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Originally published in the Historic Nantucket Vol. 45, No. 2, Fall 1996, p. 149-151

Preservation Restrictions : A Creative Tool for Preserving Private Property

By Cecil Barren Jensen

We all have our favorite unspoiled corner of the world. Whether it is for the solitude of a mountain hike, a run along a rural back road, or a family picnic on a beach, we have our cherished memories of a place that we hope will never change. We are also aware that a national system of parks and highways makes it easier for more of us to see remote and pristine environments. Development allows us to take family vacations in the mountains, drive our cars deeper into rural America, and has brought many more people to Nantucket. The concern of many who own property in such locations is how to preserve their corner.

Fortunately, creative tools have been available for preservationists. These include creating a historic district, donating or selling property to a nonprofit organization, and common-law covenants. One of the most effective ways, however, for individual homeowners to restrict future development on their property is to create a preservation restriction. The Nantucket Historical Association is pleased to hold three such restrictions.

There are two different types of restrictions: conservation restrictions can be created to preserve scenic and open spaces; historic preservation restrictions protect the exterior or surrounding land of historic buildings and safeguard interiors of significant buildings. These are all legal agreements property owners make to restrict the type and degree of development that may take place on their property. The restriction is given to a qualified conservation recipient, such as a public agency, land trust, or historic preservation organization The best way to understand this is to think of your property as a bundle of sticks. A landowner may sell or give away the whole bundle, or just one or two sticks. These may include, for example, the right to construct buildings, to subdivide the land, or to restrict access. Owners identify specific rights that they want to restrict in order to protect the property. By giving away certain rights while retaining others, the owner is granting a restriction to an appropriate third party who becomes responsible for enforcing the restrictions.

Historic preservation restrictions preserve the facade and surroundings of historic structures or historic land areas. It is this kind of restriction that has been granted to the NHA. We have two facade restrictions: Sherburne Hall on Centre Street and the Nantucket Looms building on Main Street. We also hold a preservation restriction at 37 Hulbert Avenue. Our donors have their own reasons for creating restrictions (see sidebar for the Hulbert Avenue property) but generally there are a number of advantages to creating a restriction.

Without giving up the tide, property owners continue to live in their homes or use the property at the same time guaranteeing its preservation. They also are assured that the integrity of the property will be preserved after their death. And finally there are tax incentives for the owner. For federal income tax purposes, the most important benefit is that the value of the donated restriction is deductible as a charitable contribution. For federal estate tax purposes, the value of the estate will be reduced because of the restriction's development limitations. State laws may authorize deductions similar to federal provisions and also may decrease a property's local tax assessment and therefore its local property taxes.

Once a restriction is in place, preservation organizations and public agencies with only a partial interest in the property can protect properties against adverse changes. The full burden of property ownership is left with the grantor or future owner of the property. Since a preservation restriction can be made for a term of years, or in perpetuity, the holder of the grant and the grantor must be certain that the intended restrictions are clearly defined. For instance, they may choose to forbid or limit all alterations in exterior or interior features of the structure, changes in appearance or condition of the site, or uses that are not historically appropriate. Whatever the plan is, the details must be clearly stated in the restriction. Endowments may also be required to cover administrative and legal expenses, including the monitoring and enforcement of the preservation restriction conditions.

For the NHA, a preservation restriction is a valuable tool in guarding historic sites. It guarantees that historic properties will be conserved, while avoiding the financial responsibilities of owning a historic home, site, or museum. It is encouraging to watch this trend, and it is hoped that through restrictions the historic integrity of the island will be preserved for generations to come.