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A New Lease on Life
Douglas McWhirter
02/02/2004
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While across the country, restoration activities may vary in scope, detail and financial viability, their common ground lies in numerous tax incentives that make private investment in architectural rehabilitation possible.
 The National Park Service currently administers the Federal Historic Preservation Tax Incentives Program that rewards private investment in rehabilitating historic properties. This program provides a 20 percent tax credit for the restoration of buildings listed with the National Register of Historic Places, and a 10 percent credit for noncertified buildings built before 1936. (Click image to enlarge)
According to Leith-Tetrault, there are numerous state and local incentives that may apply as well. "There are 23 states that have some form of historic tax credit," he explains. "You can use these together with federal credits and local credits."
On the local level, one will find any number of tax incentives and laws that apply to historic preservation, some that apply to particular rehabilitation tasks. An example is that for historic building restoration, most major cities provide property tax freezes that enable building owners to keep the same tax rate as long as they own the property.
According to Gilmore, the options for utilizing tax credits can become important, if complex, tools when securing financing for a restoration project. "In the Old Bank District, we spent $28 million to renovate three buildings. We were eligible for roughly 19 cents on the dollar in tax credits, which then sold to a tax credit partner for $4.8 million in cash," he explains. "This type of financing is extremely complicated, but at the end of the day, it is worth it."
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