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Every building has a history.

A history built in brick and mortar, solid, yet etched by the forces of Mother Nature and the passage of Father Time.

If left unattended, these buildings eventually crumble to the ground and are lost forever thanks to cost saving programs offered by the South Dakota State Historic Preservation Office and the vision of local entrepreneurs, these buildings are being saved and it's having a significant economic impact on South Dakota communities.

Ted Spencer and the South Dakota State Historic Preservation Office knew saving these treasured landmarks benefited the state's bottom line, but had no quantifiable evidence to support this theory.

So we decided to commission a study through the Rutgers School of Public Policy, and they have a great program in terms of analyzing the economics of preservation and historic preservation activities.

And in 2012, they began the study, and it was completed in 2013.

And the results we found were quite significant.

And it now gave us quantifiable information on what the economic impacts of historic preservation in South Dakota are.

In 2011, investment and preservation activities including historic rehabilitation spending, heritage tourism outlays, and budgetary spending by South Dakota historic museums, totaled 275.14 million.

In 2011, direct domestic travel expenditures in South Dakota amounted to about 1 billion.

And tourism is one of the state's key industries.

Heritage tourism is defined by the National Trust for Historic Preservation as traveling to experience the places, artifacts, and activities that authentically represent the stories and people of the past.

In 2011, heritage travelers comprised 22% of South Dakota's tourists and spent an estimated $237 million in the state.

This study proved that when people come to our state and they're coming to look at our wonderful historic sites and structures and monuments and historic landmarks, they tend to spend more money and spend a longer time in the state.

Heritage tourists do than your normal tourists.

So there are definite economic benefits to preserving the history and culture you know of our state.

This study also showed that in 2011, $275 million in historic preservation spending, including historic rehabilitation, heritage tourism, and historic museums created over 5500 jobs within South Dakota that generate 283.9 million in output, $96.3 million in labor income.

152.2 million in gross state product.

About $123 million to the state's total wealth, and 15.8 million in South Dakota state and local taxes.

When we do this in these local communities, it's proven that, you know, the economic benefits are there.

And over 75% of of the work stays right there in that local area, in that local community, in terms of buying the materials and using the labor.

Keeping the money local isn't something that we require, but it's something that a lot of the project proponents like to do.

They want to keep that money local.

They figure if this building is in Yankton or in Rapid City or in Gary, they want to keep those construction dollars local as much as possible.

It has a big impact on the local economy, and it's really an important economic tool, since the cost to renovate historic buildings can be staggering.

The State Historic Preservation Office and the National Park Service offer tax saving incentive programs and grants to encourage rehabilitation rather than demolition.

Our office administers two different tax programs.

First is the Federal Rehabilitation Tax Credit Program, and this program is jointly administered by the National Park Service.

The IRS, and the State Historic Preservation Office.

The goal of the program is to substantially rehabilitate certified historic structures, and it does that by offering a tax credit to property owners and the amount of 20% that is spent on the building rehabilitation.

The State Historic Preservation Office also administers what's called the State Property Tax Moratorium, and this is a program that offers a property tax break on a certified rehabilitation of a historic structure.

Their property tax assessment can't be raised for an eight year period based on the certified rehabilitation work that they do.

And at the end of that eight year period, their property taxes will be reassessed accordingly.

A number of people have taken advantage of these rehabilitation tax programs in South Dakota, and we traveled to four case study locations to demonstrate the economic impact these incentives have on communities.

At the corner of Third and Capital Street in downtown Yankton stands for Sir Charles Building, whose storied past dates back before statehood, when a hotel was built on the corner in 1891.

Downtown Yankton was a bustling retail hub for the area.

A local newspaper heralded the building as the most important improvement to Yankton for that year.

A witness to Yankton life.

In three different centuries, the building began to fade over time, and so did its usefulness to the city of Yankton.

The Sir Charles Building was no longer a gathering place in the center of downtown, but a dilapidated structure.

That's when Doctor Thomas Standage and the board of directors of Lewis and Clark Behavioral Health Services stepped in and began weighing their options.

Over the years, it had really begun to deteriorate, and we had a number of concerns regarding fire safety and and issues for the residents that were in here.

This building's kind of a problem for us, forever, because of its maze of hallways, lack of exits, doorways propped open or bolted shut, no fire alarm system, no sprinkler system or anything like that.

Once Doctor Standage and his staff identified how to best serve their clientele, they secured the $3.9 million needed for the rehabilitation and took advantage of several tax incentive programs, including the federal low income housing tax credits, home funds, and the state property tax moratorium from the South Dakota State Historic Preservation Office.

And this is a program that offers a property tax break on a certified rehabilitation of a historic structure.

And through that program, it's estimated that the owners will save about $80,000 total over the eight year period due to that state property tax moratorium.

Their property tax assessment can't be raised for an eight year period based on the certified rehabilitation work that they do.

And at the end of that eight year period, their property taxes will be reassessed accordingly.

Rehabilitating the historical features of the Sir Charles Building was a monumental task, which included refurbishing the historic tile floor.

Replacing original arched top windows which had been removed in 1981.

Tuck pointing.

The exterior brick.

And the paint colors were chosen to match the original scheme.

The interior of the building raised many safety concerns for residents and required extensive renovation.

Work started with a much needed sprinkler system, and the once confusing maze of hallways were opened up and labeled for easier commuting.

Apartments were updated with new, more efficient appliances.

A community room was added, plus office space was opened up on the main floor and in the basement.

The restoration was done.

Really a third of the of the building at a time, and we actually move, out of a group of residents, rehabbed that part of the building and then move them, back in, move out a second group and do that part of the building.

The vast majority of the work that was done on the facility was contracted locally.

So keeping our contractors busy with over $3 million worth of, you know, for some investment in this site was was really important to the commission.

And also the $3.9 million restoration was a big boost to the local economy in the short term.

But keeping the work local is only a small impact on the restoration project.

The building now holds 34 newly renovated low income apartments in downtown Yankton, added living spaces close to shops and restaurants benefits local businesses.

The additional office space brings more people downtown and gives two organizations a place to operate and grow.

All of which increases local tax revenues.

In 2011, the project received the coveted Doorknocker Award from HUD, which recognized the owners for their outstanding work in producing affordable housing.

The Sir Charles Project was a real win win for Yankton.

The city was able to preserve a long standing historical building in the downtown area, while ensuring that 34 apartments remain safe and affordable for their residents for years to come.

The security Bank building in downtown Sioux Falls is another historic building which, thanks to renovation efforts, has remained functional for almost a century.

Before becoming a bank, the area the building sits on was known as the Sherman Block after Edward Sherman, a prominent figure in Sioux Falls history.

It was here that Sherman recognized the importance of the centralized location and built the city's first post office.

The post office was two stories high and also housed several other government offices.

After ten years, Sherman contracted W.L.

Dow to add a third story theater to the building, which was one of the first theaters in Sioux Falls.

The structure didn't last long, however, and after four years it was torn to the ground.

In 1916, a bank was built for the security Bank company.

It was the first steel structured building in South Dakota.

It's the same structure that stands today.

The original eight story building had a double height first floor that served as the bank, which was robbed by John Dillinger and his gang.

Although the exterior of the building remained mostly unchanged through the years, the interior has seen major renovations.

In the 1950s, the first floor bank was completely remodeled and the original bank vault was lowered to the basement.

Original windows were walled in.

Ceilings were lowered, brick and beams were covered, and office spaces in the top six floors were frequently remodeled.

When a group of investors, including Norman Drake, purchased the building in 2005, only two floors of the building were occupied and most of the interior had lost its original character.

That's when the owners decided to partner with the South Dakota State Historic Preservation Office for guidance.

The project owners were able to find some historic drawings of the building, so they were able to recreate the first floor and the mezzanine as they would have existed when the building was constructed.

We spent from about 2005 early 2005 until November 2007, renovating the building.

And, we opened in, I think, October of 2007, and within a month or so we had the 13 apartments.

Later that year, a commercial business occupied the fourth floor, and by 2011 the building was at full occupancy.

Today, floors five through seven are residential and the bottom four floors are commercial space.

Great lengths were taken to restore the original character of the building.

The stone outside was cleaned and reappointed.

New fire escapes were added.

Windows were restored to their historic character.

A parking garage was added.

Original steel beams were uncovered, and a fitness room and lounge area were added to the basement for tenants.

During renovation, any of the original wood and glass that could be saved was utilized.

As expected, paying for such an undertaking posed a major challenge to the owners.

This building was financed through, a range or a variety of sources.

One of it, one of it was a conventional loan through a bank.

Local bank here in town.

Another was through the historic tax credit program.

Those two went hand in hand together.

We applied for the tax credits at the time we started, the renovation of the building and, secured the financing from the bank with them.

If it hadn't been for the historic tax credit program, renovations like this became, fiscally challenging.

The owners used the federal rehabilitation tax credit, and they also used the state property tax moratorium for this program.

For this project and for the state property tax moratorium, it's estimated that they're saving about $350,000 total over the eight year course of the moratorium.

So that's a big savings for those owners.

The ability to recoup some of their investment costs before their property taxes are increased.

The owners also utilize the City of Sioux Falls facade easement program, which contributed $100,000 of capital to restore the facade on the building.

To appreciate the positive impact of historic preservation in South Dakota.

Look no further than the security Bank building in the heart of Sioux Falls.

All $7 million needed for the renovation stayed in South Dakota.

Residential and commercial space preserved here help fuel a thriving downtown economy, and a rich part of city history remains on display.

This preservation effort, along with 23 other major renovation projects completed in the downtown area since 2000, has brought to life a thriving residential and commercial life for the city.

We want to make sure that the building will serve a purpose in that town, whether it's a need for affordable housing or a need for retail space or office space.

It has to be meeting that need or it's not going to be a successful project.

I think the most rewarding part for me has been to see this, this building come back to life and to see the entire downtown come back to life.

As I kind of remember it as a small child, and the sense of community that's kind of grown in the downtown, environmental room between the downtown residences than the retailers that are down here.

That's really been the most rewarding piece for me.

The Windsor Block in downtown Rapid City, once used mainly as an old warehouse and in danger of being lost forever, is now a bustling block blooming with shops and apartments.

The structure was saved due in part to tax saving program from the South Dakota State Historic Preservation Office.

The National Park Service and the long time Rapid City resident who saw the same vision that historic preservation can have on an economy.

Dan Senftner's affiliation with the Windsor Block began in 1974, when he was working in a piano store that was on the first floor.

In 1985, he purchased the piano business and the building, keeping in mind the potential the second floor could someday offer.

At that time, I owned the piano store, and, this was being used as a warehouse for pianos, organs and that type of thing for our business.

But I always had the vision of.

What could this be?

I mean, you had 13,000ftup here.

That's strictly warehouse doing hardly anything.

Not a revenue generator, not economic development, not moving things in a forward direction.

So we took a close look at it at that time, and I just kind of watched it over the years.

You know, there comes a time when you could do things financially and then a time when you probably can't.

In 85 was when I purchased the piano and organ business.

So at that time, I couldn't be taking on any more load at that moment.

But then as we watched it, everywhere I went, the cities that I went to, I visited their downtown lofts and I started to look at different things.

When I went to Denver, Colorado, I'd get with some of the loft owners in that area and say, you know, what did you do?

When did you do this?

I went to other cities, had done economic times, had gone through the hardships and started to see what they were doing to build things up.

Dan knew that rehabilitating the Windsor block would be a costly undertaking, but after doing some research, he discovered tax saving programs offered by the South Dakota State Historic Preservation Office and the National Park Service.

We learned the tax credit program.

I learned it inside out and backwards, so I really knew what was going on and how we could move this project forward.

Obviously at that time then had the financial backing to get the project taken over.

And today at this point, they're beating our doors down.

You know, people don't get serious about taking a look at the tax credits.

The tax credits are a big deal.

The other thing is the moratoria, the tax moratoriums.

A great big deal.

Before the rehabilitation, the Windsor block was considered a non contributing resource in Rapid City's historic district because of prior renovations, which covered the front of the building.

In the 1960s, there was a modernization project done.

That modernization project essentially covered the second story of the building with sort of this plywood strange thing.

It looked like piano keys.

It was just very strange.

But the entire second floor was covered by this.

Well, a new owner came along and decided he wanted to see what was under that plywood facade, and he started peeling it away.

And lo and behold, he found the 1880s original facade was largely intact.

So as he was able to take off that 1960s slip cover, our office, the State Historic Preservation Office, was able to work with the National Park Service to get the building reclassified as a contributing resource.

And that opened him up to the possibility that he could apply for the tax and the grant programs that are office tours, administered through the State Historic Preservation Office.

Once the Windsor Block qualified for the property tax moratorium offered by the South Dakota State Historic Preservation Office, they applied for a federal rehabilitation tax credit from the National Park Service under the Department of the interior.

Then you have to put in part two, which is the, description of the rehabilitation.

You followed the Secretary of Interior standards and described to them exactly what you're going to do.

Where are you going to do it?

Pictures, elevations.

Everything that they would need was basically there.

Look, they've never seen this building before, so you need to give it to them and so they can walk through it and understand it.

The whole description, the state historic property tax moratorium saved Sanford for $17,000 a year for eight years.

And the Deadwood Fund grant contribute unit an additional $10,000.

When the project is completed, the owner will be eligible to receive an income tax credit equal to 20% of the total project cost under the Federal Rehabilitation Tax Credit Program, all of the 1.4 million project dollars stayed local.

Keeping the dollars local impacts the economy in the short term, but the transfer summation of a building from an empty, non contributing second story into 13 new apartments helps the overall economy of the historic downtown district in the long term.

We're really kind of a pioneer of, you know, like, what are you doing?

Are you really sure this can work?

You know, you might be a little bit crazy, but then they don't really dig into the fact of historic preservation and the economic impact it can make, you know, less.

So it's exciting to see that, exciting to see businesses go in to buildings that some people would say, that's just an old building.

Just tear it down.

But it's still a viable building for today.

Buffalo Ridge Resort is an example of how a driven individual working with the state Historic Preservation Offices, state property tax moratorium program can restore a town's history, create numerous jobs, and significantly enhance a local economy.

The town of Gary was the original site for the school for the blind from 1900 until the early 1960s.

In 1961, state officials decided to move the school for the blind from Gary to a more centralized location, and the school was relocated to Aberdeen.

The school was put to use for a short time as senior housing, but by the 1970s, the formerly proud focal point of Gary, South Dakota was reduced to an abandoned, lifeless campus.

Over the next four decades, the campus deteriorated brick by brick building, by a building which raised questions as to whether or not it was even feasible to bring it back to its once prominent stature.

South Dakota native and entrepreneur Joe Cole had a vision for the dilapidated property.

He could see the potential economic boost rehabilitating the campus would have for the town of Gary.

He purchased the property in 2008, and organized a community meeting in the former girls dormitory to discuss what the townspeople wanted to see happen to the former school for the blind.

We had 130 people, in January, if you can believe that.

It was 30 below out, and we had, lit up all the pillars around.

Just temporary lighting to make it look on a frosty night and, had coffee and cookies and invited the whole community in there.

We boarded up the windows and had the ballroom heated up and, got everybody's team building ideas and kind of what you see is what the community wanted at the time.

So that's how we ended up with what we have here today.

Phase one of the project included construction of a bathhouse, reminiscent of the old chicken coop to accommodate 18 new campsites.

The boys dormitory was renovated into a 19 room hotel.

The girls dormitory transformed into a business and event center, plus, Lake Elsie was restored and stocked with trout.

Construction costs for phase one alone poured $2.2 million back into the local economy.

Over $1 million of wages were paid out to local contractors during this construction phase.

And the property owner wanted to keep those dollars local.

So for the most part, they were staying either within Gary or within the state of South Dakota.

There was probably anywhere from 60 to 80 subcontractors working full time here in a six month period to achieve that, that deadline that we would put on.

But it was very beneficial.

You know, everything we tried to run through our community as much as we could.

And I think that was great.

We wouldn't had to done that.

He could have done it cheaper stuff elsewhere, you know.

Renovation in phase one allowed for tourism cash flow into phase two, as the newly renovated ballroom and hotel were leased for weddings and other events.

The newly remodeled office space on the second floor of Woodbury Hall is leased by a Minnesota business that relocated its office and brought eight jobs to the town of Gary.

Today, the 11 acre campus is a full service resort that created 56 full time jobs and a town of around 250 people.

The economic impact of the Buffalo Ridge Resort restoration goes far beyond job creation, however.

The resort averages around 7000 guests each year, which has a significant impact on sales, tax revenue and property values in the area.

The city has a 1% sales tax, so we get a sales tax off everything that goes on down here.

So that's a big boost to the city itself.

So to be able to take those buildings and turn them into something new and turn them into this resort and the hotel and the business center has really brought together the town of Gary again and brought them, you know, a reason to appreciate those buildings and that campus.

Restoring the resort would not have been economically feasible without help from the South Dakota State Historic Preservation Office, who helped Kovac secure the state property tax moratorium for historic properties.

It provides an eight year moratorium, a delay on the increased property tax assessment for the preservation project, saving the resort $1 million over the next eight years.

Kovac also used state aid for hazardous material, which saved $100,000, and utility company rebates.

I have to believe a lot of these properties would not be rehabilitated if that.

If that didn't exist, it just people would not stick their neck out to do it.

I'm afraid.

Thanks to one man's vision, along with valuable incentives offered by the South Dakota State Historic Preservation Office, a once useless campus is once again a hub of social and economic activity for the city of Gary.

So it's been a mission of mine, if you will, that not every small community is going to get saved.

But there is ways to work big business in small communities.

These four case studies are just a few examples of the hundreds of rehabilitation projects across South Dakota, administered by the State Historic Preservation Office.

The study proves that preserving buildings instead of destroying them is good for the environment and the economy, while at the same time preserving their historical integrity and for future generations, these buildings will continue to stand as a beacon of where we have been and where we are going.

As South Dakotans.