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Historic Tax Credits News Briefs - December 2016

Monarch Private Capital and BNA Associates held the groundbreaking Oct. 18 for the renovation of Hotel Clermont in Atlanta. The 88,000-square-foot building will be transformed into a 94-room boutique hotel with a destination restaurant. The Hotel Clermont’s renovation was bolstered by Georgia House Bill 308, which raised the maximum state tax credit allowance for historic structures from $300,000 annually to $5 million for certified nonresidential structures or $10 million for large developments that meet certain job-creation standards. 

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DeSales Community Housing Corporation received preliminary approval Oct. 13 from the St. Louis Industrial Development Authority for financing for the rehabilitation of 19 St. Louis buildings. Desales can receive up to $6.5 million in housing revenue bonds for the $12.7 million rehabilitation, scheduled to begin early next year. DeSales also applied for approximately $2.7 million in state and federal HTCs, and has already been approved for $157,661 in each of the state and federal LIHTCs. Renovations will include new roofs, windows and interior work. A portion of the units will also be converted into affordable housing available to residents earning below 60 percent of the area median income (AMI). Rehabilitation is expected to take one year.

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The National Trust for Historic Preservation (NTHP) announced in mid-October the 2016 list of America’s 11 Most Endangered Historic Places. The National Trust publishes this annual list of historic places that are in danger of being lost. The 2016 list includes sites such as San Francisco’s Embarcadero, Sunshine Mile in Tucson, Ariz., the Charleston Naval Hospital District in North Charleston, S.C., and the historic downtown of Flemington, N.J. Since 1988, the Trust has identified 270 sites, the vast majority of which have been preserved.

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On Oct. 19, the Historic Tax Credit Coalition (HTCC) released comments on the IRS’s proposed temporary regulations concerning Section 50(d) income. The IRS proposed rules in July concerning the income inclusion regulations under Section 50(d)(5) of the Internal Revenue Code and the HTCC commented on five areas in which the proposal applies to historic tax credit- (HTC)-financed properties. The HTCC requested that the IRS include a provision that permits parties in the transaction to make an irrevocable election to reduce the basis of the property by the amount of unrealized 50(d) income after the lease is terminated or the credit claimant disposes of its interest in the lessee. Also requested was a change in the effective date of the proposed regulations, as well as clarification on how to apply the new regulations to projects with multiple placed-in-service dates for various buildings. In addition, the HTCC asked, in the interest of avoiding future disputes, that the IRS state that it doesn’t intend to challenge good-faith tax positions taken by taxpayers ahead of the effective date. Finally, the letter requested that 50(d) income be reported over the same depreciation recovery period and convention as is used by the owner.

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The historic Rosa True School in Portland, Maine, hosted its grand opening Oct. 25. Coastal Enterprises Inc. (CEI) provided a $308,000 state HTC equity investment for the rehabilitation by Developers Collaborative. Renovations for the building included addition two new apartments and converting another to be ADA accessible. On the exterior, a majority of the building was repointed while original windows and doors were repaired. On the interior, the two historic main staircases remain. Inside, the corridors feature beaded board wainscoting and historic door casings. In the apartments, the wainscoting remain with historic chalkboards and window trim. In addition, the foundation was waterproofed.

Journal Category:

Historic Tax Credits

Authors:

Novogradac

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