Academic journal article Entrepreneurial Executive

Entrepreneurial Tax Opportunities through Historic Preservation

Academic journal article Entrepreneurial Executive

Entrepreneurial Tax Opportunities through Historic Preservation

Article excerpt

BASSET&BECKER ADVERTISING

Jack Basset began his own advertising agency in 1975, and his business grew steadily during the following years. A decade later, Jack formed a partnership with Bill Becker. Their agency's goal was to be the premier advertising agency in Columbus, Georgia. Their billings now exceed $2 million annually. Clients include the Columbus Regional Healthcare System, the Columbus area McDonald's restaurants, the banking firms, CB&T and Synovus; the growing information systems company, Total Systems Services (TSYS); and the agency's first client, Columbus Country's Barbecue.

The agency has seven associates. The two partners handle most of the account contacts and planning in addition to graphics work, writing, and communications work. They supervise the subcontract work such as video production and contract talent. The Art Director focuses on graphic design, printing, and negotiating subcontract work. She also supervises two other art associates. The traffic person manages media placement, 80% of which is computerized. Finally, the agency employs a bookkeeper.

Basset&Becker subscribe to a monthly software service so that they can buy media time better than any competitor. According to Jack Basset, they had to buy this plan to keep the Columbus McDonald's business. McDonald's reduced the number of its advertising agencies from 240 to 27 nationwide. Basset&Becker was retained. While Basset believes their use of information technology to be average on the national advertising scene, it is above average for the region. "We are doing the same things with computers that medium size agencies billing $30 to 50 million annually are doing."

Basset&Becker had handled the account for a major historic restoration project in Columbus: 1 Arsenal Place. This building had been restored and space was leased. Basset&Becker promoted this development, "back then we couldn't afford something like that. We had to grow some more." When the agency became a partnership and continued to grow, it began to look for distinctive yet affordable space. Rozier Dedwyider, then with Uptown Columbus, helped them look for deals. According to Mr. Basset, "Rozier is responsible for more buildings being saved than anyone else in Columbus." First they looked at houses in the historic district then an old bakery building and a fire station which still had its old terra cotta roof. They looked at the old Midland Railroad warehouse in 1991.

PROPERTY PRIOR TO RESTORATION

The Midland Railroad warehouse was on the demolition list prior to restoration. It had been condemned because storm damage had caused the structural integrity of the building to be questioned. The Bradley Company, which had been instrumental in restoring many historic properties in Columbus, had lost interest in the building when the downtown office market softened. The old warehouse had 16,000 square feet of space, with no interior walls. Old brick walls and heart-of-pine trusses supported the structure. Warehouse doors which slid back and forth on rollers to open and close warehouse bays remained in place. The dirt floor had been covered with cement. There was no plumbing and no electricity.

Standing in the middle of a train yard, the building is exposed to strong light and heat from both the east and west. It is located in downtown Columbus adjacent to a well-preserved older textiles plant and a beautifully restored train depot, used by Total Systems Services, Inc., for executive offices. The old warehouse is within minutes of the historic district and Chattahoochee River front, where other industrial properties had already been restored for commercial use. Extensive river front development is planned. Basset&Becker thought it was perfect.

TAX LAW REVIEW

As an incentive for modernizing and rehabilitation of existing buildings, Congress enacted the Revenue Act of 1978, which was modified by The Revenue Act of 1986 (Arnold, 1987). …

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