HERITAGE PRESERVATION EASEMENTS Heritage Preservation Easements   Gibb-Sanborn Warehouse (1885)   In 1974, Heritage accepted its first preservation easement: the "Nightingale House" at 201 Buchanan Street. Since that time, Heritage has accepted donations of over 60 permanent preservation easements, creating one of the largest preservation easement programs in the West. Some notable donations include the Gibb-Sanborn Warehouse (1885, left) which is one of a handful of structures surviving from Gold Rush era and the Vollmer House (1885, below) which barely escaped the 1906 fire. To this day, Heritage is the only organization in San Francisco with a program to receive, administer, and enforce preservation. In this capacity, Heritage is committed to exercise a long-term stewardship role for donors of historic structures and their properties. Heritage is part of the National Trust for Historic Preservation's Statewide and Local Partners network, an association of over 100 high-performing nonprofit preservation organizations from across the country, and is deeply vested in the preservation of San Francisco’s rich cultural landscape. For further information on preservation easements and historic preservation, read Architectural Historian Anthony Robbins’ article The Case for Preservation Easements: When Municipalities Fail to Protect Historic Properties. What is a Preservation Easement? A Preservation Easement is a legal agreement between a property owner and Heritage to preserve and protect the entirety of a building’s exterior. This legal instrument ensures the protection of architecturally and historically significant structures by limiting the future owner's right to demolish the building or to make destructive alterations. The basic premise of the preservation easement agreement requires the owner to seek pre-approval from Heritage on any significant exterior change to property. When Heritage accepts a preservation easement, it receives the legal right to review and approve the design of proposed changes to the portions of the structure covered by the easement. All other rights and obligations of ownership, such as the right to sell or lease the property as well as the responsibility for maintenance, remain vested in the owner. To bind future owners of the property, a preservation easement runs with the title to the property. For additional information on preservation easements, please follow the link to the National Trust Easement Resources webpage or contact Bill Beutner at San Francisco Architectural Heritage: 415-441-3000 ext. 10. What are the advantages of a Preservation Easement?     Vollmer House (1885) The principal benefit of donating a preservation easement is the guaranteed, permanent protection of historically and architecturally significant buildings. Because each preservation easement is tailored to meet the needs of the property owner, it acts as flexible tool to preserve the property for future generation. In addition to the satisfaction of contributing to the preservation of the community's architectural heritage, donors also enjoy substantial Federal and State income tax benefits for qualifying donations by treating the value of the easement as a charitable contribution under Internal Revenue Tax Code Section 170(h). The donation value is deductible from federal income taxes in the same manner as other non cash charitable contributions. For additional information on historic preservation tax incentives, please follow the link to the U.S. Department of the Interior’s Historic Preservation Tax Incentives webpage. Preservation Easements Program In order for a property owner to receive the income tax deduction, the government has a few requirements for easement donations. This guide will describe the sequence of steps necessary to complete the donation process. PROCESS AND PROCEDURE The National Parks Service in Washington, D.C. reviews all historic properties to determine eligibility for IRS income tax deductions. The property owner and Heritage must adhere to certain requirements to ensure the validity and expediency of the donation process. State and Federal review may take up to sixty days for final approval of eligibility. Should the property owner wish to pursue the IRS income tax deduction for the present income calendar year, the process should begin well in advance of the end of the year. This process assumes that the structure is on the National Register of Historic Places. Heritage requires the property owner to submit the following: (1) Two application forms, the Preservation Easement Fact Sheet and Building Information File. (2) Photographic documentation of the subject property. Please photograph all sides (elevations) of the property as well as the grounds and garage, if applicable. Photos should show the entire sides of structure from ground to roof. Digital photos can be emailed to info@sfheritage.org. (3) In order to qualify for the income tax deduction, IRS rules require that if a mortgage and/or home equity loan exists on the subject property, those lending institutions must agree to and sign the Lender Acknowledgment Agreement contained in the legal document. If no loan exists, such subordination is not an issue. (4) A copy of the Current Real Estate Appraisal of Property. IRS rules require that a qualified appraiser who is experienced in easement valuations be hired by the property owner to calculate the value of the preservation easement donation. (5) A copy of the National Register Nomination. (6) Application Fee ($250 residential, $500 commercial) Heritage will contact the applicant and make an appointment to evaluate the property. Upon his/her recommendation, the easement will be presented to the Heritage Board of Directors for approval and acceptance. Upon acceptance of the easement application Heritage will draft the easement contract. The donor will cover the cost of appraisal and any legal services in connection with the donation. A donation fee will be due when the signed easement contract is transmitted to Heritage. The donation fee will be 10% of the value of the easement, as determined by the appraisal accompanying the application. The amount of the donation fee may be subject to negotiation by the Executive Director and the Board of Directors. If you have any questions, please call Heritage at 415.441.3000.

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