Preserving 

America

Historic Preservation and Heritage 

Tourism in Housing and Community 

Development: A Guide to Using 

Community Development Block Grant 

Funds for Historic Preservation and 

Heritage Tourism in Your Communities

 Community Development Block Grant Program
 Communities across America are searching for 

ways to improve their local economies, enhance their 

quality of life and revitalize their neighborhoods while 

preserving their cultural and natural heritage. Historic 

preservation and heritage tourism are two prominent 

economic and community development strategies to 

accomplish these objectives. This guide details how 

communities can utilize Community Development 

Block Grant funds (CDBG) to promote historic 

preservation and heritage tourism in their localities.

 In addition to providing this guidance, HUD would 

like our partners in community development to be 

aware of a new White House initiative that encourages 

communities to invest in historic preservation and 

heritage tourism. The Advisory Council on Historic 

Preservation has developed the Preserve America 

initiative to honor and award communities that are 

involved in successful historic preservation and 

heritage tourism projects. Under the Preserve America 

initiative, unveiled by First Lady Laura Bush in 

September of 2003, communities may seek Preserve 

America Community designation for their towns and 

cities and nominate outstanding preservation efforts 

for the new Preserve America Presidential Award.

 Background: Heritage tourism is an economic 

development tool designed to attract visitors to an area 

based on the unique aspects of the locality’s history, 

landscape and culture. This not only boosts regional 

and local pride but is also a good source of revenue for 

a community and creates jobs. Historic preservation is 

a tool for preserving a historic place, incubating small 

businesses, revitalizing downtowns, generating local 

jobs, and creating improvements in a community.

 Purpose: This guide will help state and local 

offi cials understand how historic preservation and 

heritage tourism projects can be accomplished through 

various eligible activities under the Community 

Development Block Grant program (CDBG). The 

CDBG program under the Housing and Community 

Development Act of 1974 (HCDA) provides resources 

and fl exibility to local offi cials for determining 

development in their communities. You will fi nd 

a description of eligible activities that can be used 

and important contact information. Also included 

are some real-life examples of successful historic 

preservation and heritage tourism projects.

A Guide to using Community Development 

Block Grant Funds for Historic Preservation 

and Heritage Tourism in your Communities

 All CDBG assisted historic preservation and 

heritage tourism activities must meet a national 

objective. The activity must benefi t low and 

moderate-income persons; prevent or eliminate 

slums or blight; or be designed to meet a community 

development need having an urgent need. Some 

examples include: The preservation of a commercial 

building that results in the creation of jobs where 

at least 51 percent are held by low and moderateincome persons; the preservation of a building 

used for a community center that serves residents 

in an area that is 51 percent low and moderate 

income; an entitlement community that has used 

historic preservation activities in a designated slum 

and blighted area or in a non-designated slum and 

blighted area that shows signs of decay (on a spot 

basis). The national objectives are outlined in 24 

CFR 570.208 for the Entitlement program and in 24 

CFR 570.483 in the State program. Both programs 

require that at least 70 percent of CDBG funds and 

Section 108 loan funds must be used to benefi t low 

and moderate-income persons. Each state may have 

additional requirements that Units of General Local 

Government must adhere to. 

Meeting a National Objective

1
General Plans include:

v Comprehensive plans and community 

development plans including preservation 

elements;

Eligible CDBG Activities which may 

support Historic Preservation and 

Heritage Tourism

 Historic preservation is a specifi c eligible activity 

under 24 CFR Part 570.202(d) where it states that 

preserving specifi c historic properties may be 

undertaken. However, there are a number of other 

eligible activities that can be used toward historic 

preservation and heritage tourism projects.

 Usually these activities include rehabilitation, 

preservation and selective restoration of publicly 

or privately owned properties. However, new 

construction of non-residential buildings, economic 

development assistance to for-profi t businesses, 

and energy conservation are also among eligible 

activities. 

 The following are eligible CDBG activities 

that may be used for historic preservation and 

heritage tourism projects and objectives, if all 

applicable program requirements are met. The 

Entitlement regulation and Housing and Community 

Development Act (HCDA) statutory citations are 

included for your convenience.

Planning 24 CFR 570.205 and HCDA Section 

105(a)(12)

 Community planning is an opportunity to 

develop goals and objectives and include strategies 

for preservation with plans to meet other purposes as 

well. This applies to soft costs such as engineering, 

design costs, preservation counseling, advisory 

services and inspections. Activities could also 

include the preparation of general development 

plans, and plans for particular functions, purposes 

or areas. Many communities have included historic 

preservation as a part of their general development 

plan. Likewise, heritage tourism may also be 

included as a goal or objective in the plan. 

v Functional plans for various purposes, 

including housing, land use, economic 

development, open space, and energy 

conservation, including historic preservation 

elements;

v Data collection, studies, analysis and the 

preparation of plans and implementing 

measures including budgets, codes and 

ordinances;

v Archeological surveys of CDBG project 

areas, including a reconnaissance survey of a 

project site containing valuable resources, or 

an intensive survey for fuller examination of 

signifi cant sites;

v Activities to enhance the community’s 

capacity for setting goals and objectives to 

meet needs, including environmental and 

preservation concerns;

v Reasonable costs of general environmental 

studies and historic preservation studies and 

resource surveys, including environmental 

review and compliance with Section 106 of 

the National Historic Preservation Act, where 

required by 24 CFR Part 58;

2
Historic Preservation Plans include:

v Preparation of a historic preservation plan 

for the community, including plans for 

preserving historic downtown areas or 

neighborhoods or for appropriate reuse of 

their historic structures;

v Delineating historic districts, including reuse 

plans and the preparation of ordinances and 

codes to assure preservation of the districts; 

and

v Developing strategies and action programs 

to protect and enhance the cultural 

environment.

Note: All of these activities may further heritage 

tourism goals. These activities may include 

measured drawings, photographs and other 

documentation of signifi cant architectural and 

historic data and of any building modifi cations or 

project mitigation. These may be prepared as part 

of a preservation program or in compliance with 

environmental review requirements. 

Historic Preservation 24 CFR 570.202(d) and 

HCDA Section 105(a)(1)(C)

 Publicly or privately owned historic property 

can be rehabilitated, preserved or restored, however 

not for the use of the general conduct of government. 

Historic properties are sites or structures that are 

either listed in or eligible to be listed in the National 

Register of Historic Places,(http://www.cr.nps.gov/nr/).

They can also be listed in a state or local inventory 

of historic places, or designated as a state or local 

landmark or historic district. 

Economic Development Activities 24 CFR 

570.203 and HCDA Sections 105(a)(1), (4), (14), 

(15), (17), (22)

 Economic development is a major objective in 

CDBG programs. Communities may fi nd effective 

ways to tie in preservation objectives with economic 

development. Rehabilitating an older structure creates 

job opportunities in the preservation stages of work 

and revitalizes an area and community. Heritage 

tourism may provide job opportunities and is a tool 

for strengthening regional identity and local pride. 

Eligible activities include:

v Acquisition, construction, reconstruction 

or installation of commercial or industrial 

buildings, structures, and other real property, 

equipment and improvements having historic 

value; and

v Assistance to private-for-profi t-businesses, 

including fi nancial and technical assistance 

and involving historic properties. 

Administrative Costs 24 CFR 570.206 and 

HCDA Section 105(a)(13)

v Costs of conducting preliminary surveys and 

analysis of market needs; and

v Costs of site and utility plans, narrative 

descriptions of proposed development or 

rehabilitation, preliminary cost estimates, 

urban design documentation, and “sketch 

drawings”, including preservation objectives 

and making proposals compatible with historic 

settings.

Engineering and Design Costs 24 CFR 

570.201, 570.202 and HCDA 

Sections 105(a)(2), (5)

v Feasibility studies to assess the condition 

of structures, including historic structures, 

and the economic feasibility of corrective 

techniques to overcome incompatible 

alterations or deterioration which detract from 

the historic character of structures; adapting 

historic buildings to appropriate reuse;

v Designing improvements to the façade of 

structures, including historic buildings and 

schematic drawings;

Eligible CDBG Activities which may 

support Historic Preservation and 

Heritage Tourism

3
v Design costs for integrating historic façades 

into new structures and land uses, with the 

advice of the state historic preservation offi ce 

or local historic commission or advisory 

body;

v Designing the removal of architectural 

barriers in structures which limit access for 

elderly or handicapped persons; and 

v Other engineering and design needed to 

preserve historic properties and develop 

heritage tourism.

 Note: Engineering and design activities 

and costs are considered project costs, not 

general planning or administrative costs.

Acquisition 24 CFR 570.201 and HCDA Section 

105(a)(2)

v Acquisition of properties, including historic 

properties, in whole or in part by a public 

agency or private not-for-profi t entity;

v Acquisition by purchase, lease, donation, 

or otherwise, of real property (including 

air rights, water rights, rights-of-way, 

easements, façade easements and other 

interests);

v Acquisition of buildings and improvements 

and their relocation to other sites.

Clearance Activities 24 CFR 570.201(d) and 

HCDA Sections 105(a)(4), (25)

v Moving a historic structure from a project 

site or other site to a location appropriate for 

its preservation; and

v Clearing incompatible structures from a 

historic site to highlight historic values or to 

provide for compatible new development.

Site Preparation 24 CFR 570.201 and HCDA 

Sections 105(a)(2), (4)

v Construction, reconstruction or installation 

of public improvements, utilities, or 

facilities (other than buildings) related to the 

redevelopment or reuse of real property that 

was acquired by CDBG funds;

v Making improvements necessary to restore a 

property’s architectural or historic character.

Property Rehabilitation 24 CFR 570.202 and 

HCDA Sections 105(a)(4), (25)

 Rehabilitation constitutes a major area of 

opportunity for including historic preservation in 

programs designed to revitalize neighborhood and 

commercial areas and for encouraging private sector 

involvement in community development and property 

rehabilitation activities. Eligible activities include the 

rehabilitation of:

v Eligible privately owned residential buildings 

and improvements limited to façade, such as 

commercial buildings in a downtown and code 

requirements of non-residential buildings;

v Public housing and other publicly owned 

residential buildings and improvements;

v Publicly owned nonresidential buildings 

and improvements otherwise eligible for 

assistance;

v Activities to secure the retention and reuse 

of historic structures, such as renovation of 

closed school buildings for conversion to 

housing or public facility.

v Energy system improvements or retrofi tting, 

e.g., to enhance the use and preservation of 

historic structures; and

v Obtaining or conducting rehabilitation 

advisory services, such as rehabilitation 

Eligible CDBG Activities which may 

support Historic Preservation and 

Heritage Tourism

4
counseling, energy auditing, preparation of 

work specifi cations, inspections, and other 

advisory services to owners, tenants, 

Property Disposition 24 CFR 570.201(b) and 

HCDA Section 105(a)(7)

v Sale, lease, donation, or otherwise, of any 

real property acquired with CDBG funds, 

including arrangements and restrictions to 

preserve historic properties or to provide for 

appropriate reuse of historic property.

Code Enforcement 24 CFR 570.202(c) and 

HCDA Section 105(a)(3)

v In deteriorated areas, code enforcement 

can stop the decline of an area that is in the 

process of being rehabilitated.

Public Facilities and Improvements 24 CFR 

570.201(c) and HCDA Section 105(a)(2)

v Acquisition, construction, reconstruction, 

rehabilitation or installation of eligible public 

facilities and improvements, as in historic 

districts or neighborhoods;

v Design features and improvements which 

promote energy effi ciency; and

v Execution of architectural design features to 

enhance or preserve the aesthetic quality of 

facilities and improvements receiving CDBG 

assistance, such as decorative pavements, 

railings, sculptures, pools of water and 

fountains, and other works of art (excluding 

furniture and furnishings within buildings).

Removal of Architectural Barriers 24 CFR 

570.201(k) and HCDA Section 105(a)(5)

v Removing material and architectural barriers 

that restrict the mobility and accessibility of 

elderly or handicapped persons to publicly 

owned or privately owned buildings, 

facilities, and improvements.

Eligible CDBG Activities which may 

support Historic Preservation and 

Heritage Tourism

Privately owned Utilities 24 CFR 570.201(l) and 

HCDA Section 105(a)(2)

v Use of CDBG funds to acquire, construct, 

reconstruct, rehabilitate, or install the 

distribution lines and facilities of privately 

owned utilities, including the placing 

underground of new and existing distribution 

facilities and lines, as in a historic district.

Activities by Community-Based 

Development Organizations 24 CFR 

570.204(c) and HCDA Section 105(a)(15) 

v Recipients may grant or loan CDBG funds 

to subrecipients for any eligible activities 

including eligible historic preservation and 

heritage tourism activities. This could include 

neighborhood-based nonprofi t organizations, 

small business investment companies or 

local development corporations used to carry 

out neighborhood revitalization projects, 

community economic development or energy 

conservation projects. Additionally, under the 

State CDBG program, the subrecipient may 

also be any non-profi t organization and would 

be eligible under Section 105(a)(15). 

Technical Assistance 24 CFR 570.201(p) and 

HCDA Section 105(a)(19)

v Obtaining or providing technical assistance 

to public or non-profi t entities for planning, 

developing and administering historic 

preservation activities;

v Conducting local education and information 

programs concerning historic preservation, 

including encouragement of private initiatives 

through private investment and the use of 

available tax incentives and other resources;

v Conducting workshops on preservation, such 

as façade treatment of historic storefronts 

or seminars on historic district design for 

local merchants, architects, planners and 

community organizations; and

5
v Training conferences for municipal 

and community leaders that encourage 

preservation strategies and techniques for 

implementing them.

Consultant Services 24 CFR 570.200(d)

v Obtaining professional assistance for 

program planning, and preparing community 

development objectives, including historic 

preservation, and securing other general 

professional guidance for devising programs 

and methods or schedules for implementing 

them, including preservation elements. 

Please note, unless consultant costs are under 

planning, they are considered project costs.

Payment of the non-Federal share required 

in connection with a Federal grant-in-aid 

program 24 CFR 570.201(g) and HCDA Section 

105(a)(9)

v CDBG funds may be used for the payment 

of the non-Federal share required for Federal 

grant-in-aid programs, provided the activities 

are part of eligible CDBG activities. For 

example, CDBG funds may be used to 

make up the local matching requirement 

of the Department of the Interior’s historic 

preservation grant program. 

Eligible CDBG Activities which may 

support Historic Preservation and 

Heritage Tourism

Tax Incentives: Approximately 45 states and 

many local governments offer property tax incentive 

programs for the rehabilitation of historic properties. 

These programs foster reinvestment, job creation, 

and income generation. Currently thirty-four state 

programs offer real property tax relief. The most 

common of these programs exempts property owners 

from being taxed for a specifi c period of time 

based on the building’s increased value due to the 

rehabilitation work done on the historic property. 

Additionally, other states administer state income 

tax-based incentives for historic rehabilitation.

Economic and Community Benefi ts: 

Investment in historic preservation and heritage 

tourism has produced numerous economic and 

community benefi ts for localities. Communities 

have used historic preservation and heritage tourism 

as an economic development strategy towards 

job creation, creating new business, for private 

investment and have seen their property values 

increase. Rehabilitating historic properties also 

creates jobs in the construction, manufacturing, 

transportation, utilities, retail and services industries. 

These areas often see a corresponding increase in 

household income and spending, which further 

strengthens the local economy. 

These benefi ts directly impact local economies while 

aiding the physical transformation of downtowns, 

reducing urban and rural sprawl, and creating 

destinations for tourists and local residents alike. 

Additionally, the rehabilitation of historic properties 

has also helped increase supply of affordable 

housing, which is in great demand in many 

communities. 

Incentives for using Historic Preservation and 

Heritage Tourism

6
city set up a $50,000 matching 

fund for a façade improvement 

program to encourage the 

private sector investment for 

the restoration and preservation 

of the city’s historic district. 

As a result, seven local banks 

matched the city’s commitment 

and set up a $637,000 low 

interest loan pool to encourage 

further private investment 

in façade restoration. The 

ripple effects of these CDBG 

activities include other projects 

led by citizen volunteers, 

such as an inventory of the local 

historic cemetery resulting in the 

city’s fi rst historic Texas cemetery designation. It is 

estimated that over $25,000 worth of volunteer hours 

were contributed in 2002 and 2003. 

 In 2002 and 2003, Pharr Main Street produced 

over $3.2 million in public and private investments, 

21 business starts, and a net gain of 50 jobs. The 

historic district also experienced the return of key civic 

assets such as City Hall and the public library. Pharr 

continues to invest in its built environment, image and 

future by revitalizing its core, thus attracting heritage 

tourists and generating revenue for the city. Recently, 

Pharr joined the Los Camino Del Rio Heritage Trail 

becoming a stop and destination along this heritage 

corridor, which highlights the common heritage along 

the Texas-Mexico borderlands. As a result of Pharr’s 

innovative efforts in preservation and revitalization 

the city was honored with the 2004 Texas Main Street 

City designation. The State of Texas First Lady, Mrs. 

Anita Perry, kicked off this designation at a special 

ceremony in Pharr on March 30, 2004. In May 2004, 

the City of Pharr was designated a National Preserve 

America Community through the White House’s 

Preserve America initiative. The city is the fi rst Border 

community in the nation to receive this honor for their 

work in preservation and revitalization. Contact: Pharr 

Main Street Offi ce at (956) 702-5335, ext 137.

Success Stories of Communities with 

Heritage Tourism and Historic Preservation projects:

Pharr, Texas

 Pharr, Texas, a CDBG 

entitlement city, utilized CDBG 

money to fund several main street 

projects to encourage renewal 

in their town. The goal of Main 

Street Pharr was to revitalize Park 

Avenue, Pharr’s main street, through 

the promotion of heritage tourism 

to stimulate the local economy. 

The planning stages took about 

3 years and included innovative 

initiatives such as setting up a 

preservation ordinance and a local 

historical commission, performing 

a windshield survey of the town’s 

historical district, and completing a 

$7,500 “festival infrastructure” project 

along Park Avenue. These efforts were designed to aid 

the transformation of Main Street Pharr into a festival 

destination. The infrastructure, partly funded by a 

$2,500 grant from the Anice Read Fund, included an 

electrical and lighting system, banners, meter, boxes, 

banner brackets, and fl ood light poles. 

 The city also completed an oral history project that 

documented its rich heritage and was instrumental 

in securing a landmark designation from the Texas 

Historical Commission for display at City Hall. 

CDBG funds were also used for operating expenses 

to support the city’s Main Street Program and for a 

promotions budget to install banners for display within 

the historical district.

 On-going projects also include conducting the city’s 

fi rst preservation master plan. This policy document 

and vision statement from the community was the 

fi rst of its kind among the 46 cities and towns in the 

Lower Rio Grande Valley. In addition, CDBG funding 

is being used to conduct a restoration plan for the 

city’s fi rst fi re station. The latter has included asbestos 

testing and removal, performing a structural study 

and a fl oor plan sketch. The restoration plan will also 

include an architectural rendering and plan of action 

to restore the structure’s exterior, interior and original 

landscaping features. In addition to these efforts, the 

This building is the sight that will become the 

Rio Grande Valley Food Bank in Pharr, Texas.

This rendering illustratres the proposed 

Rio Grande Valley Food Bank in Pharr, Texas.

7
The Kissimmee Community Redevelopment 

Agency, in Kissimmee, Florida, received two State 

CDBG grants for historic preservation projects 

to upgrade the downtown area over a span of six 

years. The fi rst project used $750,000 of CDBG 

funding towards developing a fi ve-block streetscape 

downtown. Three years later a second CDBG 

grant in the amount of $750,000 was used towards 

completing the streetscape project. The project 

involved improvements to the parking lot, lighting, 

signage and making the area more pedestrian 

friendly by adding sidewalks from the historic 

courthouse to the downtown. Another goal was 

bringing the oldest buildings, which were built 

between 1906 and 1926, up to code and making 

them accessible to the disabled. Business owners 

were offered $30,000 toward this goal if each 

contributed 10 percent of the cost. The owners 

had to either occupy the building or have a retail 

tenant on the fi rst fl oor. The fi nal results include 

eleven completed storefronts renovations and façade 

improvements, construction of bathrooms, and 

improved site accessibility. These improvements 

have created a surge of interest from businesses 

and residents wanting to live in the downtown area. 

Contact: Kissimmee Community Redevelopment 

Agency at (407) 518-2544, www.kissimmeecra.com.

 Kissimmee, Florida

This project involved improvements to the parking lot, 

lighting, signage and making the area more pedestrian friendly 

by adding sidewalks from the historic courthouse to the 

downtown. 

Toho Square along with these other improvement projects 

have created a surge of interest from businesses and residents 

wanting to live in downtown Kissimmee.

Another goal was bringing the oldest buildings, which were 

built between 1906 and 1926, up to code and making them 

accessible to the disabled. 

8
Main Street Galion in Galion, Ohio has used State 

CDBG money to leverage 10 million dollars of 

funding from public and private sources to revitalize 

their “historic uptown” area, which had fallen into 

decline due to plant closures. Projects included 

façade work, rehabilitation and infrastructure 

improvements. Additionally, the main square 

was restored and an historic walking tour was 

developed to promote Galion as a tourist destination. 

Businesses have returned to the district helping to 

generate more revenue for the city and providing 

needed services to residents and tourists. Main 

Street Galion redevelopment initiatives include 

the rehabilitated historic theater, which originally 

opened in 1949 as an art-deco movie theater and 

boasts to having the only original intact neon 

marquee in Ohio. Also, a historic hotel on main 

street will be converted into a senior citizen 

residence, which will further increase the population 

in the historic area. Contact: Main Street Galion at 

(419) 468-4812 ext 204, www.galionohio.com. 

 Galion, Ohio

The rehabilitated historic theater, which originally 

opened in 1949 as an art-deco movie theater and boasts 

to having the only original intact neon marquee in Ohio.

This historic hotel on main street will be converted into a senior 

citizen residence, which will further increase the population in 

the historic area. 

9
Eligible Activity: State Program: 

HCDA 105(a)

Entitlement Regulations: 

 24 CFR 570.201-.206 

Acquisition of Real Property 105(a)(2) 570.201(a)

Public Facilities and Improvements 105(a)(2) 570.201(c)

Code Enforcement 105(a)(3) 570.202(c)

Clearance 105(a)(4), (25) 570.201(d)

Rehab 105(a)(4), (25) 570.202(a)(b)(d)(e)(f)

Reconstruction 105(a)(4), (25) 570.202

Construction of Buildings (Housing 

incl.) 105(a)(4), (25) 570.201(m)

Architectural Barrier Removal 105(a)(5) 570.208(a)(2)(ii)

Property Disposition 105(a)(7) 570.201(b)

Payment of Non-Federal Share 105(a)(9) 570.201(g)

Planning and Capacity Building 105(a)(12) 570.200(g), 570.205

Program Administration Costs 105(a)(13) 570.206

Activities carried out by 

Community-Based Development 

Organizations

105(a)(15) 570.204(c)

Economic Development Assistance 

to For-Profi t Business 105(a)(17) 570.203(b)

Technical Assistance 105(a)(19) 570.201(p)

Historic Preservation 105(a)(1)(C) 570.202(d)

Economic Development Activities 105(a)(1), (4), (14), (15), (17), (25)

Engineering and Design Costs 105(a)(2), (5) 570.201, 570.202

Site Preparation 105(a)(2), (4) 570.201

Privately Owned Utilities 105(a)(2) 570.201(l)

Consultant Services None 570.200(d)

Payment of the non-Federal share for 

a Federal grant-in-aid program 105(a)(9) 570.201(g)

Eligible CDBG Activities that can be used for Historic 

Preservation and Heritage Tourism projects

10
1. National Trust for Historic Preservation 

 http://www.nationaltrust.org/index.html

2. Main Street National Trust for Historic Preservation 

 http://www.mainstreet.org/

3. National Register of Historic Places 

 http://www.cr.nps.gov/nr/

4. Preserve America 

 http://www.preserveamerica.gov

5. State and Entitlement CDBG contacts: 

 http://www.hud.gov/offices/cpd/communitydevelopment/programs/

 contacts/index.cfm

6. Preservation Directory 

 http://www.preservationdirectory.com/

7. Heritage Preservation 

 http://www.heritagepreservation.org/

Resources and Links:

 If you have questions about this publication, 

please call your local HUD field office. 

www.hud.gov HUD-2004-09-CPD espanol.hud.gov