Historic Tax Credits are important to the continued revitilization of Cherokee Street: UPDATE

Posted by Anne McCullough on April 3, 2013 | Comments Off on Historic Tax Credits are important to the continued revitilization of Cherokee Street: UPDATE

UPDATE: CALLING ALL CONCERNED ST. LOUISANS – STL Style is hosting a call party TOMORROW (Thursday) from 11am-1pm to let our elected leaders know that the Missouri historic tax credit program MUST be protected! Capping this program will be devastating to the ongoing revitalization of our city. We’ll have a complete list of state legislators’ contact info, and we’re going to flood the lines in support of historic tax credits. Be there if you can!

UPDATE:   The House of Representatives will be reconvening from Spring Recess this week, and it is important to let them know how you feel about the importance of Historic Tax Credits.  What can you do? Call and email your legislators and urge them not to support a reduction in Missouri’s Historic Tax Credit.  You can find more resources and information to guide your interactions here: https://mohistorictaxcredit.wordpress.com/act-now/

3.4.13: The Missouri Senate gave first-round approval to Senate Bill 120 last week.  Senate Bill 120 would drastically cut incentives for Historic Preservation and low income housing.  Historic Preservation tax credits would be capped at $45 million a year, instead of the current $140 million, with a $5 million cap on small projects (which are currently uncapped) and low income Housing incentives would be capped at $50 million a year, which is a cut from the roughly $190 million current limit..   Similar cuts have been proposed in the past, but never made it through the Missouri House or Representatives.

Missouri’s historic tax credit — the biggest program of its kind in the nation- has been dubbed a “national model” for economic development by the Wall Street Journal, with respected preservationist and consultant Donovan Rypkema noting that “the Show Me State has shown the rest of the country how to attract private capital into our historic buildings.”  The Historic Preservation Tax Credit helps revive economically unproductive districts in both rural and urban communities-thus increasing the state tax base.  In fact, 85% of eligible buildings are located in depressed areas, both urban and rural.

The Historic Tax program’s intent is to aid in the redevelopment of historic structures in the state of Missouri. The Missouri Historic Tax Credit Program was passed in September 1997 by the Missouri General Assembly, and became effective January 1, 1998.  Since then, $818 billion Historic tax credits have been redeemed and $4.3 billion in project costs related to the HTC program have been spent in Missouri.  From July 1 2012 to December 31, there were 50 historic tax authorizations for a total of $49.2 million.  Missouri ranks near the top among states in the amount of tax credits authorized under the housing and historic development programs.

Missouri HTCs are a dollar-for-dollar credit against a taxpayers’ liability for certain state taxes, including income tax (excluding withholding tax), bank tax, and insurance premium tax.  The credit is equal to 25% of a project’s qualified rehabilitation expenditures.  Historic Tax Credits provide incentives for the redevelopment of commercial and residential historic structures.  In order to be eligible for the program, a structure must be listed individually on the National Register of Historic Places, be a contributing structure in a National Register historic district, or be located in a local historic district certified by the United States Department of the Interior.  Renovation costs must be at least 50% of the total acquisition cost of the property.  Plans must be approved by the Missouri State Historic Preservation Office.

Missouri’s Historic Tax Credit program has made a huge impact on the St. Louis’ ability to revive commercial districts.  Previously vacant spaces have been renovated and are now all filled with thriving businesses.   “It is the ability of historic preservation to serve people by providing jobs, stimulating investment, generating community pride, creating a sense of place, and stabilizing neighborhoods, that make it a worthwhile pursuit.”-Landmark Association. The specific economic impacts of the HTC program include new sales/use and income taxes for state and local governments, leveraged private investment, significant property tax collections, earnings tax revenue and significant job impacts.

Over 10 properties on Cherokee Street have used Historic Tax Credits- including 2710-16 Cherokee, 3407-09 California, 3345 Pennsylvania, 2900 Cherokee, 3338 Texas, 3330 Missouri, 3324 Missouri, 3246 Michigan,  2731-41 Cherokee, 2617-19 Cherokee, 2608-10 Cherokee, and 3200-02 Cherokee .  There are plenty of other properties on Cherokee street that would qualify for the program- an opportunity for building owners and developers to continue the revitalization of the Cherokee Business District,  supporting buildings and spaces that are rich in history and provide a unique sense of place.  A drastic cut in the program would have a huge impact on our ability to continue the revitalization of commercial districts in St. Louis- and Cherokee Street.

Another example- The Polar Wave Ice Building at 2200 Gravois, was redeveloped in 2010, and has helped in creating a neighborhood asset that attracts vibrant new businesses and people to Benton Park. A historic structure – on the verge of collapse- was preserved through Historic tax credits.  It cost more than $900 million to rehab the structure, a price tag off-set by assistance that included $280 thousand in brownfield remediation for lead and asbestos abatement; $1 million in Tax Increment Financing (TIF) from St. Louis; and state and federal historic tax credits that will provide for about 45% of the build-out costs.

The following properties are currently listed under Landmark Association’s 2012 endangered list-  with the help of the Historic Tax Credits,  may have a chance of being preserved and rehabilitated:

St. Louis Palladium at 3618 Enright, Crunden-Martin Manufacturing at  757 S. 2nd Street, James Clemens Jr. House at 1849 Cass Avenue, Carr School at 1421 Carr, Cupples #7 at  1014-1030 Spruce,  Bethlehem Lutheran Church at  2153 Salisbury, St. Mary’s Infirmary at 1528 Papin,  Missouri Belting Company at 1021 South Grand. 

Additional Programs being cut

The Missouri Low Income Housing Tax Credit  increases the availability of rental housing that is affordable to low-income families and seniors. It also reduces blight and improves communities through the new construction and rehabilitation of affordable rental housing in Missouri. The additional project equity raised by the state LIHTC allows more projects to be built and makes project rents more affordable. In 17 out of 27 projects authorized in FY2010, the projects would not be feasible as Low Income Housing Tax Credit units without the state tax credit equity, resulting in a loss of 794 affordable rental units in the state. The reduced rents brought about by the state tax credit increases households’ disposable income and allows low-income families and seniors to meet more of their other basic necessities such as food, clothing, education and health care. The Missouri LIHTC increases the quality of construction and provides additional amenities in developments such as community rooms for seniors and learning centers for children living in affordable multi-family housing developments in Missouri.

Filed under miscellaneous tax credits, The Neighborhood Preservation Tax credit and the Rebuilding Communities Tax Credit are also in danger of being cut by Senate Bill 120.

The Neighborhood Preservation Tax Credit provides an incentive for homeowners in certain lower income areas to rehabilitate their homes or an incentive for “in-fill” new construction of owner-occupied housing. In Fiscal Year 2009, $10,378,968 in tax credits were authorized, $5,434,477 in tax credits were issued, and $5,176,659 in tax credits were redeemed.

The Rebuilding Communities Tax Credit program provides a tax credit for eligible businesses locating, relocating or expanding within a distressed community. The program has an annual cap of $8 million. In Fiscal Year 2009, $2,002,376 in tax credits was authorized and issued, while $1,548,622 in tax credits was redeemed. Based on the REMI model, for every dollar spent in Rebuilding Communities Tax Credits, the State receives a $.13 in net General Revenue over a one-year period.

 

Please let your legislators know how you feel about this issue!

Don’t have contact information for your state legislator?  Look here: http://www.moga.mo.gov/ Click on Joint Information, Member look-up.

Additional Information:

Senate Bill 120


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