrick, president, Preservation North Carolina, 
      prepared statement of......................................   127
    Leith-Tetrault, John, president, National Trust Community 
      Investment Corp., prepared statement of....................    53
    Matthews, Janet Snyder, associate director for cultural 
      resources, National Park Service, prepared statement of....    17
    Moe, Richard, president, National Trust for Historic 
      Preservation, prepared statement of........................    41
    Nau, John L., III, chairman, Advisory Council on Historic 
      Preservation, prepared statement of........................     6
    Neal, Idotha Bootsie, executive director, Wright Dunbar, 
      Inc., prepared statement of................................    90
    Sanderson, Edward, director, Rhode Island Historical 
      Preservation and Heritage Commission, prepared statement of   168


 HISTORIC PRESERVATION AND COMMUNITY DEVELOPMENT: WHY CITIES AND TOWNS 
            SHOULD LOOK TO THE PAST AS A KEY TO THEIR FUTURE

                              ----------                              


                     WEDNESDAY, SEPTEMBER 20, 2006

                  House of Representatives,
         Subcommittee on Federalism and the Census,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m., in 
room 2154, Rayburn House Office Building, Hon. Michael Turner 
(chairman of the subcommittee) presiding.
    Present: Representatives Turner, Bilbray, and Foxx.
    Staff present: John Cuaderes, staff director; Ursula 
Wojciechowski, professional staff member; and Juliana French, 
clerk.
    Mr. Turner. Good morning. A quorum being present, this 
hearing of the Subcommittee on Federalism and the Census will 
come to order.
    Welcome to the Subcommittee on Federalism and Census 
hearing entitled, ``Historic Preservation and Community 
Development: Why Cities and Towns Should Look to the Past as a 
Key to Their Future.'' This is the subcommittee's second 
hearing on historic preservation. Last November, the 
subcommittee held its first hearing on this subject. That 
hearing sought to examine the impact Hurricane Katrina had on 
historically significant structures in Alabama, Mississippi, 
and Louisiana.
    Today, we will review how the Federal, State, and local 
governments are supporting historic preservation's efforts 
across the country. This subcommittee will examine what 
resources are available to preservation organizations and how 
they are used.
    Evidence suggests that preservation programs including tax 
credits and revolving funds have done more than restore 
dilapidated structures and prevent demolition of old buildings. 
Historic preservation has been increasingly recognized as a 
powerful tool for neighborhood revitalization and economic 
development. Preservation projects are catalysts for restoring 
life to old neighborhoods and factories, for creating new 
affordable and upscale housing, and for providing the amenities 
and living space that encourage new residents to return to 
older communities.
    My own experience in Dayton is just one example of how 
historic buildings coupled with the right Federal tools can 
provide an economic development resource. For example, while I 
served as mayor of Dayton, we started a successful neighborhood 
revitalization project called Rehabarama. This private-public 
partnership targeted one of Dayton's historic districts to 
acquire, via a non-profit, abandoned or severely dilapidated 
historic homes. These structures were completely rehabilitated 
using national historic preservation standards and the local 
design ordinance, and then these refurbished homes were 
decorated and opened for the public to see and eventually sold 
on the open market.
    The Rehabarama concept brought many benefits to Dayton. It 
changed neighborhoods for the better as it took dilapidated and 
undesirable housing into ones that were sought after by the 
buying public. Existing residents appreciated the elimination 
of old and abandoned properties which depress neighborhood 
housing values. In fact, the advent of the Rehabarama program 
has proven to be an impetus for existing homeowners to improve 
their own properties in anticipation of visitors. Rehabarama 
and the surrounding activity provided much needed work for the 
constructive and remodeling industry. Everyone benefits: the 
long term residents, new homeowners, and area businesses.
    Besides the physical improvements, positive promotion for 
the city of Dayton, and economic spinoff, Rehabarama provided 
an opportunity to form important partnerships which have gone 
on to spur other successful housing ventures. One Rehabarama 
sponsor was the Homebuilders Association. Rehabarama allowed 
the Homebuilders Association members to become familiar with 
the city of Dayton as a site for doing business. This new 
relationship led to the Citirama Program, an offshoot of 
Rehabarama. Citirama combines the restoration of historic homes 
with historically sensitive new construction on nearby vacant 
lots. Our first Citirama project was located in the Wright-
Dunbar Village, an area rich in history but poor in investment. 
Like Rehabarama, we were able to change neighborhoods but this 
time with new construction alongside of historic homes that had 
been purchased by the city and rehabilitated.
    I would like to emphasize that both Rehabarama and Citirama 
used a number of Federal programs including CDBG and Federal 
Historic Tax Credits.
    Historic preservation is about much more than saving a 
building. It is about revitalizing cities and towns.
    I am eager to hear from our panelists what approaches have 
worked, which have not, and where there are opportunities for 
improvement.
    On our first panel, we welcome remarks from John Fowler, 
executive director of the President's Advisory Council on 
Historic Preservation, and Ms. Janet Snyder Matthews, associate 
director for cultural resources at the National Park Service. 
We will then hear from Mr. Richard Moe, president of the 
National Trust for Historic Preservation, and Mr. John Leith-
Tetrault, president of the National Trust Community Investment 
Corp.
    On our second panel, we will hear from Ms. Idotha Bootsie 
Neal, executive director at Wright Dunbar, Inc., and Ms. 
Kathleen Crowther, executive director of the Cleveland 
Restoration Society and chairman of the Statewide and Local 
Partner Program of the National Trust. Then, Mr. Myrick Howard, 
president of Preservation North Carolina, and Mr. Edward 
``Ted'' Sanderson, director of the Rhode Island Historic 
Preservation and Heritage Commission, will provide their 
testimonies. Last, the subcommittee will hear from Mr. Ken 
Baumgartner, president of the Corky McMillin Companies.
    This committee has as its policy that each of the witnesses 
are sworn in. So, before we begin, we will ask each of the 
witnesses to stand and be part of the oath.
    [Witnesses sworn.]
    Mr. Turner. Please let the record show that all of the 
witnesses have responded in the affirmative.
    Now each of the witnesses has kindly prepared written 
testimony which will be included in the record of this hearing.
    The witnesses will notice that there is a timer with a 
light on the witness table. The green light indicates that you 
should begin your prepared remarks, and the red light indicates 
that your time has expired.
    With that, I would like to recognize Mr. Fowler.

STATEMENTS OF JOHN FOWLER, EXECUTIVE DIRECTOR, ADVISORY COUNCIL 
  ON HISTORIC PRESERVATION; JANET SNYDER MATTHEWS, ASSOCIATE 
DIRECTOR FOR CULTURAL RESOURCES, NATIONAL PARK SERVICE; RICHARD 
 MOE, PRESIDENT, NATIONAL TRUST FOR HISTORIC PRESERVATION; AND 
   JOHN LEITH-TETRAULT, PRESIDENT, NATIONAL TRUST COMMUNITY 
                        INVESTMENT CORP.

                    STATEMENT OF JOHN FOWLER

    Mr. Fowler. Thank you, Mr. Chairman.
    Chairman Nau sends his sincere regrets that he was unable 
to come to D.C. for this hearing today. He certainly 
appreciates the interest of the subcommittee in this subject, 
and he is particularly grateful for your personal commitment as 
the leader of the House Historic Preservation Caucus.
    Chairman Nau's statement makes a persuasive case for the 
value of historic preservation for strengthening America's 
communities. He cites the economic impact of historic property 
rehab through job production and support of local business. He 
notes rehabilitation encourages neighborhood investment, and he 
notes the establishment of historic districts stabilizes 
neighborhoods and leads to higher property values.
    His statement also stresses the importance of heritage 
tourism. Heritage tourism is a $200 billion industry 
nationwide. Heritage tourists spend more and stay longer, and 
they comprise the most rapidly growing sector of the tourism 
industry. As a result, heritage tourism makes a substantial 
contribution to sustainable historic preservation.
    The Advisory Council on Historic Preservation has two 
responsibilities relevant to our topic today. As manager of the 
Federal Historic Preservation Planning Process, Section 106, it 
affects many of the decisions that are made at the community 
level. As advisor to the President and Congress, it has 
initiated a preservation program that is having substantial 
impact across the country. Under Section 106, annually, over 
100,000 Federal and federally assisted projects potentially 
affecting historic properties are reviewed by State Historic 
Preservation Officers under procedures set up by the ACHP. Many 
of these shape the fabric of our Nation's communities: HUD-
funded housing rehab, economic development grants from the 
Commerce Department, Department of Agricultural Rural 
Development Loans and Grants, and so on. Through careful 
consideration of historic preservation impacts under Section 
106, Federal assistance becomes a catalyst for enhancing, 
rather than destroying, community fabric.
    Our second role as Presidential Advisor has produced the 
Preserve America Initiative, the first governmentwide historic 
preservation initiative which is led by the First Lady Laura 
Bush. Details of the Preserve America Initiative are in Mr. 
Nau's statement. What I would like to do is highlight some 
particularly relevant aspects of the initiative as they relate 
to the subject of this hearing.
    First is the concept of Preserve America Communities. This 
process provides recognition of communities that preserve and 
use their heritage assets to promote community vitality and 
economic development through heritage tourism. There are 
currently 400 Preserve America Communities in 48 States across 
the country. They range from Charleston, SC, and Dayton, OH, to 
Chinatown in Honolulu and Rabbit Hash, KY, with a population of 
14.
    The second component that I think is relevant to the topic 
today is the Preserve America Grants. This is a new grants 
program that was authorized by the Congress in fiscal year 2006 
and is administered by the National Park Service in 
consultation with the ACHP. $5 million were available this year 
and were handed out to a total of 68 recipients in 32 States. 
These grants are designed to promote innovative strategies for 
advancing heritage tourism in local communities. The round two 
grant winners were just announced yesterday, I am pleased to 
report.
    The third aspect of the program that I would like to 
mention is our work with Federal Agencies to make Federal 
assistance more readily available to support Preserve America 
goals and Preserve America Communities. We have done this by 
working with agencies to get special consideration and 
preference points for Preserve America Communities. An example 
is the Department of Agriculture Rural Development 
Administration Community Facilities Loan and Grants Program 
which gives points for Preserve America Communities.
    Preserve America focuses on encouraging and supporting 
historic preservation at the local level, and it continues to 
be a growing program that we are very excited about.
    In closing, I would like to note that this year marks the 
40th Anniversary of the National Historic Preservation Act. On 
October 18th through 20th, the First Lady will host the 
Preserve America Summit in New Orleans. 400 preservation 
leaders and stakeholders will celebrate the achievements of the 
National Historic Preservation Act and consider ways to make 
the National program even more successful in the future.
    We appreciate the support of you, Mr. Chairman, and the 
Subcommittee for the Preserve America Initiative and for 
furthering historic preservation as a key community 
revitalization strategy.
    Thank you.
    [The prepared statement of Mr. Nau follows:]

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    Mr. Turner. Dr. Matthews.

               STATEMENT OF JANET SNYDER MATTHEWS

    Ms. Matthews. Thank you, Mr. Chairman. Thank you for the 
opportunity to present information on tax incentives and grants 
administered by the National Park Service; Historic 
Preservation and Community Development: Why Cities and Towns 
Should Look to the Past as a Key to Their Future.
    Forty years ago, Congress, through the National Historic 
Preservation Act, provided historic preservation grants. They 
recommended legislation and legislated it to authorize grants 
to State and local governments to carry out inventory and 
survey programs in coordination with the Park Service. They 
established the Historic Preservation Fund, a matching grant 
program. In 2005 and 2006, Congress appropriated over $70 
million. Requiring a non-Federal cost share for each grant, HPF 
grants serve as catalysts, seed money. At least 10 percent of 
each State allocation is subgranted to certified local 
governments.
    In 1999, Congress and the executive branch created the Save 
America's Treasures Grant Program. Historic properties and 
museum collection grants are awarded using funds appropriated 
by Congress. Private partners including the National Trust work 
to raise non-Federal funds to match the Federal grants. 
Projects are diverse. They include the city bus on which Rosa 
Parks refused to give up her seat as well as the World Heritage 
Site of Pueblo ruins in Mesa Verde, Colorado.
    The Preserve America Grants component, begun in 2006, ends 
off a White House 2003 initiative championed by First Lady 
Laura Bush. Designations and awards in support of communities 
recognize, designate, and protect local cultural resources. 
This reflects decades of local ordinances, listings, and 
grassroots work to revitalize community for economic 
revitalization.
    In 2006, Congress appropriated $4.9 million for the HPF for 
Preserve America. Dayton, OH is going to complete an economic 
analysis of historical tourism and develop and implement a 
heritage tourism marketing strategy under one of those grants.
    This Spring, Congress appropriated $43 million for the HPF 
to Alabama, Louisiana, and Mississippi for the stabilization, 
rehab, and repair of properties listed in or eligible for the 
National Register. The subject of that disaster relief was your 
2\1/2\ hour hearing last November for which I think every 
single panelist and every person in this room is extremely 
grateful, Mr. Chairman. In New Orleans, grant funds under that 
relief for the first time will be appropriated for owners of at 
least 200 historic personal residences, rebuilding a city that 
encompasses 20 National Register historic districts.
    NAGPRA, the Native American Graves Protection and 
Repatriation Grants to museums, Indian tribes, Alaska Native 
Villages and corporations, Native Hawaiian organizations assist 
in the reburial of the Native Americans and the cultural items 
that were buried with them.
    The American Battlefield Protection Grants that Congress 
appropriates protect and preserve battlefield lands by means 
other than direct Federal intervention and acquisition. Since 
1998, Congress appropriated $28.9 million from the LWCF to 
assist State and local governments in acquiring Civil War 
battlefields outside the legislative boundaries of National 
Park units.
    Ten years after the National Historic Preservation Act, the 
Tax Reform Act of 1976 provided tax incentives, creating our 
very first Federal income tax incentives for preservation. For 
the first time, owners of historic buildings were allowed to 
claim accelerated depreciation rehab of historic buildings. In 
partnership with the Internal Revenue Service, the National 
Park Service administers this important and growing program.
    Through the Revenue Act of 1978, Congress provided the 
first income tax credit for rehab. The Economic Recovery Tax 
Act of 1981 increased the tax credit from 10 to 25 percent. The 
Tax Reform Act of 1986 lowered the credit from 25 to 20. Last 
year, over 1,100 projects were approved. One of those will be 
here today. Since 1977, over 33,000 projects represent more 
than $36 billion in private investment to revitalize 
communities.
    Dozens of States have created State incentives including 
State income tax credits.
    In our Nation's Capital, Congress passed the Union Station 
Redevelopment Act, creating a public-private partnership to 
preserve the building. Private developers used new tax 
incentives to rehab the building for mixed use. It still is a 
train station today.
    Mr. Chairman, we brought copies of a review of the tax 
incentive program that was approved last Friday by the National 
Park System Advisory Board which recommends to the Secretary of 
the Interior and the National Park Service Director their 
findings on looking at what the National Trust, the National 
Conference of State Historic Preservation Officers, and the 
Historic Preservation Development Council recommended in 2002 
and 2003. We undertook, in 2005, a review of this and have come 
up with recommendations and an implementation schedule, and we 
have copies of this here for you today, brand new, hot off the 
press.
    Thank you, sir.
    [The prepared statement of Ms. Matthews follows:]

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    Mr. Turner. Thank you for this. I look forward to reviewing 
it and seeing what you found.

                    STATEMENT OF RICHARD MOE

    Mr. Moe. Thank you, Mr. Chairman. As you know, the National 
Trust was chartered by Congress some 57 years ago, and ever 
since then, we have been working with the Congress and with our 
partners around the country to try to save America's heritage.
    At the outset, Mr. Chairman, I want to thank you for 
holding this hearing on a very important issue, and I am so 
pleased that you mentioned your experience in Dayton because 
that is precisely the kind of informed experience that will 
help us to sharpen our public policies. I want to say also that 
the last hearing you held on historic preservation had a 
profound impact and was very significant in persuading the 
Congress to enact legislation enriching the tax credit for the 
impacted area in the Gulf Coast and for providing $40 million 
in grant funds to historic resources. So I thank you for your 
leadership there and in so many ways.
    The Trust has long recognized the links between historic 
preservation, community revitalization, and housing: 32 percent 
of the households below the poverty line and 34 percent of 
renters whose household income is less than $20,000 per year 
live in older and historic homes. That is a very significant 
statistic. Of the Nation's over 12,000 historic districts which 
comprise a million contributing structures, 60 percent of those 
overlap census tracts in which the poverty rate is 20 percent 
or greater. So there is a tremendous need for incentives to 
create housing and to stabilize neighborhoods in these areas.
    As Jan Matthews has mentioned, one of the principal Federal 
incentives for rehabbing older and historic buildings is the 
Historic Rehabilitation Tax Credit. It is the Federal 
Government's largest historic preservation program and probably 
its most important. Although it has been widely used as an 
effective tool for bringing vacant and abandoned buildings back 
onto the tax rolls and, in some cases, providing safe, decent, 
and affordable places to live, it must be improved so that it 
can truly realize its fullest potential. So far, it has been a 
catalyst for commercial reuse and reinvestment in historic 
resources. It has helped to build 170,000 housing units; 60,000 
of which are affordable.
    The rehab credit should be easier to use, especially in 
projects that twin the incentive with the Low Income Housing 
Tax Credit or, in other words, for smaller Main Street-oriented 
projects. Last year, Section 47 produced more than 15,000 units 
of housing across the country and nearly 40 percent of those 
fell into the affordable category, but it can do a lot more.
    The Trust has worked with several teams of experts and has 
concluded that certain structural features in the rehab credit 
are actually impeding their expanded views, especially as tools 
for affordable housing. It has been almost two decades since 
Congress has revisited Section 47 of the Code, and we think it 
is time that it does so again.
    Our work has led to the introduction of the Trust's No. 1 
legislative priority, H.R. 3159 which is the Community 
Restoration and Revitalization Act introduced by Congressman 
Phil English and William Jefferson. Mr. Chairman, I am very 
grateful for your original co-sponsorship of this bill. It now 
has 67 co-sponsors, and we are expecting Senate introduction 
very shortly. It is endorsed by such organizations as 
Preservation Action, the National Council of State Historic 
Preservation Officers, the American Institute of Architects, 
and the Affordable Housing Tax Credit Coalition. It would make, 
in short, five substantial changes to the rehab credit so that 
it can be more effectively used in community revitalization and 
particularly in housing and in smaller so-called Main Street 
type deals.
    I hope that every Member of this body will co-sponsor this 
legislation. My colleague, John Leith-Tetrault will very 
shortly let you know about some of the specifics in the bill.
    This bill is just a first step in making the rehab credit 
work as effectively as possible. I hope that Congress will 
foster and expand tax incentives like this. Protecting tax 
credits is particularly important at a time when the rehab 
credit and other credits that work in conjunction with it to 
improve neighborhoods, such as the New Markets Tax Credit and 
the Low Income Housing Tax Credit, may be vulnerable to changes 
in the tax code and the tight budget climate up here.
    It is important to note that the greatest need in America's 
oldest and historic neighborhoods remains an equivalent to the 
Section 47 historic rehab credit for owner occupied homes. You 
are going to be hearing more about this later this morning, I 
believe, but it would be a very important and logical extension 
of the existing tax credit.
    Let me mention just a few other Federal incentives and 
programs that are of particular interest. Mention has been made 
of the State tax credits. In recent years, it has been a high 
priority of the National Trust to build the capacity of State 
preservation organizations and through them to increase the 
number of States that have State tax credits. There are now 
some 27 or 28 such States, and we think that legislation in the 
Congress could encourage that number even more.
    The National Park Service does a tremendous job at 
administering the Federal Historic Tax Credit, but there is 
much more that could be done to expand the universe of 
projects. Dr. Matthews has mentioned the report that has come 
out that is very important.
    Finally, the Historic Preservation Fund which is the fund 
that is so critically important to the State Historic 
Preservation Offices, it is chronically underfunded, and we 
think that not only should it be increased for the States but 
also for Save America's Treasures and Preserve America.
    I could go on, Mr. Chairman, but my time is up. Thank you 
very much.
    [The prepared statement of Mr. Moe follows:]

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    Mr. Turner. Thank you.
    I want to recognize that we have been joined by Mr. Bilbray 
from California and then turn to Mr. Leith-Tetrault for his 
testimony.

                STATEMENT OF JOHN LEITH-TETRAULT

    Mr. Leith-Tetrault. Thank you, Chairman Turner. I 
appreciate this opportunity to testify today. My testimony will 
focus on the Federal Rehab Tax Credit or what I will call 
during this testimony, the RTC, and some of the technical 
amendments that Mr. Moe has mentioned that would increase the 
effectiveness of these Federal incentives for historic and 
older building rehab.
    NTCIC or the National Trust Community Investment Corp. is a 
for-profit subsidiary of the National Trust that furthers the 
mission of the Trust by investing private capital in historic 
and older buildings that quality for the RTCs. Any profits 
earned by NTCIC are upstreamed to the National Trust to support 
its charitable mission.
    NTCIC, over the past 5 years, has invested $158 million to 
help rehabilitate 37 projects with aggregate development costs 
of $694 million. NTCIC is also an industry leader in the 
twinning of the RTCs and the New Markets Tax Credit with its 
awards of $180 million in new markets allocations since 2003. 
Bank of America has been our primary investor and a terrific 
partner with us in this effort from the beginning.
    As Jan Matthews mentioned, the RTCs really got started with 
the Reagan administration's 1981 economic stimulus package. 
These statutes were amended significantly by the Deficit 
Reduction Act of 1984 which limited the use of the RTCs by non-
profit sponsors. As she had mentioned, the 25 percent credit 
was amended in 1986 to become a 20 percent historic credit and 
the two non-historic building credits were collapsed into one 
10 percent rehab credit for buildings built before 1936. 
Finally, the Gulf Opportunity Act increased the Federal rehab 
credits to 26 percent and 13 percent for the 3-year period 
after Katrina for the go-zone.
    Data for 2005 indicates that $5 billion in Historic Tax 
Credit activity was spread over 1,100 projects at a cost to the 
U.S. Treasury of about $740 million in Federal credits, a 
leverage ratio of 6.67 to 1. The program is growing very 
quickly, and qualified rehab expenditures have increased over 
300 percent since 1999. One of the reasons for that is that, as 
others have mentioned, States have adopted piggyback status 
direct tax credits over the past 18 years. Second, what is 
fueling the increases in the use of the rehab tax credit is the 
rollout of the New Markets Tax Credit Program. NTCIC research 
indicates that 68 percent of all rehab tax credit projects are 
located in low income new markets eligible census tracts. And 
so, the twinning of these credits has become a very popular 
tool for adapting historic properties to meet the needs of low 
income communities.
    Utilization of the RTC varies greatly by State. In 2005, 
Park Service statistics indicate that Ohio and North Carolina, 
Virginia, Massachusetts, Pennsylvania, and Missouri were the 
top six users of the Federal credit, and interestingly, four of 
those top six have very strong State historic tax credits.
    NTCIC has led the industry in developing research 
methodologies for measuring the impact of historic tax credits. 
Working with Rutgers University, we have developed the 
Preservation Economic Impact Model which, in 2005, estimates 
that the RTCs generated over 46,000 construction jobs, 59,000 
permanent jobs, and about $364 million in State and local 
taxes.
    NTCIC and the National Trust conducted a national study in 
2001 to look at the barriers to greater use of the Federal 
rehab tax credits. The study concluded that the keys to broader 
use were, first, simplify the process and lower transaction 
costs, increase the tax incentive for smaller projects, provide 
incentives for low income area targeting, and last, increase 
credit targeting to downtown growth generators particularly 
housing, entertainment, and cultural facilities.
    With these goals in mind, H.R. 3159 was reintroduced in 
2005. The bill promotes the use of the RTCs on smaller projects 
by providing for a 40 percent credit on the first $1 million in 
qualified rehab expenditures. The bill also makes the 10 
percent rehab credit more broadly accessible to small 
businesses by indexing the eligibility date for buildings. The 
bill provides RTC projects with the same 130 percent basis 
boost currently afforded to low income housing tax credit 
properties in HUD-designated difficult to develop areas. It 
promotes downtown affordable and market rate housing. It 
promotes affordable housing by eliminating the basis adjustment 
that is currently required when combining the RTCs with the Low 
Income Housing Tax Credit. H.R. 3159's condo provision allows 
for early provision of RTC rental projects to condominiums, 
promoting a deeper home ownership base in cities and small 
towns.
    Last, theaters and other cultural facilities are critical 
to sustaining 24 hour cities. However, the disqualified lease 
rules, as enacted by Congress in 1984, make these RTC 
transactions harder and more expensive, particularly if non-
profits are the sponsors. H.R. 3159 would eliminate three of 
the four disqualified lease rules, making these projects such 
as downtown theaters much more transaction-efficient and easier 
to do.
    Again, I want to thank you, Congressman Turner, and the 
subcommittee, for the opportunity to testify, and I welcome 
your questions.
    [The prepared statement of Mr. Leith-Tetrault follows:]

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    Mr. Turner. Well, I want to thank all of you for your time 
being here today and also for the time it took to prepare.
    One of the things that I think is important in having a 
hearing like this is to communicate the effectiveness of 
programs that are out there, instill some enthusiasm in those 
who are currently not using the programs by allowing them to 
see some things that have worked in communities and the tools 
that are available, and then also have a critical look at ways 
that we can improve what we have so that we can be more 
effective. All of you in your testimony have done a great job 
in that.
    I am going to give you one softball question first before 
we get down to the nitty-gritties because I really do think in 
addition to improving the projects that we have and the 
programs that we have, one of the tasks that we have is 
communicating to people the availability of these programs and 
the effectiveness of these programs so that they can be used. 
Many times, even if you look at New Market Tax Credits or 
Historic Tax Credits, the awareness level of the availability 
of these tools that can be an impetus for new projects or for 
projects that are underway that could be more successful if 
these tools were employed, is a factor.
    Could we first do a round of each of you telling us what 
you think needs to be done for us to more effectively 
communicate out to communities and to developers and those who 
could utilize these programs so they can make an impact in our 
communities?
    John, we will start with you.
    Mr. Fowler. Well, if that is a softball, I am not sure I am 
ready for the hardballs then. This is not exactly the ACHP's 
realm of interest. I mean we use, obviously, the internet as 
our primary vehicle for getting information about our 
activities, about the preservation program, out to the 
communities and to users.
    One of the things that has come up in the issue panels that 
are working on issues going to the Preserve America Summit in 
October is exactly the question that you pose, though, and that 
is how can we make the information about programs that are 
managed by the Federal Government more accessible to users. One 
of the things that has been suggested to be considered is to 
improve sort of a national preservation clearinghouse. There is 
currently the preservation portal that is managed by the 
National Park Service, which is an excellent resource for 
accessing information about the Federal program, but I think 
there is a lot of sentiment that we could build from that and 
use that vehicle to have one-stop shopping, if you will, for 
Federal assistance and Federal programs that can be used by 
stakeholders.
    So I think that would be our suggestion, and I would be 
happy to keep the committee apprised of the development of that 
idea as the Summit goes forward because that was an important 
point that came up in our discussions.
    Ms. Matthews. Mr. Chairman, I think I will go straight to 
this National Park System Advisory Board adoption of last 
Friday, which is hot off the press.
    We are looking at four tasks. One is interpretation of the 
Secretary of the Interior's standards and making more user-
friendly the requisites for windows, interior treatments, new 
additions, related new construction--you alluded to some of 
that in your Dayton project--and the modern day requirements, 
and new environmentally certified technology. The standards are 
what the standards are, but the Trust, the National Conference 
for State Historic Preservation Officers, and the Historic 
Preservation Development Council among our private partners and 
public partners asked for us to have a look at those, how we 
can make those requirements under the Secretary of Interior's 
standards more understandable up front when a project begins. 
That is one.
    Our second one is Web-based guidance on interpreting the 
standards that consultants can turn to, improving the 
application process; and then task three, reevaluating and 
revising our policy concerning functionally related complexes; 
and then an oversight task force that will see that the things 
we have been urged by our public and private partners to do 
will be implemented by the National Park Service by December 
2007. It is an ambitious schedule. It has been a lot of hard 
work on the part of the Advisory Board Committee. We had 
investors. We had private consultants. We had members of the 
ACHP. We had a National Park Service rep, a National Conference 
for State Historic Preservation Officers rep, and professionals 
in the field. So we tackled a tough task at their request. We 
moved forward with it. We intend to implement it very 
seriously. That is one thing we can do.
    We also asked about, I think, how programs like the Native 
American Graves Protection and Repatriation Act work and how we 
can improve those. I can tell you that those are moving 
forward. There are sacred ceremonies when humans are 
repatriated with the agreement of all the tribal descendants 
involved. Usually, they are not very public. The one that 
occurred in Mesa Verde, April 20th, had no publicity 
whatsoever. It required the consent and the involvement of over 
11 years of consultation among 23 Pueblos, Apaches, the Navaho 
and Hopis and others to reach a time at which on a day selected 
people were buried, 1,500 humans and 4,500 funerary objects 
that came off the shelves of repositories affected by Federal 
activity across the country. These are powerful, quiet, sacred 
things, and they are moving forward.
    Last, I would mention that we are working very hard to be 
directly involved from day one with a private developer such as 
the McMillin Co. in Mr. Bilbray's district, to work with him 
from day one, hand in hand with SHPO. So we did not have a 
moving target. In the case of Mr. Bilbray's district, we are 
working with an excellent State Historic Preservation Officer, 
Mr. Donaldson, hand in hand on the Secretary of Interior's 
standards and how they apply to that several hundred acres 
Naval Training Center, and that huge project was undertaken. We 
have sent our own staff people twice for site visits to that 
very complex undertaking.
    The goal is to work well with the private sector so that 
these projects go forward and revitalize communities and have 
an economic impact.
    Thank you.
    Mr. Moe. Mr. Chairman, I have a little different take on 
this. I am not sure that the primary issue here is not the fact 
that the tax credit availability is not that well appreciated. 
I think one of the reasons why we have seen such success in 
urban revitalization in recent decades is the fact that we do 
have developers, accountants, other practitioners who really do 
understand how to access the tax credit.
    As you recall, even though you weren't here at the time, 
the 1986 Tax Act largely eviscerated the tax credit as it 
existed then. A lot of people thought it was really all but 
dead. But thanks to the ingenuity and creativity of a lot of 
developers and others, we have learned how to access it. 
Activity under the credit has soared, and we see the evidence 
of it in virtually every city in America.
    We very actively market the credits. As John Leith-Tetrault 
will tell you in a moment, we actually syndicate the credits. 
So we have a special incentive to market them.
    I don't think the problem is so much that developers aren't 
aware of how to access the credit. The problems are the ones 
that we have already talked about: the lack of clarity 
sometimes in the application of the Secretary's standards, the 
ease of access, the issues that have been addressed in this 
report that Dr. Matthews referenced.
    The other problem is trying to make the credit more 
available for less costly projects. For example, it is very 
hard to justify the transaction cost in applying the credit for 
projects under $2 million. Through Congressman English's bill, 
that will be made much easier by deepening some of the values 
of the credit and so forth. So I would put the emphasis there.
    Obviously, the Park Service and the State Historic 
Preservation Offices are both underfunded, and they could use 
greater funding, not only in terms of administering the credit 
but in terms of making its benefits better known.
    Mr. Leith-Tetrault. I would echo some of the comments of 
Jan Matthews and Dick Moe. I think passage of H.R. 3159 is 
critical. That bill identifies what developers have told us are 
some of the issues with using Section 47.
    I think the overall impression, and you will be hearing 
from some developers later on another panel. The general 
impression of the Historic Tax Credit is it is difficult to 
use, and when you look at it and recognize that it has not had 
a technical amendment made through advocacy and the historic 
preservation movement since the 1980's, there is built up a 
whole list of issues and concerns that take up how they 
generate a lot of transaction costs. The benefit, too much of 
the benefit of the credit is going to pay lawyers and 
accountants to get accounting and legal opinions and not enough 
going to bricks and mortar. So the technical fixes that are in 
H.R. 3159 are critical. Once we have that bill passed, we need 
to then take that bill on the road and help everyone understand 
what are some of the fixes, what are some of the ways that the 
credit is now easier to use.
    I would applaud the Park Service's efforts on its Advisory 
Committee on the standards. All of us in preservation have been 
hearing, for years, complaints from developers about 
inflexibility. Preservation is what it is, but I think that the 
conclusions and recommendations of that committee will go a 
long way to answering some of those concerns.
    One of the things we don't do well in preservation, I 
think, is reach out to other constituencies. We had several 
testimonies this morning indicating that with the Historic Tax 
Credit, Congress has always recognized the important of using 
historic buildings to promote other causes--affordable housing 
being one; economic development in low income communities being 
another--so that the New Markets Tax Credit can be twinned with 
the Historic Tax Credit. The Low Income Housing Tax Credit can 
be twinned. But as preservationists, we need to recognize that 
deep nexus with community development and begin marketing our 
credit more effectively to affordable housing advocates and 
community development advocates.
    That is the world I come from. I can tell you when I went 
to community development conferences years ago, you never saw 
people from the preservation community coming to talk about the 
rehab tax credit, and likewise at preservation conferences, you 
rarely see conversations about other credits that can be 
twinned. So we need to do a better job at that.
    One thing we have started doing recently is we are, through 
NTCIC, trying to mobilize the Trust's State and local partners, 
State and local preservation organizations. So we are on the 
ground and know where these projects are being planned, and we 
are actually offering a referral fee to those, to our 
constituency to bring us projects in an effort to get the 
preservation community locally more in touch with the 
development community so that these projects can be identified 
and there can be marketing one on one with those developers.
    I would say last that one of the things we are beginning to 
do more effectively is go to the local markets and hold 
breakfasts and lunches with groups of developers. We have a Web 
site. We have marketing materials at the national level, but 
there is nothing that replaces a discussion with a dozen or so 
developers around the table at breakfast to talk about this 
credit and show some slides about what its impact has been and 
then staying over a day and talking with developers 
individually about what they can do to access the credit, and 
we are going to begin doing more of that.
    Mr. Turner. Before I get to Mr. Bilbray, I do have one more 
question, and then we will do a second round of questions.
    I want to tell you about an experience that I had yesterday 
and ask for your anecdotal thoughts on this. Many times when we 
talk about historic preservation, we talk about the fabric of a 
community, utilizing the historic nature of either what had 
occurred at a place in the community or an architecturally 
significant building and utilizing that to attract capital to 
turn around the building or a specific community or 
neighborhood. We talk about the leveraging of dollars that has 
happened, and we talk about communicating to the next 
generation of the significance of what occurred. But the shift 
of pride that happens, that community impact, is something that 
usually, in the discussion of what we have accomplished, is 
evident but lost in the discussion.
    I want to tell you about an experience that I had yesterday 
that brought it home to me and that it is something that 
applies everywhere.
    Yesterday, I welcomed Chairman Charles Taylor into my 
community, subcommittee Chair of Appropriations-Interior, and 
that includes areas of historic preservation, and we went into 
two spots in my district. First, we went to the Wright-Dunbar 
area; and we went to the home of the Wright Brothers, which is 
Hawthorn Hill, and showed him those historic sites, again, that 
go to a historic happening, and we also went to a bridge in 
Lynchburg, Ohio, in my district which is a very rural area and 
it is a covered bridge that was originally built in 1870. It 
spanned two counties which made it significant to two different 
communities, two counties that are in my district. The 
communities had come together almost in a barn-raising fashion 
to restore this bridge. They still have a ways to go on the 
undercarriage and the foundation of the bridge, but the upper 
structure, they were able to restore.
    As we were walking through the bridge with the county 
commissioners and the individuals that had, again in a 
community barn-raising style fashion, restored this covered 
bridge, they showed us the places where the bridge had been 
subject to vandalism before its restoration. They talked about 
fires. This is where the first fire occurred; this is where the 
second fire occurred. But yet, the bridge survived and was able 
to be restored.
    So, inevitably, the question came: Well, what are your 
fears about vandalism now that you put forth all this effort 
and you have this beautiful covered bridge that has been 
restored?
    They said: We really haven't had any. There is this new 
respect for the bridge and what has been accomplished, and we 
haven't really had to put a great deal of effort to cause this 
bridge to be protected. People come here. They have a sense of 
reverence for what has occurred in the past, and now the bridge 
has not been subject to vandalism.
    Each of you, as you have looked through both communities 
and projects, you know that sense of pride and change that has 
occurred.
    Dick, why don't we start with you? Then others can chime in 
with their thoughts of how this doesn't just result in 
leveraging ratios and bricks and mortars buildings being 
restored, that there is an impact that occurs on the spirit of 
the community.
    Mr. Moe. Well, you are exactly right, Mr. Chairman. The 
kind of pride that people have felt in your district over that 
bridge or over the Wright-Dunbar neighborhood is what people 
feel everywhere when a preservation project has been undertaken 
and undertaken right. It is not just bricks and mortar. It is 
not just the economic benefits, but it is the community pride. 
What is at the end of this at the end of the day is a sense of 
community, and that is why I believe a sense of community can 
be deepened and enriched by an appreciation of the history that 
occurred there, as represented in the built environment. It 
doesn't have to be all historic. It can be historic mixed with 
new construction, and it takes different forms in different 
places.
    But, as John Kenneth Galbraith said some years ago, no one 
has ever retroactively disliked a preservation project, which I 
think is accurate because you see a hulk of an old building or 
a burned out old bridge and you say, how can this be brought 
back, but once it is brought back through the vision and 
commitment of people who really care about this, everybody 
takes pride in it.
    I think that one of the under-appreciated facts of historic 
preservation is that, particularly in inner city older 
neighborhoods, when preservation works, it instills community 
pride and respect for the community and respect for your fellow 
human being.
    Mr. Turner. Would anyone else like to share their comments?
    John.
    Mr. Fowler. I would echo what Dick said just very briefly, 
in that the ACHP's experience in the Section 106 process is 
that we often see that happening where resources are non-
appreciated at the beginning of the process, if you will. When 
an agency is coming in and planning to do something in a 
community and through the requirement that there be a 
consideration of the historic value, there becomes a broader 
understanding within the community and there becomes a rallying 
point in support. We just see this repeatedly by simply having 
a stop, look, and listen kind of process that gives people an 
opportunity to say this is important to me and to express that 
more broadly to their community.
    Mr. Leith-Tetrault. I would agree, and I would also look at 
it from an investment vantage point and a financial vantage 
point as well. Historic buildings, because they tend to be 
large, very visual, the results are beautiful. They tend to 
occur in low income areas where you have deterioration of other 
buildings to contrast that rehab. These buildings build 
confidence in a neighborhood's future. They give banks, 
individual investors, adjacent property owners the confidence 
that they too can take that leap and invest.
    We recently took a look at the economic spinoff impact of a 
project we participated in, in the Midwest, and it was one 
building sort of in the middle of a group of historic 
properties. We noticed after we had made the investment that a 
number of other properties were being rehabbed.
    So we walked around the neighborhood and spoke to each of 
the owners of the 10 buildings--10 additional buildings were 
being renovated--and we said: Why are you doing this?
    They said: Well, this building in the middle was so 
critical. I couldn't have hoped to lease my building if I had 
to walk my perspective tenants by that eyesore, but now that it 
is gone, I feel like I can take the risk.
    The building, the subject building, was 200,000 square 
feet. When we tallied up the spinoff impact, we were seeing the 
additional historic renovation of 2 million square feet. So 
it's a matter of neighborhood pride, but it is also confidence 
that further investment can occur and it is a safe thing to do.
    Ms. Matthews. I guess I would add to that the shift of 
pride is also the shift of discovery, and therefore, the shift 
of ownership because the reconstructors, hands-on, of that 
bridge took ownership of it. It became theirs. It became the 
citizens' of both counties absolute pride in something they had 
done. Therefore, the vandalism stopped. There is this thrill of 
discovery.
    Who would have ever known until we did research that the 
Wright Brothers published Dunbar's first poems; that they went 
to high school together; that before they did bicycles, before 
they did an airplane, they had a printing shop; and that they 
were best friends with Dunbar who ended up running an elevator 
here in the Capital because he couldn't sell his poetry? These 
stories reach out to people.
    The most powerful thing about the National Historic 
Preservation Act and the National Historic Sites Act, the 70 
years of one, the 40-year anniversary of the other, is that it 
reaches clear down to the grassroots of those reconstructors of 
that bridge that bridges the gap on the line across the river 
that is the dividing line of two counties. That is the power 
between what Congress enacted in the Preservation Act and 
Historic Sites Act, that it reaches down to the grassroots in a 
very powerful explosion, shift of pride, shift of ownership 
through shifting discovery that we require through 
documentation for eligibility of significance.
    Mr. Turner. Thank you.
    Mr. Bilbray.
    Mr. Bilbray. Thank you.
    First of all, Doctor, I want to clarify and make sure there 
is no undue pressure on you coming from my camp, but the 
Liberty Station project is not in my district.
    Ms. Matthews. Oh, sorry.
    Mr. Bilbray. It was in my district for 16 years, but if 
anybody who tried to sell that is putting undue pressure on 
you, I want to clarify, though.
    Ms. Matthews. No; actually, that was my own mistake in 
looking up your district.
    Mr. Bilbray. No problem; I do want to let you know that the 
chapel at that project is the site of the marriage of 
Congresswoman McMorris just recently, and it was the site of my 
baptism. So I don't want undue pressure put on you on that 
level.
    Ms. Matthews. Baptism? No pressure?
    Mr. Bilbray. I know a lot of my colleagues will be shocked 
to find out I am not a heathen, but we will talk about that 
later.
    Let me just say, I guess, after almost 20 years of being in 
the government management side and the executive branch in 
local government for a long time, I am very interested in not 
just the correction that H.R. 3159 does in the statute, but 
really--it would probably be in a doctor's court--the essential 
gap between the theory of legislation and the reality of 
practical application by the people on the front line.
    Let me first preface this, Mr. Chairman, by saying I have 
always found it very disconcerting how much our society focus 
puts so much value on natural history and really relegates to a 
back corner, man-made history in a lot of ways. Culturally, we 
do not, no matter how much we talk about it. In the last 30 
years since 1970, 40 years, we have almost made natural 
history, raised it up to a deity and forgotten that manmade 
history is essential to us too of who we are as a people and as 
individuals.
    That aside, Doctor, if we passed the best law in the world 
and we do not have the people on the ground with the right 
attitude and the right approach, we are going to be back here, 
saying again how can we do it legislatively. I will give you an 
example. I have seen the difference between a planning 
department and a building department and the total different 
attitude and relationship between the client and a Government 
Agency. I have seen bureaucrats who will help people get to go, 
get to success, and those who basically feel their goal is to 
stop mistakes but not to help to move the ball along or get 
into it.
    How do you see that we can, as a Federal Government and 
specifically in your Department, be more of the building 
inspector mentality of actually being part of the team to be 
successful into it, rather than what we traditionally see so 
much, especially in the Federal Government, of the gatekeeper 
but not necessarily the perpetrator or participant in the 
process of preservation?
    Ms. Matthews. Well, I can't comment on H.R. 3159 because 
the Department and the Park Service have no position on that 
currently.
    But I can say that this subcommittee's hearing of last 
November that lasted 2\1/2\ hours, actually the language 
throughout this subcommittee's hearing was apparent in the 
disaster relief of $43 million, and I can say that in the Park 
Service, in Interior, we have taken very seriously every 
suggestion we have had to improve programs, both NAGPRA and 
this investment tax credit program. We have taken very 
seriously and actively a role to see that we deliver what you 
all intend through your legislative authorizations and your 
appropriations. There is probably no greater responsibility in 
Government at every level than the people who deliver the 
services because they are very hard won at your level.
    Mr. Bilbray. Don't get me wrong. The reason why I bring it 
up is I have been where you are and trying to get the people 
working for me to get in the right mind set to move that way. I 
mean I literally had an environmental health department working 
one side with the business community and I had an air pollution 
district working with the other side, and the difference in 
attitudes was just extraordinary to where finally to get the 
ball rolling, I told the air district if they couldn't figure 
out how to work with the community in 6 months, they were going 
to be put under the environmental health department. It was 
astonishing how quickly they transformed their attitudes. 
[Laughter.]
    So this is all just the challenge that we have in 
Government. I think that I really want to focus on your 
Department because all the theory in the world and all the 
great legislation in the world really relies on your executing 
the intention and getting to go. That is, by itself, tougher 
than all the challenges the rest of us have, and I want to hope 
and pray that you are successful in your efforts.
    Ms. Matthews. Well, I read your district wrong, but I read 
your bio right, and I can tell you that as an Ohio farm girl 
who ended up a Florida SHPO, that I don't think there is any 
higher honor than serving the public to administer the programs 
that you all authorize and appropriate, and we are doing our 
very, very best.
    Mr. Bilbray. Thank you. Believe me, I know how tough it is 
to try to remind everybody in the government structure, no 
matter what level that after all, we are all on the same team 
and hopefully working toward the same goals.
    Thank you very much.
    Ms. Matthews. We really appreciate your time and effort to 
express that, and we are.
    Mr. Bilbray. I appreciate it.
    Mr. Chairman, I yield back.
    Mr. Turner. Dick, I want to go next to the topic that you 
raised of an historic Homeowner Tax Credit and the importance 
that it might have, and you gave us some great statistics here 
that I would like to have you embellish some more of the issues 
and what the impact would be.
    You said that 32 percent of households below the poverty 
line and 34 percent of renters whose household income is less 
than $20,000 per year live in older and historic homes. Of the 
Nation's over 12,000 historic districts, comprising over a 
million contributing structures, 60 percent overlap census 
tracts in which the poverty rate is 20 percent or greater.
    There are some compelling statistics there of not just that 
these areas have been declared historic meaning that both the 
community and on the National level, there is a recognition of 
the value of their preservation but of the second aspect being 
one of a need for capital and investment. Many times when 
people talk about an Historic Homeowner Tax Credit, people are 
worried of wealthy neighborhoods or wealthy areas where the 
property values and the individuals living in them both justify 
the reinvestment and the availability of the capital to make 
that reinvestment. The statistics that you are providing us 
show a significant area in which the capital is not there, but 
the need for preservation is there. Also, if they have such an 
expression of poverty, you tend to have an expectation that 
there is also symbols of blight that occur there that perhaps 
could be eradicated, using historic preservation as a tool.
    If you could speak a little bit more about the impact that 
you would see of having a Homeowner Tax Credit and what we may 
need to overcome both in policy and in impact to do that.
    Mr. Moe. Thank you, Mr. Chairman.
    I welcome the chance to talk about this because it is a 
concept that the National Trust has long championed. We drafted 
a bill some years ago that Congressman Clay Shaw introduced 
with broad bipartisan co-sponsorship, a similar bill in the 
Senate, and it would have provided a significant tax credit for 
homeowners. We think the need is clearly there for the reason 
that you mentioned because the overlap between poverty census 
tracts and historic districts is obvious and is clear, and 
there is a tremendous need in these historic districts for the 
kind of incentive that a tax credit would offer.
    We think that it probably needs to be carefully targeted to 
assure everyone that the resources made available through the 
credit are only going to those people who otherwise wouldn't 
make this kind of investment, in other words, based on some 
kind of need. I think that can be done by defining the kinds of 
census tracts where it could apply, or by putting a cap on the 
investment or some combination of both, but there are means to 
do this so it would be carefully targeted.
    We did not get traction on this bill, frankly, when it was 
first introduced largely because of the cost and some of the 
issues you mentioned. I don't mean to tell either of you how 
serious the fiscal climate is up here. So we basically didn't 
put that on the back burner, but we decided to pursue 
Congressman English's bill instead because it is much lower 
cost, it is much more carefully targeted. But we are eager to 
revisit the question of an historic Homeowner Tax Credit.
    Many of the States that have tax credits cover homes, 
historic homes, as well as commercial buildings, and the 
lessons there have been instructive. For example, in Maryland, 
it has been quite extensively used and in other places.
    We estimate that having an historic Homeowner Tax Credit 
could draw at least as much investment per year as does the 
existing commercial credit which now draws $3 billion in 
private investment. We think that it could be up to double that 
amount if homes were included, depending upon how you 
structured the bill. So this is a very important issue for us, 
and we hope that we can get back to it in a serious way before 
too long.
    Mr. Turner. Who else wants to comment on the issue of 
homeowners tax credit?
    Let me just provide my little commercial for it. Having 
lived in an 1885 Victorian for 11 years, I can tell you that 
100-year-old things continue to fall of them, and that the 
project of restoration and maintenance is never done in homes 
and in communities like that. That assistance certainly, I 
think, can be very helpful to individuals who are wishing to 
maintain a property that has been reclaimed or restored. The 
home that I lived in had been abandoned for over a decade 
before an individual had acquired it and had significantly 
restored it, and my wife and I finished the restoration but 
still found over the next 11 years that it is quite a caretaker 
job having an over 100-year-old property.
    I want to recognize that we have Ms. Foxx from North 
Carolina with us, and then I will turn to Mr. Bilbray for 
additional questions.
    If you will excuse me for a moment, I will be returning to 
the Chair in a few minutes.
    Mr. Bilbray. Mr. Chairman, let me just echo to you the fact 
that my home was an adobe. My wife said she moved 2,000 miles 
from New Orleans to live in a mud house which is kind of unique 
in some certain ways. Thank God, the kids weren't able to burn 
it down when they were little. The trouble is if one of the 
teenagers leave a sprinkler on, you may lose a living room 
wall. But there are different challenges on that, and I sure 
hope that some of you can come over and persuade my wife that 
the Victorian she left New Orleans obviously did not have the 
historical significance as an adobe in San Diego County.
    I would like to get back into the issue of these historical 
uses and the flexibility we can try to find here. It is much 
like what we are working with in San Diego where you have 
conflicting preservation and government regulations. We are 
running into situations in which buildings that historically 
were basically office or barracks but are in a coastal zone, in 
which now you have a California Constitution that says that 
visit-receiving and commercial must take precedence over 
residential or office, and basically it is called coastal-
dependent industries. The question there is how much 
flexibility can we give within our statutory guidelines to be 
able to reflect these different conflicting priorities when 
they come down. Let us face it; the California Coastal Act is a 
pretty big deal. That is a law that was passed in 1976 or 
actually 1970 and has stood pretty strong in a small, little, 
intimate group of 32 million people called the State of 
California, and it is something we need to consider when we are 
going into it.
    Does anybody have any discussion about how we work our 
guidelines and how we coordinate those or remain flexible so 
that they mesh with other guidelines and mandates that our 
government agencies or some other government agency may be 
placing a priority on?
    Mr. Moe. Well, Congressman, I will jump in if I may.
    I am in favor of as much flexibility as possible here 
because it has been our experience that the most successful 
revitalization projects in the country have been those that 
sought and employed multiple uses, and that involved integrated 
residential with commercial, with retail, and with light 
industrial. For example, places like lower downtown in Denver 
and almost every community has experienced this to one degree 
or another.
    There is no silver bullet to revitalizing a downtown or a 
community or a waterfront area, but in my view, the single most 
important thing you can do is to encourage people to live there 
because if you encourage people to live there, first of all, 
you are fighting sprawl, you are not eating up more 
countryside, you are using existing structures and existing 
infrastructure, and you are revitalizing existing communities 
to realize their potential. So, if this is on point to your 
question, I would favor as much flexibility as possible to 
encourage multiple uses.
    Mr. Bilbray. Preserving greenfields is the term we use in 
environmental community.
    Mr. Moe. Yes, right.
    Mr. Bilbray. Any other comments?
    Mr. Fowler. I can't speak to your situation with the 
California Constitution, but I would draw your attention to Mr. 
Nau's statement for the record on page four, the paragraph 
about community development block grants and affordable 
housing. The ACHP administers the Federal Section 106 process 
which requires that CDBG funds be reviewed for their impact on 
historic properties, and this involves a consultation process 
with the State Historic Preservation Officer and the city, 
using the CDBG funds.
    Over the years, we noticed that there were difficulties 
that often arose because of the application of the Secretary's 
standards and the need to meet HUD standards for housing 
quality and features and so on. So what we have done is worked 
with both the Department of the Interior who administers the 
Secretary's Standards and the State Historic Preservation 
Officers who administer them on the ground and the Department 
of Housing and Urban Development and housing providers and so 
on to come up with a policy that clarifies what the 
expectations are and introduces some flexibility in the 
application of standards so that you can come up with 
successful affordable housing projects using historic 
properties. So I point that out because it is an example of 
where government agencies that both have preservation 
responsibilities and the administrative responsibility for 
providing housing came together with the users on the ground 
and said how can we make this system work better.
    Now all of that had to be done within the context of what 
statutory constraints there were, and frankly, with the 
preservation system, the statute is very flexible, but it is an 
example of how agencies and users working together can solve 
the problem.
    Mr. Leith-Tetrault. From the vantage point of investors and 
developers, I think you put your finger on an issue that gets 
to the question of how do we encourage greater utilization of 
these credits. Not being from a government agency, I don't have 
the answer, but I just want to echo your concern. A developer 
that has to meet ADA requirements on an historic property, meet 
community health requirements such as abating lead paint, 
achieve energy conservation to lower the operating costs or to 
lower the costs of individuals renting those spaces, 
environmental remediation and then trying to meet some of the 
incentives that are out there for green building approaches, 
balancing all that with historic preservation is very 
difficult. Your remarks earlier about one agency versus another 
and one being proactive and one not, somehow or another, from 
the investor vantage point and from the developer vantage 
point, we hope there could be better coordination at the 
government level so that all these folks who are looking out 
for these issues are talking to each other and making some 
reasonable compromises.
    Mr. Bilbray. John, I am glad you said that because when I 
got here in 1995, I looked around just our complex here and 
said, my God, if we were operating under a private sector or a 
local government was operating the way the Federal Government 
operates here, we would all be in prison. I mean it really was. 
It was such a culture shock.
    But I think the flip side is the fact that it shows to 
really try to preserve those critical things from a heritage 
point of view, they did overlook a lot of these things that 
other people aren't allowed to overlook. Maybe that should be 
just a sensitivity lesson for those of us in the Federal 
Government of saying that maybe we need to tighten it up a 
little bit but also maybe we need to be more flexible in our 
standards that we are sending around for everybody else because 
we have a dose of reality, let us just say, on this Hill. You 
can imagine if we could just get that dose of reality out to 
the rest of the Nation.
    Thank you very much. I yield to the chairman.
    Mr. Turner. As you are all aware, the buzzer has rung 
indicating that we have a vote that is going to occur. We 
luckily only have one.
    There is about 11 minutes on the clock. So what I would 
like to accomplish before we take a short recess for me to run 
to the Capitol and vote, is to one, give each of you on this 
first panel an opportunity for any closing remarks that you 
might or a question that we didn't ask that you wanted to make 
certain that you got onto the record or anything that has 
caused you to want to respond to another question that has been 
asked. Second, then we will swear in the second panel, and then 
we will take a recess and I will return after the vote.
    With that, I will open it to see if there is anyone who is 
on the first panel, who has any comment that they wish to make 
that they have not had the opportunity for this testimony.
    Mr. Moe. I would just like to repeat something I said, Mr. 
Chairman, and that is we very much appreciate your leadership 
and your focus on these issues which has been enormously 
importantly to give visibility and understanding to some 
complex issues, but this had not existed before you took this 
interest. So, thank you, on behalf of all of us.
    Mr. Turner. Thank you very much.
    Ms. Matthews. I would just like to add that the Historic 
Preservation Act of 1966 which you all passed has changed in 
this country and this country alone what is significant 
historically. We value neighborhoods, we value your 1885 house 
that you lived in for 10 years, and we value the adobe house. 
We look at our neighborhoods and our places and your reference 
to the pride, the ownership, the grassroots empowerment is 
exactly what was designed by Congress in the 1966 act.
    Thank you for holding this hearing.
    Mr. Turner. Thank you.
    Dr. Matthews, I do want to ask you one other thing that was 
not. We did quickly skim your bio again, and we did not note 
the reference to Ohio.
    Ms. Matthews. I don't think it is there.
    Mr. Turner. You did mention in your testimony, so I have to 
ask. Where might you be from in Ohio?
    Ms. Matthews. A 27-acre trout farm between Akron and 
Canton.
    Mr. Turner. Great, wonderful.
    Ms. Matthews. I have cousins in Dayton.
    Mr. Turner. I had to ask this. In every hearing, there is 
some connection to Dayton, OH, that is beyond just the ones we 
have invited. So I am glad to see that you did have some 
connections to Ohio.
    Ms. Matthews. And Dunbar was part of my dissertation.
    Mr. Turner. Oh, wonderful, excellent.
    We just recently had the First Lady into the Wright-Dunbar 
National Park area, and it was interesting in talking to her 
and in inviting her with John Nau's help. When I was speaking 
to her about the Wright Brothers and Paul Laurence Dunbar. I 
first went in to explain to her who Paul Laurence Dunbar was, 
and she said, I know who Paul Laurence Dunbar was from my 
educational background.
    So it was good to know. She was very interested during the 
entire tour. You have in the First Lady someone who is also 
interested in Paul Laurence Dunbar's work.
    Ms. Matthews. Great.
    Mr. Turner. I want to thank this panel, and we will turn to 
the second panel for their being sworn in.
    Mr. Turner. On our second panel, we have Ms. Idotha Bootsie 
Neal who is President of Wright Dunbar, Inc.; Ms. Kathleen 
Crowther, executive director, Cleveland Restoration Society, 
chairman of the Statewide and Local Partner Program of the 
National Trust for Historic Preservation; Mr. J. Myrick Howard, 
president, Preservation North Carolina; Mr. Edward Sanderson, 
executive director, Rhode Island Historical Preservation and 
Heritage Commission; Mr. Ken Baumgartner, president, the Corky 
McMillin Companies.
    [Witnesses sworn.]
    Mr. Turner. Please let the record show that the witnesses 
have responded in the affirmative.
    With that, I will then be taking a short recess after which 
I will return then for your testimony. Thank you.
    [Recess.]
    Mr. Turner. The subcommittee will reconvene.
    We will begin with Ms. Idotha Bootsie Neal.

 STATEMENTS OF IDOTHA BOOTSIE NEAL, EXECUTIVE DIRECTOR, WRIGHT 
DUNBAR, INC.; KATHLEEN CROWTHER, EXECUTIVE DIRECTOR, CLEVELAND 
 RESTORATION SOCIETY AND CHAIRMAN, STATEWIDE AND LOCAL PARTNER 
     PROGRAM, NATIONAL TRUST; J. MYRICK HOWARD, PRESIDENT, 
PRESERVATION NORTH CAROLINA; EDWARD SANDERSON, DIRECTOR, RHODE 
ISLAND HISTORICAL PRESERVATION AND HERITAGE COMMISSION; AND KEN 
      BAUMGARTNER, PRESIDENT, THE CORKY MCMILLIN COMPANIES

                STATEMENT OF IDOTHA BOOTSIE NEAL

    Ms. Neal. Good morning, Mr. Chairman. It is indeed an honor 
and a privilege to testify before the subcommittee today. As 
you know, I have prepared my testimony, but I want to deviate 
just a little bit.
    As I flew in this morning to Reagan Airport and I looked 
and I saw all the historical structures from the window, I 
thought, how sad if these buildings have not been preserved. I 
also had a sense of pride because as the plane was descending, 
I realized that right within my neighborhood, my community, the 
Wright Brothers taught the world how to fly.
    Then I also had another thought. I had an opportunity to 
serve with you on the Dayton City Commission, the 8 years that 
you served as Mayor, and I realized that these issues of 
historic preservation were important to you then, and it really 
gives me great honor to know that as our Congressman from the 
Third Congressional District, that these issues are still 
important. I understand and recognize that these issues are 
important to you not because it is a political platform, but it 
is a strategy and a tool to really rebuild communities where 
people live. And so, for that, I want to say on behalf of my 
colleagues, on behalf of the citizens of Dayton, we really do 
value and appreciate your leadership and all that you do, and 
that I am really proud that you are my Congressman.
    It is important as we talk about historic preservation, 
there is a neighborhood in Dayton, OH, a Midwestern city, and 
there were three geniuses who, in fact, helped to change the 
world, Orville and Wilbur Wright and Paul Laurence Dunbar. 
Those three individuals, even though they are no longer here, 
they are continuing to impact the kind of world that we live in 
today.
    Just imagine, a few short years ago, where a lot of the 
work that took place was threatened, threatened to evaporate 
forever. Why? Because where they, in fact, did their work was 
the site of the riots of the sixties. For these past 40 years, 
we have seen nothing but disinvestment, abandoned and vacant 
structures.
    But because of your leadership and many others, and I 
started making a list while we were on break. We certainly need 
to say thank you to the National Park Service. We need to say 
thank you to the Dayton Aviation Heritage National Park. We 
need to say thank you to the National Trust for Historic 
Preservation. We need to say thank you to Heritage Ohio. We 
need to say thank you to the city of Dayton, and the list goes 
on. That is another important benefit to historic preservation. 
It brings together a number of individuals collectively, 
working on an important initiative in a collaborative way that 
brings pride back to our community.
    So with that, Mr. Chairman, I would like to now go to my 
written testimony.
    The neighborhood where the Wright Brothers invented the 
airplane and African-American poet Paul Laurence Dunbar began 
his career. This significant historic legacy is helping to 
transform, a formerly vacant and blighted urban neighborhood 
into one that supports families and businesses. Wright Dunbar, 
Inc. is a community partner with the Dayton Aviation Heritage 
National Historical Park and the National Aviation Heritage 
Area.
    The National Park is located in the heart of our 
neighborhood, in the heart of Wright-Dunbar Business Village, 
and it has become an important catalyst for the redevelopment 
of the area and positioning this area as a heritage tourism 
destination. Just 10 years ago, nobody would have considered 
visiting the Wright-Dunbar area, much less locating their 
business or their residence there. As the site of the 
devastating race riots in the mid-1960's, the Wright-Dunbar 
community suffered significant disinvestment until the 1990's. 
Vacant buildings and homes and high crime made it difficult for 
some people to see the vision of a walkable vibrant urban 
community. However, today, we have experienced a 
transformation. Those old homes and the perception of high 
crime have begun to give way to rehabilitative historic 
buildings, homes, new construction, and the return of 
businesses and residents.
    Wright Dunbar, Inc. and the city of Dayton realized early 
that the private sector was not going to immediately invest in 
the redevelopment of this area. This is not unique just to 
Dayton, OH, but urban cities across the city are faced with the 
same challenges. However, with the support of many of the 
historic strategies and tools, we now have a vibrant community. 
The abatements and incentives to encourage builders to renovate 
and to rebuild homes that fit within the historic district is a 
real plus for us. The surrounding neighborhood is doing 
something that we think is unique as well. It is attracting a 
diverse mix of families, young professionals, and retirees.
    On the commercial side, it is important as well, not just 
rebuilding the neighborhood and creating a place where people 
live, work, and play but there is an economic benefit to the 
investment in a historic district as well. We received $2.9 
million of Federal funding for the acquisition and 
stabilization of non-historic properties. Community development 
block grant funding and Federal appropriations have been funds 
that have helped to stabilize, secure, and make sure that these 
buildings are dry.
    However, due to the extreme deterioration of the buildings, 
a financial gap still exists before the buildings can be ready 
for tenant occupancy. Wright Dunbar is laying the foundation 
for a capital campaign that will provide the gap financing 
needed to build out the properties, and these are all on the 
National Historic Register.
    We have some very important tools that the Federal 
Government has put in place, and we want to encourage that 
those tools continue. The use of Historic and New Market Tax 
Credits will be critical in the next phase of the redevelopment 
of Wright-Dunbar as we bring together a variety of funding 
tools and programs to complete each project. Already, CDBG has 
made a big difference in the work that we are doing in Wright-
Dunbar.
    Though, urban revitalization does not happen overnight, 
Wright Dunbar and our partners have already begun to see some 
positive results. Since our funding in 2002, $3.3 million of 
private investment in Wright-Dunbar has leveraged over $12.2 
million in an area that people would have given you property 
just to get it off of their tax rolls 5 years ago. Not only has 
Wright-Dunbar seen an investment but the area, over $76 
million, helping to bring back the needed services for the 
residents that live there, also helping us to attract 
businesses back to the commercial quarter.
    The transportation funding that we received through our 
Miami Valley Regional Planning Commercial is going to slow down 
the traffic in our community. People used to drive fast through 
Wright-Dunbar just to get out of the area because of fear, 
because of the perception of it being a place that wasn't safe. 
Now, just this past Friday, we had a special event. When we 
first held that event 2 years ago, 24 people attended. I am 
happy to say, Mr. Congressman, on Friday night, we had over 
3,000 people to come to an area and have fellowship, fun, and 
celebrate our legacy and history in Dayton, OH.
    We recently received a Preserve America Grant, and we are 
excited about that strategy, that tool, as well because it is 
going to help us to be able to collect data and information 
that we will be able to share the economic benefit of what 
historic preservation and heritage tourism can mean for the 
Wright-Dunbar community, for the city of Dayton, and for the 
State of Ohio.
    We are a certified Main Street Project, and we are very 
proud of that and the technical assistance that we receive from 
the National Historic Preservation and also Heritage Ohio.
    Historic preservation truly is a tool. It is a tool that 
can be used against blight and vacant buildings in cities 
across America. Main Street Communities and urban cities 
contain many of the stories that make America the unique and 
creative country that it is today. These stories are best told 
by maintaining and celebrating our built environment. To do 
this effectively, Congressman Turner, we need to continue to 
have the strategies like New Market and Historic Tax Credits, 
Community Development Block Grants, Federal appropriations, 
Preserve America, and with your creativity, whatever else you 
come up with, as we protect and preserve historic preservation.
    We really appreciate your leadership. Thank you personally 
for the opportunity to be here. Thank you for championing the 
cause that we know will save America's cities and make a 
difference. Under your leadership, we know that the best is yet 
to come.
    [The prepared statement of Ms. Neal follows:]

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    Mr. Turner. Thank you, Bootsie.
    What everyone should know here is I served as Mayor with 
Bootsie. She served as City Commissioner and now as the 
Director for Wright Dunbar, Inc. She is being incredibly 
gracious with her compliments but without her dedication, 
expertise, and enthusiasm, the community that she now serves as 
Director wouldn't be there to serve with the great 
accomplishments that are there. It is just wonderful to see 
what has happened.
    It was great to take the First Lady there and see what you 
have done and accomplished. You really are a great national 
example for what historic preservation is all about and how 
community transformation can occur. So I greatly appreciate 
your being here and what you are doing for our community.
    Ms. Kathleen Crowther.

                 STATEMENT OF KATHLEEN CROWTHER

    Ms. Crowther. Thank you, Mr. Chairman. Ms. Bootsie Neal, 
you are a hard act to follow. Thank you so much for your 
leadership in historic preservation. I simply echo the many 
compliments you have received today.
    In Cleveland, Historic Tax Credits and CDBG funding have 
been critical tools to revitalize our struggling neighborhoods 
and downtown. Preservation has a catalytic effect resulting in 
increased property values, and preservation is the wise use of 
our built environment, also sparing those natural resources 
that are being gobbled on the urban fringe.
    My organization, the Cleveland Restoration Society, 
provides a wide range of services in Northeastern Ohio from 
traditional preservation advocacy to technical and financial 
assistance through our low interest loan program. We are really 
a hybrid between historic preservation and community 
development.
    Across this country, there are literally thousands of 
preservation organizations, those that have professional staff 
are typically members of the Statewide and Local Partners 
Program of the National Trust. These organizations are your 
smaller national trusts on the ground, fighting the battle to 
preserve landmarks and participating in the real estate market 
by purchasing, loaning funds, restoring and selling historic 
properties.
    In Northeast Ohio, throughout Ohio, and I dare say 
throughout the United States of America, many areas, in 
Northeast Ohio in particular, we are grappling with the ill 
effects of uncontrolled urban sprawl. Developers are building 
further and further afield. Buildings and housing units with 
many more years of life are being abandoned in this expensive 
out migration cycle.
    Given this reality, this wasteful reality, we are working 
in partnership as best we can with local governments committed 
to maintaining aging but still viable and attractive housing 
stock. We partner with school districts and religious 
institutions struggling with monumental school buildings and 
sacred landmarks. We provide low interest loans to individuals 
such as Professor Harvey here, who is restoring this Tudor 
house in Cleveland's tough Hough Neighborhood; and Scott Plate 
who is an actor, who lives in this double house and rents the 
other half; and elderly Mrs. Shotwell who, with her sons, spent 
$40,000 to polish up their long-time family home.
    Often we transform the worst house in the neighborhood into 
the best house, sending an important signal that this 
neighborhood is on the rebound. None of these projects would 
have benefited from the investment tax credits for historical 
rehabilitation because they are not commercial properties. The 
source of funds that allow us to make low interest loans and to 
operate this program is the Community Development Block Grant 
Program.
    The problems of the City have now reached inner ring 
suburban communities such as Shaker Heights. Even with a 
nationally recognized school district, Shaker Heights is in a 
heated competition with newer communities built further out. So 
we assist them as best we can with loans and technical 
assistance.
    This family worked with us to transform this house in the 
streetcar suburb of Lakewood.
    Our projects have significant impact on property values in 
the neighborhoods in which they are located. They spur others 
around them to follow suit, giving tangible evidence of the 
confidence in the neighborhood, but the out migration cycle is 
against us. Without a Federal incentive for individual 
homeowners like these, we are fighting an up-hill battle and we 
are wasting valuable economic resources by not deploying the 
full utility of our built environment. The houses constructed 
by past generations have been built with materials often simply 
unaffordable in today's construction budgets, and we are 
wasting a valuable opportunity to better align Federal policies 
aimed at providing affordable housing.
    Another significant concern we have is for the continued 
use of older neighborhood schools. These monuments are being 
deaccessioned and demolished in Cleveland and across the County 
at an alarming rate. This is the result of reduced populations 
and, in some instances, State policies which favor new 
construction even if it is more costly. In Cleveland, we have 
managed to restore one magnificent school, John Hay High 
School, for about the same cost as new construction. So we have 
saved the cost of demolition and, thank goodness, the rich 
materials of this landmark building are not filling up yet 
another landfill.
    Sacred landmarks are also being lost at an alarming rate. 
With population moving out of central cities, these magnificent 
cathedrals of America are deteriorating, being closed, sold to 
the highest bidder, or demolished. We work in cooperation with 
denominations to get them on the road to good property 
stewardship.
    Preservation and community development needs to be better 
supported by the Federal Government to unleash its full 
potential. Passing the English bill will help communities 
reclaim more buildings that still have economic utility. By 
developing an incentive that supports the individual homeowner, 
we would have the potential to turn the cycle of out migration.
    I ask our elected leaders to recognize that we are wasting 
valuable resources by not addressing urban sprawl from the 
Federal level. This wastefulness is creating untold costs in 
countless social and economic ways. Congress should create a 
high National standard of wise and sustainable use of our 
resources by which all Federal investments, in particular, 
roads and housing, would be tested. This single action would 
address a range of problems as it would reduce State and 
Federal dollar outlays through the wise use of the investment 
of previous generations.
    Thank you.
    [The prepared statement of Ms. Crowther follows:]

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    Mr. Turner. Mr. Myrick Howard.

                 STATEMENT OF J. MYRICK HOWARD

    Mr. Howard. Thank you, Mr. Chairman. I am Myrick Howard 
from Raleigh, North Carolina, and I live in Representative Brad 
Miller's District. We appreciate your work with Brad on the 
caucus.
    I am the President of Preservation North Carolina, a non-
profit statewide organization that has been actively involved 
with real estate. We operate a revolving fund and have done so 
for the last 30 years, trying to find buyers for endangered 
historic properties, finding folks who will rehab these 
troubled properties, and we have done this with more than 575 
properties around the State. We are a privately funded 
organization and don't receive State or Federal funds.
    What I would like to focus on primarily today is that in 
North Carolina, we have used a combination of Federal and State 
tax credits to be an invaluable tool for the revitalization of 
neighborhoods, downtowns, and rural properties. We built a tax 
credit program in North Carolina around the Federal tax credit. 
In 1998, January 1, a new tax credit went into place in North 
Carolina, a 20 percent income-producing piggyback tax credit, 
and you see what has happened. The year 1997 was fairly typical 
coming up to that point, and you see the growth that we have 
seen in the number of projects in North Carolina. An important 
part of this is that we have added a tax credit for homeowners 
as well so that homeowners can renovate their own homes for 
their own use. The impact has been really powerful. We have 
seen more than $1.3 billion in rehab since 1998.
    In this last session of the North Carolina General 
Assembly, we were able to add an additional incentive for the 
renovation of vacant historic industrial and utility buildings. 
That incentive is projected to add $270 million of additional 
rehabilitation over the next 5 years. So the chart will go even 
higher over the next 5 years.
    We do have several specific recommendations as outlined in 
the written testimony. We do support the work that is needed on 
the existing tax credits through the English bill, H.R. 3159, 
to do some refinement and repair of the tax credits.
    We do need to have additional support for the 
administration of this program. When we are finding long delays 
at either the State Historic Preservation Officer or the 
National Park Service in their review of tax credit projects, 
that really impedes the effectiveness of the program. The 
Federal regulations call for a review taking approximately 60 
days, but the reality is it is more like 6 months or longer in 
some cases.
    The third I want to mention is we very strongly feel--and 
we have a North Carolina State incentive for homeowners--that 
some form of Federal incentive for homeowners to renovate 
historic houses could be powerful across this country, bringing 
vast savings and infrastructure, bringing jobs, and making our 
cities and towns healthier places to live from a tax base 
standpoint, school standpoint, crime standpoint, and many other 
ways.
    What I would like to conclude with is some photographs 
because photographs really do tell a lot of the story. Those 
are photographs from some work that Preservation North Carolina 
has done in two locations, two mills and mill villages that we 
have been involved in where we have acquired the property and 
resold it with deed restrictions to buyers for renovation.
    We have acquired two mill villages that we have resold. As 
a Southerner, I enjoyed the Southern Living article about a 
mill village being a wonderful place to live. Mill villages 
were pretty much the places you didn't want to live when we 
started this project, and it has been very exciting to see the 
kind of response that we have had. We were given a mill village 
that had over 40 vacant and boarded-up structures.
    They are now all renovated from little bitty buildings on 
to the larger houses that the superintendents lived in. The 
streetscapes are now quite extraordinary for a place that was 
basically abandoned. We have also had new houses built there 
under designs that we came up with, and the mill itself is 
still under renovation, but the first two phases are occupied 
and exceptional. The peanut mill on the back side of the mill 
village has also been renovated.
    I think the numbers tell the story. The tax value in this 
neighborhood was $863,000 in 1998. The tax value now is $14.6 
million, and that number will probably exceed $20 million by 
the time the full renovation is complete. Homes have gone from 
$37,000, basically abandoned, to $224,000 on average.
    We have also done this on another mill village near 
Burlington in the central part of the State, a mill that closed 
in 1954. You get the sense of the housing that was in that mill 
village, abandoned for years and years. Now almost all of the 
houses are sold and renovated now. This was one of my 
favorites; it fell off the foundation. But a new house wouldn't 
fall off its foundation, and you couldn't expect to renovate 
it, but these old houses are built well, just amazing. It sat 
off that foundation for almost 15 years before we picked it 
back up.
    The renovation has been just wonderful to see, and so many 
small communities and small mill villages are looking at these 
projects.
    This is a new house that we built, and now we are seeing 
the new houses being built in the mill village. It has been an 
extraordinary transformation over the last 8 years. The mill 
renovation is expected to begin as soon as the brownfields 
agreement is completed on the mill.
    Here are the numbers as they currently stand. It went from 
$244,000 to $8.7 million. The estimated value of the project 
completion will be $18 million. These would not have been 
possible without the tax credits, Federal and State combined, 
and I want to especially mention the homeowner credit because 
most of this renovation was done by homeowners for their own 
homes.
    Thank you very much.
    [The prepared statement of Mr. Howard follows:]

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                 STATEMENT OF EDWARD SANDERSON

    Mr. Sanderson. Mr. Chairman, Rhode Island has used the 
Federal Historic Preservation Tax Credits for a number of 
decades, but in 2001, we found that the Federal tax credits 
simply did not offer enough incentive for developers to take on 
deteriorated old buildings in inner city neighborhoods. And so, 
we passed our own State tax credit at 30 percent that can be 
combined with the Federal tax credit.
    Since the creation of our tax credit, the number of 
historic rehabilitation projects has increased 800 percent, and 
the amount of private investment has increased more than ten-
fold. In just 4 years, 235 projects representing private 
investment of one and a third billion dollars--that is 4 years, 
one and a third billion dollars in little Rhode Island--have 
applied and participated in the program. These projects are 
creating over $7 billion in economic activity in our State and 
almost $700 million in new tax revenue. Property tax revenue, 
sales tax revenue, and income tax revenue are being generated 
through this program.
    All this construction creates new jobs. We estimate 24,000 
construction period jobs and 8,000 permanent jobs in new 
businesses.
    The tax credit also adds to the supply of housing including 
more than 600 apartments that are guaranteed for low and 
moderate income residents. In fact, we have looked at census 
tracts and found that three-quarters of all the historic 
preservation projects that our program is generating occur in 
census tracts where family income is below the statewide 
median.
    I brought three examples of projects to show you. If we 
could get the first picture up on the screen, it is this 
rundown building in downtown Providence. In downtown 
Providence, owners have invested $54 million in 5 buildings in 
a 3-block area, creating 200 new apartments and bringing new 
businesses into street level stores.
    We will look at the after; this is the 1873 Peerless 
Building, one of the five. It has been rehabbed into 97 new 
apartments and 22,000 square feet of new retail space.
    We have a Victorian neighborhood on the west side of 
Providence known as Elmwood. It contains a wealth of Victorian 
architecture like this before and after picture of a house from 
the 1890's, but the neighborhood declined and the houses 
deteriorated.
    The next picture shows that recently 15 houses--15 houses--
near the intersection of Melrose Street and Adelaide Avenue 
have been rehabilitated for low and moderate income residents. 
The project created 42 rental apartments and five houses as 
home ownership starter homes.
    Finally, Rhode Island's historic mills and factories 
reflect our State's past as a manufacturing innovator, and we 
have a lot of these red brick elephants that became obsolete 
and vacant. The picture I am showing is the Ashton Mill 
constructed in 1867 for the manufacture of cotton textiles, and 
the next pictures shows an interior of the completed 
renovation. This was a $42 million project that saved an 
industrial landmark in our State but also created over 200 new 
apartments.
    As I have said, the Federal tax incentive just isn't strong 
enough to leverage the kind of investment that I have just 
described to you, and I would recommend three ways that 
Congress could address this issue. First, I would second what 
you have already heard about H.R. 3159, important technical 
changes.
    Second, you heard from the Associate Director of the 
National Park Service about a new effort to improve program 
delivery and make it more flexible. I had the honor to serve on 
the committee that developed this report, and so I certainly 
endorse its recommendations.
    But the third recommendation I would have is to call your 
attention to the fact that there is a basic historic 
preservation infrastructure that supports all the preservation 
programs. Historic preservation investments like the ones that 
I and other witnesses have described require information from 
State Historic Preservation Offices to identify potential 
investment properties, to nominate those properties to the 
National Register of Historic Places, to process the 
applications for tax credits and grants and other assistance, 
and to provide needed technical assistance, as you were saying 
earlier in the hearing, to make sure that we get to a 
successful conclusion, not to be gatekeepers but to be 
assisters in making the process work. All of these functions in 
State Historic Preservation Offices are funded by the Annual 
Historic Preservation Fund, and so we need to keep those 
appropriations in place in order to have a program 
infrastructure.
    In my State and in many others, vacant and under-utilized 
historic buildings are a standing inventory of potential 
capacity for needed housing, jobs, and public use. Historic 
rehabilitation programs put these buildings back to work.
    [The prepared statement of Mr. Sanderson follows:]

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    Mr. Turner. Mr. Baumgartner.

                  STATEMENT OF KEN BAUMGARTNER

    Mr. Baumgartner. Thank you, Mr. Chairman. I appreciate the 
opportunity of being in front of you this morning and having 
the opportunity to address this committee.
    My name is Ken Baumgartner. I am with the Corky McMillin 
Companies, and we are a full service real estate company in San 
Diego, California. We have been in business in San Diego for 
about 45 years and, over those years, we have developed 
approximately 25,000 homes, apartments, condominiums, etc. in 
the San Diego area.
    I would like to just make a personal note first. Mr. 
Bilbray made a comment about being baptized at the Naval 
Training Center. My dad, my 88 year old dad who recently moved 
from New Jersey to California was a seaman recruit in 1940. I 
was a seaman in 1969 at the Naval Training Center. So it has a 
personal flavor to me to see it restored as well as certainly a 
business interest as my position with the company.
    As our company was selected by the city of San Diego in 
1999 to rebuild the Naval Training Center, the former military 
base, I am hopeful that my testimony will provide you some 
perspective on how the private sector can partner with local, 
State, and Federal Governments to achieve the goals of both 
community revitalization and the preservation of historically 
valuable properties.
    Allow me to begin with some background. In 1993, the Base 
Realignment and Closure Commission closed the 550 acre Naval 
Training Center located west of downtown San Diego after 
serving for more than 60 years as a basic training facility for 
military recruits. Built in the 1920's, the Naval Training 
Center, now called Liberty Station, was notable for its unique 
architectural design of Spanish Colonial buildings.
    Once the base closed in 1997, the city of San Diego, which 
was deeded the base, embarked on a lengthy process with the 
Navy, numerous government agencies, community groups, members 
of the public to determine what should be built on the 
property. The result was a reuse plan that called for 
approximately 500 military housing units which have been built, 
not by us but have been built and occupied, it was the first 
thing that was built. A public park, a 48-acre public park, a 
non-profit art and cultural district, several schools, two 
charter schools are open right now, new housing, commercial and 
retail district, a restored nine hole golf course that was part 
of the Naval Training Center for eternity, and a hotel sector 
with about 1,000 units.
    Integral to the success of the plan is the reuse of 
buildings of historic value on the property. The historic core 
includes 50 buildings listed on the National Register of 
Historic Places, comprising over 600,000 square feet of space. 
According the plan, approximately 300,000 square feet of space 
is to be dedicated to use as an arts and cultural district that 
will be administered by a non-profit foundation. Over 300,000 
square feet of retail and commercial use will be developed for 
retail and commercial use.
    Once converted for reuse, the historic core of the project 
will truly serve as an economic engine and will drive the 
revitalization of the former base and surrounding communities. 
These vintage-era buildings will provide new office space, 
retail stores, restaurants, cultural events, entertainment, and 
jobs, all within walking distance of many new homes including 
the homes of hundreds of military families.
    Our greatest challenge in fulfilling this potential of the 
redevelopment project is to find a cost-effective way of 
adapting functionally obsolete military buildings into 
marketable properties that will accommodate the very specific 
uses allowed by the myriad of restrictions governing the 
property. An example would be rehabilitating small office 
spaces in old military buildings that are now zoned and planned 
for visitor retail.
    While maintaining the historical features, plan flexibility 
is needed for this retail reuse. It is important to note that 
we are not only restricted with what we can do with the 
buildings by Federal historic regulations but also by State and 
local historic preservation, project precise plans, city zoning 
codes, daily traffic limitations, because our project is 
located near the airport and within the coastal zone, runway 
protection zones and State of California local coastal 
programs.
    So we try to balance all these opportunities with different 
regulations and create a project that we think will be viable.
    Without programs such as the Federal Historic Tax Credit 
Program, renovating these buildings would not be financially 
viable, leaving us with few options but to leave them in a 
vastly under-utilized condition or in a state of disrepair. 
Overemphasis on historical preservation could negate the 
interests and threaten the loss of historic rehabilitation. We 
encourage an adaptive reuse where there is a balance between 
the economic viability of the reuse and the historic 
preservation.
    Mr. Chairman, in closing, it is our view that the Federal 
Historic Tax Credit Program can be a significant catalyst in 
achieving the goals of community revitalization and historic 
preservation.
    I just wanted to make a comment after hearing Dr. Matthews' 
testimony. Her office has been extremely cooperative in working 
with us through a myriad of regulations that we have never been 
faced with before in terms of processing applications, and we 
have learned an awful lot from the process and are eager to 
continue with it and see some wonderful opportunities to kind 
of jointly work with this Historic Tax Credit Program and 
achieve the goals that we are trying to achieve out in San 
Diego.
    So, again, I thank you, and I would certainly invite you or 
anyone on your staff to San Diego, preferably in January or 
February to view the Training Center. Thank you again for the 
opportunity to testify.
    [The prepared statement of Mr. Baumgartner follows:]

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    Mr. Turner. A great opportunity for a field hearing.
    I am going to start with Kathleen. Kathleen, I want to 
acknowledge, in asking you this question, that this hearing is 
because Kathleen came to us and was talking to us about 
historic preservation. We were familiar with the Cleveland 
Restoration Society and what they had accomplished, their 
leadership up in Northeast Ohio, and the complex transactions 
that they have done, and their knowledge of the Federal 
programs, and really how they should be modified and made more 
user-friendly, and the needs for additional resources.
    When you came to us, Kathleen, obviously, one of the things 
we talked about was H.R. 3159, the need to modify the Historic 
Tax Credit Program and make it more user-friendly, but since it 
is from your leadership that you came to us and said we need to 
highlight this whole area a whole lot more, I thought I would 
turn to you first and say: Are there things that you want to 
make certain get highlighted from this hearing and things that 
we might have missed that you want to add at this point?
    Ms. Crowther. Well, thank you, Mr. Congressman.
    I think that a lot of work has been completed by the Park 
Service and the National Trust for the Revitalization Bill and 
the tax credit program. So I think that it would benefit all of 
us to act speedily on those measures.
    And then second, I would like to emphasize the value of 
Community Development Block Grant funds in American cities that 
are facing significant issues of poverty and out migration of 
the middle class. We have been able to knuckle down and get the 
use of those CDBG funds, but they are not easy to use really, 
frankly, for historic preservation organizations.
    So streamlining some of the rules and regulations with 
regards to the use of them, in particular, the lead paint 
abatement difficulties which John Leith-Tetrault referred to 
would help local organizations on the ground. But most 
importantly, it is preservation of those funds and increase 
those funds because they are deployed for a wide range of 
things.
    My concern really, I think it is the concern of many people 
in historic preservation is this urban sprawl issue which is 
sucking the life out of cities and is creating soft markets 
where you just have to keep layering incentive after incentive 
after incentive in order to balance it and create the desire 
for the private sector to invest. In thinking over my own 
testimony, I felt that it was important to really lay that out. 
Urban sprawl, the wastefulness that is created is going to hurt 
our global competitiveness. I think Thomas Friedman in his book 
that is a New York Times bestseller, The World is Flat, said 
that in part. So I think in this age of limited resources, we 
need to be thinking how we spend those resources from the 
Federal level so that we preserve our farmland and our 
wilderness and we get the full economic value out of the built 
environment that we have, and much of that is historic.
    Mr. Turner. Bootsie, in your area in Wright-Dunbar and in 
looking at your testimony, you have stacked in the 
successfulness of the project that you have--both from when you 
served as a City Commissioner and advocate for this project 
when there wasn't one all the way to where you are now the 
Director of Wright Dunbar, Inc.--a number of the vehicles that 
were discussed today. You have within that territory a National 
Park. You have a home component that includes historic home 
rehabilitation. You have a commercial district where you are 
looking at the rehabilitation of those properties and also 
attracting then businesses and jobs.
    In some of your testimony, you mentioned stacking 
transportation funding, Community Development Block Grants, the 
Main Street Community, the Preserve America Programs and Grants 
that you have received. Congratulations also on your success 
that you mentioned with Urban Nights. I did hear what a 
wonderful experience that was. Of the Urban Night events that 
happened throughout the community, it was Wright-Dunbar that 
was the attractive site that people went to and that people 
were amazed at the amount of renovation and restoration that 
has occurred and that was a major attraction to pull people in 
the area.
    One of the things that we struggle with is how do all these 
programs stack and work together. What advice would you have 
for us in both gaps in funding that you see and ways that these 
programs can be improved, and what tools are you missing?
    Ms. Neal. It is real important that Community Block Grant 
funds are made available continuously to the urban communities 
to address blight and flight, and that is one tool that is 
critically important.
    The other part of that is our biggest challenge is the 
financial gap to get the buildings from being structurally 
stabilized, dry and safe to actually being put back into reuse. 
We have done a great job, and we have had the resources to 
stabilize the building, but from a private investor's 
perspective, the gap is still too large to, in fact, occupy the 
building. So that is the challenge that we have. We have 
beautiful facade improvements, but however we need to get the 
buildings occupied; so having additional resources.
    Also for the Wright-Dunbar area in particular, the Dayton 
Aviation Heritage National Park was funded at one level and has 
not yet today received that amount of appropriations that the 
legislation indicated when it was first started. So it would be 
great if the National Park would just be funded at the level 
that it was originally awarded. That would be important to us 
as well.
    There is a new centennial challenge called the National 
Park Centennial Challenge that is just emerging. When I was 
preparing to come to Washington, I talked with our partners 
because it takes partnership to be successful. So the National 
Park, the Dayton Aviation Heritage National Park asked that I 
would ask for consideration for the National Park Centennial 
Challenge as we get prepared for the centennial celebration of 
the National Park System in 10 years.
    And so, with those tools, the Historic Tax Credit, plus 
your creativity is going to be really important as we move 
forward because historic preservation can be the catalyst to 
rebuild urban America.
    Mr. Turner. Kathleen brought up an important issue that I 
would like to give others an opportunity on which to comment, 
and that is when we implement tools of historic preservation, 
we are saving a structure that perhaps had not been occupied, 
that then results in its use and then the counter effects to 
dissuade someone from going out into a greenfield and having 
urban sprawl. Could you please speak for a moment on your 
experience and what you see as we look to our areas that 
already have infrastructure, that already have investment, and 
preserve those and how they also then help preserve our 
communities by not having new development and new construction 
that might waste what we see as abandoned opportunity with our 
historic properties that are under-utilized?
    Mr. Sanderson. Mr. Chairman, if I could jump in on that, 
coming from a small State, we care a lot about every open green 
acre that we have in Rhode Island. Our Office of Statewide 
Planning estimates that a new housing unit consumes about two 
acres of land on a statewide average. Our Historic Tax Credit 
Program has created more than 5,000 dwelling units in existing 
buildings in existing cities with existing infrastructure. So I 
like to tell people that this program is not only saving 
historic places; it is making Rhode Island a bigger place 
because if you multiply those 5,000 units by two acres a piece, 
we have just added 10,000 acres to our State. I think it is a 
good point.
    Existing infrastructure, utilities; and transportation is 
something that is often overlooked. In my testimony, I noted 
that 75 percent of the investment is occurring in census tracts 
below the statewide median of income. The idea that economic 
development, that community development should be based on 
ownership of one or two personal automobiles for every resident 
in order to get to and from their place of work, to their 
school, to do their shopping, I think is a luxury that many 
communities can't afford. We need to rehabilitate our 
communities in a way that mass transportation is possible for 
those that want to use it as well as to save infrastructure.
    Mr. Turner. Does anyone else wish to comment on that topic?
    Mr. Baumgartner. We have largely been a suburban developer, 
and I must admit we are responsible for a lot of the sprawl 
that is in San Diego, but it has provided a lot of housing for 
a lot of people that have benefited substantially over the 
years. As houses have gone up in value, it has been a great 
source of income, and it has been a wonderful place for people 
to raise their families.
    I think the situation in San Diego is really working with 
combined local governments to provide transportation and 
infrastructure back into the areas that we are trying to 
redevelop. Many of the areas have been lower density single 
family areas, and when you basically introduced higher 
densities into those areas which is needed for a lot of the 
rehabilitation programs to work--again, this is one perspective 
that maybe is a little different than other places--we really 
had to deal with providing the additional infrastructure that 
local government is looking to provide in those increased 
areas, i.e., more parks, more schools, more public facilities 
to accommodate the higher densities. So that has been a 
challenge, and I know the city of San Diego has been working 
for some time on the concept of city of Villages where we are 
looking at some of the Smart Growth principles and applying it 
to various parts around the town.
    So I think the tax credits on a much more global scale is 
one that our company is definitely looking at as we look at 
looking in more than looking out. As we kind of look at our 
future in San Diego, we are going to be building more higher 
density and looking at more rehab programs and ability to kind 
of try to be a part of the rehabilitation and the continued 
growth and still be active as a builder in San Diego.
    Mr. Turner. I want to thank each of you for the time that 
you have taken to prepare and also the time that you have taken 
to be here.
    We do have some additional written questions that have 
arisen as a result of your written testimony that are more 
technical in nature that, with your permission, we are going to 
submit to you and leave the record open for a 2-week period to 
afford receipt of your response if you are willing to 
participate. Also, for the first panel, we will be doing the 
same. They really go beyond just the subject matter of which we 
have discussed here but are a result of the written testimony 
you have submitted.
    Before we conclude, I want to give each of you the 
opportunity if you have any closing remarks or any items that 
you would like to place on this record as part of your 
testimony before we close. Does anyone wish to add anything to 
their testimony?
    If not, I want to thank you all very much again. This is 
certainly an important issue. You have been able to see manners 
in which we have changed communities. I think that the topics 
that you have in front of you of how Federal programs can be 
utilized to change communities and to provide capital are 
probably the most important ones that we can discuss in the 
success that you have accomplished.
    We know that you have changed lives. You have changed 
communities. But how can we do it better? How can we be your 
partner is the topic that we want to continue our discussion 
in, and you certainly are going to be an incredible resource 
for us looking at your success and how we can be more 
successful in the communities.
    So I want to thank you.
    [Whereupon, at 12:25 p.m., the subcommittee was adjourned.]
    [The prepared statement of Hon. Wm. Lacy Clay and 
additional information submitted for the hearing record 
follow:]

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