Facing delays in receiving federal funds, the Maine State Preservation Commission has canceled more than half a dozen grants in an attempt to avoid laying off nearly half its staff.

The terminations included about $145,000 worth of grants to nonprofits and municipalities, which were canceled last week, said Director Kirk Mohney. Instead, the commission will use that money to keep paying four employees whose salaries rely on federal funds that were allocated months ago but have not been distributed. Those employees are largely in charge of overseeing federal grants, conducting impact reviews and reviewing proposed construction projects that qualify for preservation tax credits.

Developers and preservation advocates say that a potential loss of funding and personnel would be devastating to historic rehabilitation projects that rely on the commission to secure major tax credits. Without those credits, many projects would be unfeasible, some said.

“We were in a situation where we were running out of money to pay for staff, basically,” Mohney said. “We’re operating off last year’s grant.”

By cutting grants to Maine nonprofits that work in historic preservation, the commission has delayed possible layoffs, Mohney said. But he was not sure how much time they had bought, though he hopes it will be enough to make it through the summer.

“Into September or how far into September is really a big unknown,” he said.

The commission, part of a national network of state preservation offices, works to chronicle and maintain Maine’s inventory of historic sites. Its responsibilities include educating Mainers on their state’s storied sites, nominating properties to the National Register of Historic Places, and helping property owners and developers secure state and federal tax credits for rehabilitating buildings, among other duties.

MONTHS OF DELAY

In recent years, the state office has received about $870,000 annually from the federal government, which is distributed by the National Park Service, Mohney said. In developing its fiscal year 2025 budget, he said, the office anticipated a similar amount, since the formulas that determine each state’s allocation had not changed.

But Mohney said the park service has not yet begun transferring money allocated for the fiscal year that began in October.

So far, no state offices have received their anticipated funding, according to the National Trust for Historic Preservation. Layoffs have already begun in some places, including Ohio, where about a third of local staff were cut last week, the Ohio Capital Journal reported.

“I’m going into my 10th year (as director), and I was assistant director before that,” Mohney said. “I don’t remember it going this long where no part of the grant was available.”

A spokesperson for the National Park Service did not say when the already promised funding would be made available when asked.

“Pending financial assistance obligations, including grants, are under review for compliance with recent executive orders and memoranda,” the spokesperson said, echoing language that had been used to justify other federal funds being withheld or delayed. They did not specify with what orders the preservation money may conflict.

A spokesperson for Sen. Susan Collins, who chairs the Senate Appropriations Committee, said she is in contact with the parks services’ acting director, Jessica Bowron, “to seek clarification on this delay and urge them to expedite the disbursement of these funds,” but did not offer details on what the timeline could be.

Previously, the commission has been able to request and secure a portion of its funding in the face of delays, but there has been no way to do so this year.

Tara Kelly, executive director of the independent, statewide nonprofit Maine Preservation, said she received a letter on May 9 notifying her that a roughly $16,500 grant from the state commission would be terminated. That money would have covered more than half the cost to develop an online tool for historic property stewards to plan rehabilitation funding and determine the best use of their site.

“This is an important project; there is absolutely a need in the state for this kind of tool,” Kelly said. “But as the statewide advocate for historic preservation, we immediately became concerned about the bigger picture, that the reasoning behind the loss of the grant is because of a lack of funding reaching the commission.”

She argued that Maine’s historic landscape — and the state’s deep-seated commitment to maintaining aging structures — is a major part of what makes the state such an attractive destination.

“Why people come here, and visit, and spend their money and enjoy life is because of this very well preserved sense of place and history,” Kelly said.

Mohney said the at-risk positions in the state commission include staffers responsible for administering federal programs: They review thousands of permit applications that could impact historic sites, oversee grants to nonprofits and municipalities and evaluate applications for state and federal tax credits.

Those tax incentives can total 45% or more of a rehabilitation project’s cost and are a crucial part of many budgets, Mohney said.

CRUCIAL CREDITS

Developers say the incentives are essential — as is the commission’s role in helping secure them.

Dash Davidson, principal of High Tide Capital, said historic rehabilitations carry unique challenges and complex costs that simply do not exist in new construction, such as preserving historic masonry or removing historic features without destroying them. Often, there is a gap between the available funding and the project’s budget needs, which the tax credits alleviate.

“If you take away the tax credit program, not only are these projects not feasible, they’re not even close,” Davidson said. “Everyone’s talking about … the housing crisis and looking to diversify the economy in Maine. … A real unsung hero in that whole campaign has been the tax credit program.”

Davidson said the review process can take months, and it would likely take longer if staffing cuts undermine the commission’s ability to process applications as they come in.

Kevin Bunker, founding principal of development company Developers Collaborative, put it bluntly: “Time kills deals.”

As interest rates and construction costs continue to rise, slowing down new construction nationwide, historic rehabilitations grow increasingly attractive, Bunker said. His company has completed nearly 20 historic rehabilitation projects since its founding about two decades ago.

“Being able to access historic tax credits in a development climate like this — those are some of the only deals that are consistently working,” Bunker said. “It (could) cause all kinds of problems with a project if it’s sitting on the desk at the state waiting for the one reviewer to work his way down to it.”

This story was updated Monday, May 19, to include a statement from the National Park Service that was received after publication.