A broad coalition that includes preservationists, developers and investors is nervously watching as a handful of members from the U.S. House and Senate negotiate a final version of the Republican tax reform bill. At issue: the fate of the federal historic building tax credit program, credited with spurring historic preservation and redevelopment in aging commercial corridors by enabling developers to recoup 20% of the cost of renovating a historic building.
The program was spared in the Senate’s version of the tax reform bill, thanks in large measure to efforts by Louisiana’s own Sen. Bill Cassidy. But the program wasn’t included in the House version, which was passed first, and it is unclear whether it will survive the Congressional reconciliation process.
“We’re hardly out of the woods,” says Fairleigh Jackson, executive director of Preserve Louisiana.
Adding to the concern of Jackson and others is the fact no member of the Louisiana Congressional delegation sits on the reconciliation committee, which will come up with a compromise version of the bill that then gets voted on by both chambers.
The historic building tax credit program has been crucial to the redevelopment of downtown Baton Rouge, as well as the rehabilitation of older neighborhoods throughout the state. Among the dozens of local projects made possible in recent years by the program, which is typically used in conjunction with a 25% state building tax credit program, are downtown hotels like the Watermark, Hotel Indigo and Hilton Baton Rouge Capitol Center, major residential projects like the Commerce Building and 440 on Third, and mixed-use properties like the Kress Building, to name but a few.
While the program is on the chopping block because it is a tax incentive that technically costs the federal government money, data shows those costs have more than been offset by the benefits of returning aging buildings to commerce, where they can generate payroll, property and sales taxes.
Louisiana has been a particularly big beneficiary of the program. From 2002-2016, some 782 projects in the state totaling more than $2 billion were made possible by $430 million in federal historic tax credits. Those projects went on to generate some $444 million in total taxes while also creating more than 38,000 jobs.
Says Jackson: “This credit is the basis for historic preservation in our state.”
—Stephanie Riegel
