Section 111 Leasing and Exchange Questions and Answers
Introduction: Lease and Exchange of Historic Properties under Section 111 of the National Historic Preservation Act
In 2021, the Advisory Council on Historic Preservation (ACHP) developed the Leveraging Federal Historic Buildings Final Report to assess the status of federal outleasing for historic properties and to advance utilization of the nation’s historic federal buildings. Through that report, the ACHP recognized that agencies would benefit from more information about Section 111 of the National Historic Preservation Act (NHPA; 54 U.S.C. §306121) and specifically, its authorization for the lease or exchange of historic properties.
These FAQs are intended to help federal agencies better understand how to communicate with the ACHP and fulfill the requirements of Section 111. It also describes how an agency can coordinate a proposed Section 111 lease or exchange with its Section 106 responsibilities. This information is directed to federal agencies but may also assist stakeholders, such as State Historic Preservation Officers (SHPOs), Tribal Historic Preservation Officers (THPOs), and other consulting parties, in understanding and participating in federal leasing or exchange decision making. At this point, the guidance does not specifically address issues relating to land leases, which may be addressed in future updates.
We invite you to send feedback on these FAQs, recommendations on additional topics that should be considered, and examples of successful Section 111 outcomes to achp@achp.gov.
Frequently Asked Questions: Section 111 Leasing and Exchange
What is a Section 111 lease or exchange?
Section 111 of the NHPA authorizes federal agencies, after consultation with the ACHP, to lease historic property owned by the agency to any person or organization, or exchange any property owned by the agency with comparable historic property, if the agency head determines that the lease or exchange will adequately ensure the preservation of the historic property (54 U.S.C. §306121(a)(2)). “Historic property” means any pre-historic or historic district, site, building, structure, or object included in or been determined eligible for inclusion in the National Register of Historic Places (NRHP) maintained by the Secretary of the Interior (36 CFR §800.16(l)).
Importantly, Section 111 incentivizes agencies to pursue the reuse of historic property by allowing the agency to retain the proceeds of this type of lease and use those proceeds to defray the costs of administration, maintenance, repair, and related expenses incurred by the agency with respect to that property or other property that is listed on the National Register of Historic Places that is owned or controlled by, or under the jurisdiction of the agency (54 U.S.C. §306121(b)).
What consultation does Section 111 require?
The NHPA requires the federal agency to consult with the ACHP prior to making a decision to lease or exchange a historic property under Section 111. Regardless whether the agency intends to enter into a single lease or exchange, or establish a program of leasing historic buildings, the agency should consult the ACHP prior to making any decision that commits it to a course of action.
The agency head (or another agency official appropriately delegated responsibility for this action from the agency head) should invite the ACHP to consult via email at e106@achp.gov, addressing the invitation to the ACHP Executive Director. The agency should include in the invitation information regarding the historic property to be leased or exchanged, the terms of the proposed lease or exchange action, and how the proposed lease or exchange would “adequately ensure preservation of the historic property.” Note, after consultation with the ACHP, the agency head makes the final determination whether the lease or exchange would adequately ensure preservation of the historic property and should maintain that determination in the administrative record.
If an agency anticipates multiple Section 111 leases or exchanges, such as for a district of historic properties, a program level consultation is advised. Then, the agency should invite the ACHP to consult early in development of that leasing or exchange program. In any case, the agency should invite the ACHP to consult as early as possible in developing the request for qualifications and/or proposals and the lease or exchange agreement. Early consultation will help ensure appropriate preservation input into the request for qualifications or proposals.
How does an agency official determine the Section 111 lease or exchange will “adequately ensure preservation of the historic property”?
The head of the federal agency proposing the lease or exchange is responsible for determining whether the activity will “adequately ensure preservation of the historic property.” This determination should be informed by the agency’s consultation with the ACHP and refer to both the property’s qualifying characteristics and the specific provisions of the proposed lease or exchange agreement to maintain those elements.
Generally, requiring that the treatment of the historic property follow the Secretary of the Interior’s Standards for the Treatment of Historic Properties (SOI Standards, 36 CFR Part 68) meets the threshold for adequately ensuring the preservation of the historic property. However, in certain cases, management of the historic property may not meet the SOI Standards and may therefore constitute an adverse effect. If the treatment ensures that the historic property retains sufficient integrity to remain eligible for, or listed on the NRHP, as determined by the agency head in consultation with SHPO/THPO, and/or the Keeper of the NRHP as appropriate, the lease may still meet the requirements of Section 111.
Can a federal agency exchange a nonhistoric property for a historic property under Section 111?
Yes, a federal agency can exchange a nonhistoric federal property for a historic nonfederal property if the exchange would ensure the continued preservation of the (nonfederal) historic property or if the exchange would complement the preservation or interpretation of other federal historic properties. Section 111 allows exchange with nonfederal parties and exchange of a nonhistoric federal property for a historic private one.
What happens to the federal agency's proceeds from the lease?
Notwithstanding any other provision of law, the proceeds of a lease may be retained by the agency entering into the lease and used to defray the costs of administration, maintenance, repair, and related expenses incurred by the agency with respect to that property or other property that is listed on the NRHP that is owned by, or under the jurisdiction or control of, the agency. The federal agency must use the funds within two fiscal years of the fiscal year in which the proceeds are received. Otherwise, any surplus proceeds from the leases shall be deposited in the U.S. Treasury at the end of the second fiscal year.
Section 106 Considerations for Section 111 Leases and Exchanges
Is leasing or exchanging federal property under Section 111 considered an undertaking subject to Section 106 review?
Most likely. Section 106 review is required when a federal agency proposes to carry out, license, permit, or fund an undertaking that has the potential to affect historic properties. In most cases, the lease or exchange of a federal property would require Section 106 review.
Can an agency meet its consultation requirements under Sections 106 and 111 concurrently?
Under Section 106, an agency must notify the ACHP of a proposed undertaking that has the potential to adversely affect a historic property (36 CFR §800.6(a)(1)). The requirement to consult the ACHP under Section 106 is a separate requirement than the consultation requirement under Section 111. However, an agency may combine its consultation with the ACHP under Sections 106 and 111 provided the agency gives the ACHP sufficient information to understand the request to consult and coordinates the timing of its Section 111 considerations with the steps of its Section 106 review. While this may result in an agency requesting ACHP consultation prior to making a finding of adverse effect, such coordination could help the agency better manage the requirements of both sections of the NHPA.
If a proposed Section 111 lease or exchange may pose an adverse effect to historic properties, the agency must notify the ACHP, preferably by submitting the required notification and documentation using the ACHP’s e106 system.
Do Section 111 leases require the development of a memorandum of agreement or programmatic agreement?
Whether a memorandum of agreement or a programmatic agreement is required for a Section 111 lease would depend on the Section 106 review for the undertaking (i.e., the lease action). A memorandum of agreement or programmatic agreement is required when an undertaking may result in an adverse effect to historic properties, or when the agency cannot fully determine how an undertaking may affect historic properties prior to approving a project. Alternatively, the agency may follow the process in 36 CFR §800.8(c) to use its environmental impact statement under the National Environmental Policy Act for its Section 106 review and incorporate a binding commitment to measures to avoid, minimize, or mitigate adverse effects to historic properties in its Record of Decision.