WATERLOO -- Billie Bailey, executive director of the Grout Museum, remembered taking a trip to the Quad Cities to enjoy some of its cultural attractions.

As Bailey and her family checked out the area's museums and botanical gardens, she noticed a difference between that area's cultural destinations and Waterloo's attractions.

"You had to get in your car, use a map and drive to each place," Bailey said. "With ours, on a nice day you could walk."

That close proximity helped the Waterloo downtown earn a distinction last week. The Iowa Department of Cultural Affairs designated part of the Waterloo downtown as a cultural and entertainment district.

Melvina Scott, executive director of the African-American Historical and Cultural Museum, said it's not surprising the area would receive such a distinction.

"Waterloo has just a huge array of different businesses from different cultures," Scott said.

Bailey said the benefits from the cultural district should be widespread.

"Not only will it boost the cultural organization, but it will also boost the businesses located in that district," Bailey said.

One benefit businesses can get from locating in the cultural and entertainment district is the accessibility to certain tax credits. Specifically, certain businesses in the district are eligible for historic preservation tax credits, which can be used in the restoration of historic buildings.

The Iowa legislature provided $40 million in historic preservation tax credits over the next 10 years specifically for businesses inside cultural districts. These credits are income tax credits equal to up to 25 percent of certain rehabilitation costs.

Jack Porter, cultural districts coordinator with the Iowa Department of Cultural Affairs, said to be eligible for historic preservation tax credits, buildings must be either listed on the National Register of Historic Places, contributing to the significance of a historic district, determined eligible by Porter's office or designated a local landmark by a city.

Should a building meet one of these requirements, an application process must be completed for the building's owners to receive the credits. Buildings receiving these credits also can receive Federal Rehabilitation Investment Tax Credits if they qualify.

"This is a huge advantage to aid in the rehabilitation of downtown, and one I know you are ready to take advantage of as a cultural district," said Anita Walker, director of the Iowa Department of Cultural Affairs.

Getting a cultural district also gives the area a few marketing tools. By getting the designation, signs will be placed along highways highlighting Waterloo's cultural district as a tourist attraction.

Area organizations also can use the cultural district in promotional materials. Gary Wheat, executive director of the Waterloo Convention and Visitors Bureau, said the designation gives the area an extra leg up from a tourism standpoint.

"It only gives us more credibility as a destination," Wheat said.

Marketing was the big reason behind Cedar Falls applying for a cultural designation. The Cedar Falls downtown was named a cultural district last year, which was the first year for the designations.

Cary Anglum, executive director of Community Main Street Cedar Falls, said there was no funding attached to the designation when they applied for it.

"We've just used it as another jewel in our crown," Anglum said.

Terry Poe Buschkamp, executive director of Main Street Waterloo, said Waterloo's cultural district will help attract other cultural and entertainment venues to the area. Bailey said she hopes that will be the case.

"We've got to keep doing everything we can to draw people into the downtown," Bailey said. "So go enjoy a cigar and dinner and stop at a grocery store on the way out."

Contact RC Balaban at (319) 291-1418 or rc.balaban@wcfcourier.com.