The historic tax credit, which is touted as spurring rehabilitation of old buildings throughout New Orleans and the United States for 40 years, is no longer history. It survived congressional tax negotiations this week, much to the relief of real estate developers and preservationists.
"The major post-Katrina construction boom centered around restoring historic buildings - especially in the New Orleans Central Business District - can continue," said Jack Davis, interim executive director of the Preservation Resource Center.
The program, established in 1976, gives developers a 20 percent tax credit for qualifying renovations of old buildings. Proponents consider it an incentive to repurpose historic structures, eliminate blight, transform communities and create jobs. Among examples where it has been used in New Orleans:
The American Can Factory in Mid-City -- Now the home of apartments, retail stores and restaurants.
The Hibernia National Bank building in the CBD -- Apartments and offices
The St. Thomas public housing complex in the Lower Garden District and the Iberville public housing complex adjacent to the French Quarter -- Mixed-use, mixed-income developments.
The Max Barnett Furniture Store, a CBD art deco building -- Ace Hotel.
The New Orleans Public Service Inc. headquarters, another CBD building -- NOPSI Hotel.
The tax credit has cost the federal government about $25.2 billion over the past four decades, including $1.2 billion in 2016 alone. Thus during negotiations this fall in Congress over how to avoid major spending cuts while delivering major tax cuts, an early version of the Republican bill called for eliminating both tiers of the historic tax credit:
20 percent for "certified historic structures"
10 percent for other buildings that opened before 1936.
That spurred lobbying from Louisiana and around the country. The Preservation Resource Center encouraged members to call their representatives in Congress. Developers and economic development leaders wrote letters to newspapers. Local governments adopted resolutions.
Among their points: $1.3 billion in Louisiana projects -- about 5 percent of the national total -- have qualified for the historic tax credit since 2011, and 38,000 jobs were created in the state.
It worked. An amendment by Sen. Bill Cassidy, R-La., who is a member of the Senate Finance Committee, restored the 20 percent credit to the GOP tax bill, although the 10 percent credit was repealed. In mostly party-line votes, the House and Senate approved the $1.5 trillion bill Wednesday (Dec. 20).
"We were fortunate to lead a coalition of people from across the country, coordinating the effort to preserve the historic tax credit," Cassidy said Friday. "These credits will continue to revitalize communities in Louisiana and create jobs."
"Louisiana's unique cultural and architectural heritage means our state has consistently been at the top of the list of states that utilize the rehabilitation credit," said Rep. Garret Graves, R-Baton Rouge. "The preservation of this credit helps to protect many historic buildings and economic development projects in our state."
For full article: http://www.nola.com/national_politics/2017/12/historic_tax_credit.html