Question:
When does it make sense to lease or invest in an older building rather than build from the ground up?
A: Historic buildings can actually be a great way to help a business tell its story. Time isn’t just money, as the saying goes. Time gone by can have value and distinction.
Businesses need to tell a good story to be successful. To remind myself of this, I use an acronym coined by Jonah Berger: SUCCESS, or Simple, Unexpected, Concrete, Credible, Emotional, and built around StorieS. Good stories are the magic behind viral videos, word-of-mouth advertising and the social currency of the products and services people remember years after they’ve forgotten the price. The challenge, of course, is that stories can take time. Most new ventures haven’t been around long enough to have constructed one of their own.
Have you ever wondered what makes an English pub so special? Well, I did once, and I can tell you why: it’s England. My experience was that of winding and narrow roads one must take to get there, made of cobblestone, ending at a destination that appears as though it sprang from a book, filled with myriad imperfections accumulated over centuries. The structure is the experience; the beer was OK.
When feasible, entrepreneurs might consider whether a historic property can lend credibility and social currency to a venture that might otherwise be little more than a business plan, devoid of a (development) dream that compels action. I purchased and converted a former ice manufacturing facility into a modern brewery. The first brick was laid in 1927; I found it in 2016. Long before I arrived, that building had already accumulated scores of stories, and customers seemed to appreciate being invited into the next chapter. An attempt to utilize the same aquifer that once made ice to make beer didn’t work out due to modern codes, but colloquialisms from that past — “Have an ice day!” — were retained.
If you’re considering whether to build or buy, a few things are worth keeping in mind:
- Explore historic tax incentives. Oregon was first in the nation to offer a preservation tax incentive for historic properties in 1975, and the federal historic tax credit can offset up to 20% of qualified rehabilitation expenses. That won’t eliminate risk, but it can soften the blow when a project inevitably uncovers surprises.
- Share the process. Historic rehabilitation projects tend to generate attention because they’re visible and relatable. People enjoy seeing old buildings brought back to life, and that interest often translates into earned media and community support.
- Recognize the value of authenticity. In an era when almost everything can be replicated, authenticity remains surprisingly scarce and may be your most unique value proposition.
Before pouring a foundation, it’s worth asking whether there’s already a building in town with a story worth continuing.
Central Oregon Community College’s Small Business Development Center offers free, confidential professional business advising and a variety of low-cost courses to help entrepreneurs through the business lifecycle. Visit cocc.edu/sbdc to learn more and read testimonials.
About the Expert:
Keith Sherrill, the small business management coordinator at COCC’s SBDC, served within the U.S. Army’s elite 75th Ranger and 160th Special Operations Aviation regiments. He applied his lessons learned and leadership to his own entrepreneurial pursuit, building an award-winning microbrewery and beer brand from the ground up. He holds an MBA from William & Mary and is a graduate of the Stanford Graduate School of Business’s Ignite program.
