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Historic Tax Credits News Briefs - March 2012

Sen. Ben Cardin, D-Md. introduced the Creating Prosperity through Preservation (CAPP) Act of 2012. S. 2074 would increase the federal historic tax credit (HTC) from 20 percent to 30 percent for deals with less than $5 million in qualified rehabilitation expenditures; index the date for the 10 percent credit for non-historic buildings so that both 20 percent and 10 percent credits would apply to buildings 50 years and older; and provide a 2 percent HTC boost for achieving energy savings at least 30 percent greater than established industry standards for similar buildings. The CAPP Act would also eliminate the federal taxation of the proceeds of a state HTC transaction for both state credit certificate sales and credits allocated through partnerships. Sen. Olympia Snowe, R-Maine, is cosponsoring the bill, which is companion legislation to H.R. 2479, which was introduced in the House in July. Upon introduction, S. 2074 was referred to the Senate Finance Committee.

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The historic Saenger Theatre in New Orleans, La. received $18.7 million in federal and state historic tax credit (HTC) equity. The 1920s building is undergoing a $51 million rehabilitation that will transform it into a multi-purpose performing arts facility, restore original architectural features and expand the stage house to allow for larger productions. The Saenger was operational and in the midst of minor renovation when it was damaged by Hurricane Katrina. In addition to HTC financing, the project also received a $14 million new markets tax credit allocation through National Trust Community Investment Corporation (NTCIC), $7.5 million in Broadway South state credit equity from Stonehenge Capital and Tax Credit Capital, and a $13.1 million loan from the Canal Street Development Corporation. JPMorgan Chase and Whitney Bank served as federal tax credit equity investors; Stonehenge Capital and Tax Credit Capital provided the state HTC equity. The project is expected to create 421 construction jobs and 486 permanent jobs, and local sales taxes are projected to increase by nearly $1.2 million.

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In his proposed fiscal year 2013 budget, Maryland Gov. Martin O'Malley set aside $7 million for the Sustainable Communities Tax Credit program to promote urban redevelopment and create jobs. Under the program, historic structures are eligible for a credit of as much as 25 percent of qualified rehabilitation expenses (QREs). Non-historic buildings that are certified sustainable under a rating system such as LEED are also eligible for a credit of as much as 10 percent of QREs. O'Malley's budget proposal includes nearly $800 million in reductions to help close an approximate $1 billion budget gap.

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Kansas Gov. Sam Brownback, in his State of the State speech, proposed the elimination of roughly two dozen state tax credits, including the state historic preservation credit. Brownback's tax reform plan calls for lower income tax rates for individuals and small businesses, and would eliminate income tax deductions and exemptions in addition to tax credits. The Center on Budget and Policy Priorities says the proposal would benefit many large corporations and cause the state to lose $266 million or more in annual tax revenues. The proposed changes are contained in Senate Bill 339 and House Bill 2650. The Wichita Eagle reported that the development community is expected to lobby the Legislature to protect the HTC. Kansas' HTC produced 4,443 jobs and generated $323 million in economic output from 2001 to 2010, according to a 2010 report from the Kansas Preservation Alliance.

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A total of $29.6 million in tax credit allocation is available in Round 8 of the Ohio Historic Preservation Tax Credit program. Applicants are required to notify both the Office of Redevelopment and Ohio Historic Preservation Office prior to submitting an application and are strongly encouraged to schedule a pre-application meeting with both offices. The Office of Redevelopment can be contacted at [email protected] or (614) 995-2292 and the Ohio Historic Preservation Office can be reached at (614) 298-2000. Applications must be submitted (not postmarked) to the Office of Redevelopment by 5 p.m. on Friday, March 30. An application form and self-scoring sheet are available online at the Ohio Department of Development.

Journal Category:

Historic Tax Credits

Authors:

Novogradac

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