Credit Worthy News

Bill MacRostie

Bill MacRostie
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A Political Champion for Historic Credits

Posted by Bill MacRostie on Wednesday, March 2, 2016


I just returned from the ULI Carolinas' Meeting in Raleigh, North Carolina. What a difference enlightened leadership can make in effective revitalization efforts! In stark contrast to Governor Jerry Brown—whose spirited attack on state historic credits in California at last year's ULI Fall Meeting in San Francisco betrayed an ignorance of their power—Republican Governor Pat McCrory’s welcoming remarks in Raleigh opened with an unsolicited account of the importance of the newly revitalized state historic credit program in North Carolina.

Those of us in the trenches who have been watching the transformative effect of the state and federal historic credit programs at work in North Carolina are true believers in their effectiveness, but it was nice to hear a successful politician make the same case. And Gov. McCrory’s obvious enthusiasm for historic credits made clear that his strong leadership last year to replace the state’s sunsetting program was heartfelt.

The Governor’s enthusiasm aside, during my career I cannot think of a state where I’ve seen a more dramatic impact on communities from historic credits—or more quickly. In the last fifteen years, downtown Durham has literally been transformed, with the initial catalyst being the project financing power of historic credits. The same in Winston-Salem… and in many other cities and mill towns throughout the state.

It was terrific to hear confirmation that the Governor agrees.

Topics: ULI, State HTC, Conferences

Functionally-Related Complexes and the NPS

Posted by Bill MacRostie on Thursday, October 22, 2015

Harmony Mills | Cohoes, New York (Photo credit: The Lofts at Harmony Mills)

A developer taking on a project involving a group of buildings that served together historically is likely to visit an arcane corner of NPS world called the functionally-related complex policy. Military bases, hospital complexes, industrial complexes, and many other groups of buildings all come under the umbrella of what NPS regulations define as a single resource AND if a single developer or related developers takes on a phased project involving two or more buildings in the group, then the project will be required to file a single Part 1, 2 and 3 application, and will not receive a Part 3 approval until all phases are complete.  

Clearly, where a phased project can be completed within a 24-month construction period, the issue of a single application and receipt of a Part 3 approval at overall project completion is manageable. Where our clients run into trouble—in addition to the design-related issue like the demolition of seemingly unimportant buildings—is when a multi-building project stretches over several years with early phases completed and placed in service, but not receiving a Part 3 approval to close the phase out.

Having early phases hanging out with no Part 3 approval creates at least two issues for developers and investor:

  • First, to the extent there’s an equity hold-back awaiting receipt of Part 3 approval, that hold-back will continue in place until later phases are complete, which in some cases could be years.

  • Second, if there are different lenders or investors for separate phases of work, those parties’ risk increases with time passing and development activities occurring that they may not have control over.

MHA has been successful over the years finding some limited solutions to the NPS’s functionally-related policy, but they have been one-off answers that have not necessarily led to written policies. We are currently leading an effort on behalf of the Historic Tax Credit Coalition to come up with some broad, permanent solutions that NPS will be willing to apply as overall policy guidance.

Stay tuned in the coming months for more news about that industry initiative.

Contact us with your questions

Topics: policy

Gov. Brown Leaves No Doubt About Future of State Historic Credits in California

Posted by Bill MacRostie on Wednesday, October 7, 2015

I’m attending the ULI Fall Meeting in San Francisco, and it’s a fantastic conference with heavy emphasis on future tech and demographic trends; their likely impact on cities, development and land use.

In a fascinating session at the end of the day Tuesday, George Marcus, Chairman of Marcus and Millichap, sat down with Gov. Jerry Brown and discussed topics ranging from closing the state’s $27 billion budget gap, possible reforms to the California Environmental Quality Act, the California drought, and the impact on California and the world of climate change.

As the session was wrapping up, the last question from the audience was from Brandon Hill of Fusion Advisory Services in Birmingham, AL. In an implied reference to the governor’s 2014 veto of a new state historic tax credit bill passed unanimously by both houses of the California legislature, Brandon pointed out the positive impacts across America of state and federal historic credits, and asked the governor about his views on the subject.

Brown responded with an account of the arcane budget rules in California where a tax incentive can be enacted by the legislature with a simple majority but rescinded only with a two-thirds majority, thus having the practical political effect of permanence in the tax code. Further, he felt the historic credit bill was a one-off effort relating to a single issue, while his preference would have been for a larger bill that took a more holistic view of development incentives. This seemed like a rational, reasonable defense of his veto.


The governor went on to describe in surprisingly personal and bitter terms a couple of his past encounters with the preservation community. While living in Sacramento in a residential loft building, he was prevented from installing double-paned windows with improved acoustics so that when the bar downstairs closed in the middle of the night, the patrons on the sidewalk downstairs would wake him up. And, while he was mayor of Oakland, the preservation interests blocked the demolition of a “tired, non-descript little building,” thereby preventing the development of a major project the he supported. He said, “in general, it’s just hard to develop in historic areas because of all the requirements.”

His last comments when the session wrapped up was, “Yeah, historic credits in California…don’t hold your breath.”

Well, at least we know where we stand and who we have to convince.

Topics: policy, HTC