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As Word Spreads, Clamor to Donate Grows

By Joe Stephens
Washington Post Staff Writer
Monday, December 13, 2004; Page A10

Two years ago, the doorbell rang at Jennifer Litwin's $3 million French Renaissance townhouse, just steps from Lake Michigan on Chicago's Gold Coast. On the stoop was Andrew Fisher, an executive from the nonprofit Landmarks Preservation Council of Illinois.

Fisher offered to show Litwin how she and others in the neighborhood could save a small fortune, she recalled, and she offered to hear him out.

_____Rich With History_____
facade thumbnail Interactive: How historic easements work and who profits from them.
Graphic: The number of property owners applying to have their home or commercial building certified as contributing to a designated historical district has increased dramatically.
Map: Washington is the nation's leading city for historic facade easements, with easements protecting about 960 properties, many clustered in upscale neighborhoods.
Loophole Pays Off on Upscale Buildings (The Washington Post, Dec 12, 2004)
Tax Break Turns Into Big Business (The Washington Post, Dec 13, 2004)
Panel Advises Ending Tax Breaks for Easements (The Washington Post, Jan 28, 2005)
Group Ends Pitches for Home Easements (The Washington Post, Jan 12, 2005)
Senators Vow to End Tax Break on Easements (The Washington Post, Dec 18, 2004)

"None of my neighbors did it because they were suspicious," Litwin said. "My husband thought I had just lost my mind."

Eventually, Litwin and her husband agreed to give the council $30,000, she said. They also gave the council a historic facade easement on their home, in which they promised not to change the outward appearance of their townhouse without first seeking approval from the council.

That, Litwin said, allowed the couple to claim a federal income tax write-off totaling $300,000.

News of the donation helped set off a land rush in Illinois, one that continues to this day and which mirrors a boom in easement donations that began in Washington and New York. Between 1997 and 2001, no one from Illinois applied to the National Park Service seeking to certify a home as historic for a charitable donation. That changed in 2002, when 118 Illinois property owners received certification, followed by 155 last year, according to federal data analyzed by The Washington Post.

Litwin is married to Stuart Litwin, a well-known Chicago lawyer. She said the Preservation Council used them to promote its nascent effort to attract donations. If a partner in an international law firm thought the arrangement passed muster, Litwin explained, others would follow.

"When people realized this wasn't a scam, they started doing it," Litwin recalled, estimating that she has received 50 calls from other homeowners whom Fisher had approached. The subsequent surge in donations, she said, "was all his doing."

Preservation Council President David Bahlman said that, unlike some "easement mills" elsewhere, "our goal is to preserve properties, not to make big salaries."

Even so, IRS records show that as the donations flowed in, Fisher's pay also leapt -- from $51,000 in fiscal 2001 to $244,000 in 2002.

"He works on a bonus system," Bahlman said of the former insurance salesman. "He works 18 hours a day. He is actually driven to get the word out about preservation easements."

Reached by telephone at his Chicago office, Fisher said he does not talk to reporters and hung up.

Fisher built his success, however, by seeking out reporters in Chicago for promotional articles, Litwin said. One article cited an unnamed donor who had placed an easement on his $11 million house and claimed a tax deduction of $1.75 million. In 2003 alone, Fisher's program generated tax breaks totaling $70 million, another laudatory article said.

Chewing-gum heir William Wrigley Jr. and Sears Chief Executive Alan J. Lacy donated easements on their Lake Forest homes, Bahlman said.

Many Chicago suburbs have "horrible" preservation statutes, he said. Chicago's laws are better, he added, but are open to manipulation by politicians and their friends. Easements donated to the Preservation Council may cover just the front of a building or all sides, he explained, and the average home in its program is worth well over $1 million.

"It is an extraordinarily important tool for preservation organizations," Bahlman said.

Litwin said of her decision to enter the program, "It was a no-brainer. My goodness, what better tax savings could you get?"

© 2004 The Washington Post Company