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Credit Worthy News

Historic Tax Credit Legislative Update | August 2017

Posted by Katherine Ferguson on Monday, August 28, 2017

MISSOURI
Tax credit reform is once again a subject of much debate in Missouri’s capital with the historic preservation tax credit garnering much attention. Proponents of tax reform proposals that eliminate the state HTC program cite a report stating that only 26 cents of every tax credit dollar is returned to the state treasury; opponents of reform call this report “amateurish” and not representative of the reality of the program or its positive effects on the state.

A special committee formed by Governor Eric Greitens released a report in early July calling for sweeping changes to the historic preservation tax credit program, much to the dismay of developers, bankers, and local leaders. The current tax credit covers 25 percent of the cost of rehabbing historic buildings and any changes could impact projects in large cities, particularly St. Louis, where 900 projects over the past 15 years have utilized the tax credit for a combined $3.15 billion eligible for reimbursement.

Developers argue the state tax credit makes rehabbing historic buildings possible, and without it, downtown St. Louis will have continuing blight due to abandoned historic structures. Supporters of keeping the tax credit program believe the present uncertainty will cause stagnation in the local development environment and drive investment out of the state.

 

MICHIGAN
Conversely, Michigan’s former state historic preservation tax credit may be receiving new life thanks to recent proposed legislation. In early July, a bill was introduced in Michigan’s State Senate to reinstate the historic preservation tax credits that went away in 2011 under Governor Rick Snyder’s sweeping tax reform. The bill would allow individuals and companies to “credit up to 25 percent of qualified expenditures when paired with federal tax credits,” according to the legislation. 

Over the 11-year period when the credits were available, tax credits leveraged almost $1.5 billion in private investment and created 36,000 jobs, according to data from the Michigan Historic Preservation Network.

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Aurora St. Charles Senior Living | Aurora, IL
Photo Credit: Leslie Schwartz

ILLINOIS
Elsewhere in the Midwest, the Illinois’ River Edge Redevelopment Zone (RERZ) Historic Tax Credit was extended with the signing of legislation by Governor Bruce Rauner on August 18th, 2017. The legislation benefits special historic zones in five cities – Aurora, East St. Louis, Elgin, Peoria, and Rockford – that were identified as in need of special incentives for economic development. This program allows for a tax credit of 25 percent of qualified rehabilitation expenses for historic projects, and since 2009 the program has mobilized $82.1 million in private investment in these communities.

A similar 25 percent HTC was proposed earlier in the year for the cities that were the sites of the Lincoln-Douglas Debates of 1858 (H.B. 3096). Municipalities that would benefit include Ottawa, Freeport, Jonesboro, Charleston, Galesburg, Quincy, and Alton. The outcome of that proposal is yet to be determined. No state historic tax credit program has yet been proposed for the Greater Chicago area.

 

WISCONSIN
Governor Scott Walker’s 2017-2019 biennial budget is creating uncertainty for historic rehabilitation projects in Wisconsin. Included in the proposal is a $10 million annual aggregate cap for the state HTC along with added stipulations requiring applicants demonstrate that their projects create jobs and improve local economies. This type of forced competition is leading developers in smaller communities to shy away from advancing projects, anticipating fierce competition with larger projects in urban centers which routinely claim the majority of annual tax credit allocations. In 2015, Milwaukee projects alone were awarded more than $48 million in tax credits, representing over 42 percent of the state’s annual allocations. However in 2016, $58 million in credits were awarded with 70 percent of projects in communities with a population less than 100,000, proof that the economic benefits of the HTC program are helping smaller communities under the uncapped program.

This is not the first time HTC defenders fought legislation of this type. Governor Walker’s 2015-2017 budget proposed similar changes to the program but the Legislature did not agree. This year, Senate Republicans support a cap, but their proposal would increase the cap to $20 million with a project cap of $5 million and no stipulation for job creation.

 

If you are concerned about the future of your state’s historic tax credit, please make plans to engage your state legislators on behalf of your state’s HTC. The Historic Tax Credit Coalition and the National Trust for Historic Preservation are excellent resources for information on advocacy.

Topics: policy, Advocacy

What you need to know about the new Alabama HTC

Posted by Katherine Ferguson on Thursday, August 17, 2017

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Bell Building | Montgomery, AL

Perhaps one of the most anticipated state historic tax credit programs of the year, the Alabama Historic Rehabilitation Tax Credit was passed in May 2017. The revised legislation comes after a former program was allowed to sunset, putting some projects around the state on ice for nearly two years.

In the August 2017 issue of the Novogradac Journal of Tax Credits, MHA Southeast director Richard Sidebottom explains the factors at play and outlines the major changes that differentiate it from the previous Alabama HTC program. 

Read the full story here | 
Alabama Historic Tax Credit is Rehabbed

 

Topics: State HTC, Novogradac Journal of Tax Credits

The Historic Advisor | Summer 2017

Posted by Katherine Ferguson on Monday, August 14, 2017

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Inside the issue

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Topics: The Historic Advisor, Historic Breweries

RBIC Honors Cedar Street and the Bush Temple of Music

Posted by Katherine Ferguson on Friday, July 28, 2017

On Tuesday, July 25, Cedar Street Companies was honored by the Landmarks Illinois Real Estate and Building Industries Council (RBIC) for the outstanding rehabilitation of The Bush Temple of Music. The annual RBIC Award, given each year since 1993, recognizes companies and individuals that "demonstrate a special dedication to historic preservation through responsible development and planning." As part of the The Bush Temple team, we are proud of the outstanding preservation work that is represented in this exeptional project. 

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In their rehabilitation of The Bush Temple for use as 101 luxury apartments, Cedar Street Properties went to great lengths to maintain the historic character of the building - from marble walls and terrazzo floors to original single-paneled doors with fritted glass and restored panel windows. 

The Bush Temple of Music joins Cedear Street's family of FLATS branded apartment buildings, a group of historic Chicago buildings that are offering amenity-rich living experiences in the city. MHA is proud to serve as historic consultants for The Lawrence House and The Otis in addition to The Bush Temple. 

                  

New Historic Rehabilitation Guidelines

Posted by Katherine Ferguson on Friday, July 14, 2017

Consider them the "10 Commandments of Rehabilitation." The Secretary of Interior’s Standards for Rehabilitation are the litmus by which all historic tax credit projects are tested before they are approved. If you have used an HTC program, you are probably well aware of their allowances and limitations for sensitively rehabilitating an historic building.

Note: The avoidance of words like preservation, restoration and reconstruction in describing them is intentional. Those each have their own set of standards. Rehabilitation is the only treatment that allows for alterations and the construction of a new addition.

Screen Shot 2017-07-13 at 5.17.07 PM.pngClick image for full 2017 guidelines

Just this week, the National Park Service released revised Guidelines. While the Standards themselves remain the same, guidance on specific treatments have been updated to include 20th-century building types, materials, and systems that are now 50 years old. Advances in technology have also been taken into consideration for the Guidelines as well. In particular, the new version includes additional entries on glass, paint and other coatings, composite materials, imitative materials, and curtain walls. Rehabilitation Guidelines are also broadened for related new construction on a building site.

Another change to the Standards includes the removal of the Energy Efficiency section (see the Illustrated Guidelines below) and the inclusion of Guidance on Resilience to Natural Hazards.

Here are a few more helpful links to guidance from the Technical Preservation Services division of the Nation Park Service:

  • Preservation Briefs | These 49 whitepapers help to shed light on some of the more specific questions that might arise in historic rehabilitations from cleaning, repair, and substitute materials to seismic retrofits, lead-paint hazards, and graffiti removal.

  • Illustrated Guidelines on Sustainability for Rehabilitating Historic Buildings | Last updated in 1997, the pictures may be old but so are the buildings they discuss. This guide for rehabilitation treatments includes, among other things, a chapter on Energy Conservation.

  • Sustainability | The National Park Service has a whole webpage dedicated to preservation and sustainability. Check it out for subjects like energy efficiency in historic buildings, new technology and historic properties, sustainable prerservation in practice, and an interactive web feature on sustainability guidelines.

For guidance on how to apply the Standards to a specific project, contact our expert team.

Topics: National Park Service, Standards for Rehabilitation, Secretary of the Interior, Guidance

Credit Worthy News is a blog from MacRostie Historic Advisors, focusing on news about historic tax credits.

Here you will find posts about:

  • the latest HTC policy news,
  • trends in historic rehabilitations,
  • and success stories from clients across the country

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