Historic Preservation Expert Warns Developers That Late Starts Jeopardize Tax Credit Eligibility

Written by:

Rudi Davis

Date:

24 Nov 2025

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Historic preservation developers are making a critical error that’s costing them time, money, and project viability, according to one industry expert who has processed over $1.3 billion in historic tax credit projects.

Michael Puma, Principal and Project Manager at Preservation Studios, says the most frequent mistake he encounters is developers engaging preservation consultants too late in the development process. “The most common mistake is coming into it too late into the process,” Puma explains. “We always tell our clients, you know, get us engaged as early as possible, before you even purchase this place.”

According to Puma, whose firm has handled approximately 60% of New York State’s historic tax credit projects over the past decade, the timing problem stems from developers’ misunderstanding of the approval process and regulatory requirements.

Puma argues that developers need to secure the longest possible due diligence periods to accommodate the approval timelines that historic tax credit applications require. “Try to get the longest due diligence period you can because that will afford us the opportunity to deal with the approval turnaround timelines that these applications take, so you can be as certain as possible at the time you get to that closing table, that you’ve got a viable project here that’s going to come through the program.”

The consequences of late engagement can be severe. Puma describes projects that have come to his firm at various stages of completion—some 25% to 50% complete, others just weeks away from receiving their certificate of occupancy. “I’ve had a few that have been weeks away from getting their certificate of occupancy. We’re talking like 95% done,” he says.

While some of these late-stage projects have been successful, Puma notes they require “creative maneuvering” and come with significantly less certainty of approval.

Even when developers engage early, Puma says another common failure point occurs during construction. “The best laid plans that we have as a team to make sure that these places are retaining their historic features, those mostly go awry during the demolition phase,” he observes.

According to Puma, communication breakdowns between development teams and demolition crews frequently result in historic features being “ripped out and thrown out” when they were supposed to be salvaged or retained. This forces developers into more expensive scenarios where they must replicate features rather than restore originals.

Puma’s observations come at a time when the historic preservation industry is evolving. “The obvious ones have been done or their way, and we’ve kind of moved on to the second tier of that, where it’s like, maybe this one is possible. We have to be a little bit more creative,” he explains.

This shift toward more challenging projects makes early engagement even more critical, according to Puma. Unlike the “plug and play” approach that worked for first-tier buildings, second-tier projects require more sophisticated planning to align development goals with preservation standards.

Puma describes his firm’s approach as “a two prong” strategy: first, making the case for a building’s historic significance, and second, “working with the owner team to ensure that what they want to do to the building is going to be appropriate, because it’s not going to be beneficial if you have a designated historic building, but you’re trying to put a round peg in a square hole with your design plans.”

The timing and communication issues Puma identifies may be contributing to persistent misconceptions about the historic tax credit program. However, he notes positive changes in how regulatory agencies approach the process.

“I am seeing that. I’m seeing the National Park Service move on that a little bit,” Puma says, referring to evolving standards and increased agency engagement with developers. “They’ve been more and more engaging. When I first started in this industry, you didn’t really have the opportunity to engage directly with National Park Service.”

Preservation Studios has developed systems to address these common pitfalls, including comprehensive due diligence processes that occur before property acquisition and detailed coordination protocols during construction phases.

Whether other firms adopt similar early-engagement approaches may determine how successfully the industry navigates the transition from obvious first-tier projects to the more complex second-tier opportunities that now define the market.