Yet another news item from my local paper caught my attention yesterday, and this one is literally right up the street. The former world headquarters of the Hoover Company, located right on the square in North Canton, Ohio, has petitioned to be listed on the National Register of Historic Places. The former factory has been shut down for several years, and all of the manufacturing that once took place there now happens in places like Mexico and China. Only the buildings remains, and they were purchased by a group of investors who wish to transform the complex into a multiple use facility. Now you may think that I would be all for this sort of creative reuse thing, and generally speaking I usually do favor such projects. But this time, I’ve got some problems with it.
If you don’t know, The Hoover Company once made leather harnesses at its factory in the center of the little village of New Berlin, just up the road from Canton. In the early years of the 20th century, as the automobile began to replace the horse, “Boss” Hoover bought the patent for a suction sweeper device that had been invented and produced by a local custodial worker. New Berlin changed its name to North Canton during World War I, and Hoover abandoned the harness industry in favor of vacuum cleaners, and built a highly successful business around it. For years the business flourished and the Hoover family became benefactors to the surrounding city. Eventually the business was sold to outside interests, and finally, like many American manufacturers, the jobs were sent overseas where wages are lower and environmental concerns more lax.
Now when I think of buildings listed on the National Register, I think of places steeped in history, like Independence Hall in Philadelphia, or architectural gems like the Chrysler Building in New York City, both of which are buildings worthy of preservation. The Hoover Company buildings are a group of structures of various styles, none of which are particularly attractive or even interesting. The part of the buildings that face the town square are very basic mill type factory construction, and were abandoned for production purposes by the Hoover Company long before they stopped making vacuums at the plant because the space was old and obsolete. The developer has shown sketches that show the front façade being transformed into an almost unrecognizable group of shops, restaurants and apartments. The rear of the building, once very good quality manufacturing space, has already been converted to office and classroom space. The former world headquarters office building sits mostly unused, because it cannot easily be converted to office space that would be desired by the market. So much for saving the buildings for the sake of historic preservation.
In truth, the buildings don’t even really belong in the center of the city. Ask any urban planner and they would tell you that factories should be located well away from residential areas and retail centers. But the city grew around the factory, and they both benefited, so there they sit. If the site were a vacant piece of land, it would be desirable for many uses, but not a factory. In fact, if the site were vacant land, it would be worth far more than what the current owners paid for it in 2008 (with all of the buildings on it). You may think that I’m crazy for saying such a thing. It does seem to defy rationality, but trust me; in this case I know what I’m talking about. I’ll get back to that issue in a minute.
The mayor sent a letter of support along with the application. He justified his support of the site’s historical status by citing the iconic smokestack and how the building is North Canton’s most recognizable landmark. Of course, it’s the biggest building in the city, and does sit right in the middle, making it rather difficult to overlook. He also included little tidbits of information like the fact that in England vacuuming the carpet is referred to “hoovering” the carpet, which lends further support to the company’s historical significance. Here in North Canton, former home of the Hoover Company, we refer to vacuuming the carpet as “vacuuming the carpet.” Guess we’re not as clever as those Brits.
So why are these real estate developers really so keen on getting this complex on the National Register? Have you guessed yet? Let’s see, what is the one thing that motivates real estate developers above all else? If you said “creating a lasting legacy through construction of architecturally significant structures” then you’re a bit more idealistic than is safe in today’s society. The answer is simple: money. Being on the register doesn’t prevent them from changing the looks of the building, but it does allow them to qualify for a tax credit equal to 20% of the rehabilitation costs. There’s also a state tax credit available. Now rehabilitation costs are already an allowable tax deduction. They are a normal cost of doing business. But tax credits are applied to all income tax owed. They come right off of the bottom line and are way better than simple tax deductions.
So what we are doing here is allowing millionaire real estate developers to pay less taxes, right after we increased taxes on wealthier Americans. This was done because we needed more revenue to cover our nation’s growing expenses. It was a smart thing to do, and we have witnessed improving economic conditions since the new tax rates took effect. Giving this group of people lower taxes also decreases their cost of doing business and gives them an unfair advantage in the market for commercial space. Other millionaire real estate developers that don’t have this advantage have to charge more for people to rent space from them. Doesn’t really seem fair to me.
Let’s get back to the question of the underlying land. Right up Main Street from the Hoover Company, there used to be a delightful little root beer stand. It was painted bright orange and had cute carhops that delivered delicious food and sweet root beer floats to diners in their cars. It was a much more pleasing slice of Americana than the ugly factory down the street. But several years ago, when drug stores were transforming the way that they do business, one of them decided that the corner where the root beer stand sat would make a great location for their drug store. They bought the site, tore down the root beer stand, and then built a drug store that looked just like a hundred other similar ones. The site was worth more as vacant land than it was as a root beer stand. In a side note, a little while later the drug store chain realized that they had over-expanded their operations, and filed for bankruptcy. The drug store was abandoned, then was sublet for use as a dollar store, which pays much lower rent.
So if the land is worth more without the factory buildings, why don’t they just tear them down and start over, like they did with the root beer stand? For one thing, it is very expensive to tear down old factories. They’re full of things like asbestos, which must be disposed of properly (and expensively). Also, when you tear down a factory building, environmental tests must be performed on the site, and any problems must be remedied before anything can be built on the site. So any problems caused by things that had seeped into the ground (tanning solutions, PCBs, oil, grease, solvents, etc.) over the many decades that the site had been used for industrial purposes would have to dug out, properly disposed of, and replaced. That’s really expensive. So instead we “creatively reuse” the site, and keep its secrets buried in place. We creatively reward the entrepreneurs that undertake the task by allowing them to buy the property for very little money, then give them tax money in forms of grants, low interest loans, and other incentives, and finish it all off with huge tax credits. Is this any way to do business, or run a government for that matter?
At this point you’re probably guessing that I’m some kind of Marxist pinko, out to destroy big business and the American way. I’m not. The fact is we need real estate developers because we all need someplace to live and shop. Houses and apartments are better places than caves, and it’s much easier to gather food at the supermarket than get your buddies together and hunt down a buffalo. I’ve known the local partner in the Hoover deal most of my life. He’s not a bad man. I’ve had dinner with him and I stopped to talk with him only a few weeks ago. He thinks of developing real estate as something fun to do, and it’s important to him that he’s still having fun. I’ve also spoken with the California partner in the deal and he seemed very personable as well. Someone has to take the risk, and these guys are willing to do it. Risk must also be rewarded. But we don’t need to overcompensate. A nice piece of pie is just fine; we don’t need to cover it with ice cream, add a dollop of whipped cream, and then plop a big juicy cherry on top.
So did anything historically significant really happen at the Hoover Company site that warrants its inclusion on the National Register of Historic Places? The vacuum cleaner wasn’t invented there. It was just another factory. True, they did produce desirable, good-quality products, some of which continue to function as they were designed to more than fifty years after they were made. That would be newsworthy these days, but the history of our country is full of companies that did the same thing. But this really doesn’t have anything to do with history, unless you mean the history of greedy people taking advantage of a system that they designed so they could have a bigger piece of the pie than anyone else gets, all while claiming to be protectors of our great heritage. And that’s not really newsworthy because greed happens all of the time and we are being lied to every day. There are far better things that we could be doing with our tax dollars than using them to put a cherry on the top of an already lucrative real estate deal.
The former Hoover Company plant, located on the square in North Canton, Ohio
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