March 2008


Grow Smart Rhode Island, the smart growth advocacy organization, and other supporters of the state’s historic rehabilitation tax credit program have released a new report quantifying the program’s impact on the state. The report, commissioned by a 57-member group that calls itself the Coalition for Neighborhood & Economic Renewal and includes businesses, municipalities and civic groups, shows that from 2002 through 2012, the credit will cost the state $460.16 million in tax revenue and generate $2.46 billion in economic activity – that is, $5.35 for every $1 invested. In addition, the program is expected to add $767 million to the tax base of local communities and generate $297.6 million in additional property-tax revenue over the next 20 years.

Meanwhile, Speaker of the Rhode Island House William Murphy recently reaffirmed his longstanding support of a strong, predictable and transparent state Historic Tax Credit. In remarks before the Greater Providence Chamber of Commerce at its February 7th legislative luncheon, the Speaker highlighted the value of the tax credit program and his opposition to the R.I. Governor’s proposed retroactive cap on the program.

It is anticipated that House Majority Leader Gordon Fox will introduce legislation soon that will incorporate the major tax credit proposals by Grow Smart Rhode Island and the Coalition for Neighborhood & Economic Renewal as an alternative to the Governor’s tax credit cap proposal.

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Virginia’s Historic Rehabilitation Tax Credit Program benefits Virginia
communities in multiple ways. Since its inception in 1997, the program
has spurred private investment of approximately $1.5 billion in the
rehabilitation of more than 1,200 landmark buildings. This investment
in turn has generated an economic impact of nearly $1.6 billion in the
Commonwealth and created more than 10,700 jobs and $444 million in
associated wages and salaries.

Survey results were applied to the analysis of a 10-year total of $1.454
billion in private expenditures for rehabilitation tax credit projects. It was
determined that $952 million represents the amount leveraged by the state
tax credit—those dollars tied to projects for which state tax credits were an
essential driving force.
Among the study’s conclusions, expenditures of $952 million created
an estimated

  • $1,595 billion in total economic impact to Virginia
  • 10,769 full and part-time jobs from direct employment and
  • indirect employment in other sectors of the economy
  • $444 million in labor income (wages and salaries)
  • $46 million in state tax revenue

Other program dividends enhance quality of life and social capital by preserving
and restoring community fabric; inspiring people toward reviving historic
districts and reclaiming their community’s legacy; promoting heritage tourism
and educational resources; increasing a broader range of housing stock;
and supporting smart-growth and sustainable development through the
efficient reuse of existing buildings and infrastructure.

Currently, over half of the states have recognized the power of a state level historic rehabilitation incentive to capture new investment dollars in older towns and cities. The states surrounding New Jersey have all adopted such incentive programs and are seeing hundreds of millions of dollars in private revitalization investment in their cities. Maryland, Delaware, New York, Connecticut and Rhode Island have all adopted laws creating credits against state taxes to provide incentives for the appropriate rehabilitation of historic buildings. Philadelphia has seen similar investments thanks to significant property tax abatements on offer (Pennsylvania’s constitution prohibits income tax credits).

New Jersey offers no such market-based incentives for urban redevelopment. Where do you suppose the money’s being invested?

The NJ Heritage Development Coalition grows! The NJ chapter of the American Planning Association; Regional Plan Association for NJ, NY & CT; the National Trust for Historic Preservation, Preservation New Jersey and the Croassroads of the American Revolution Association are soon to be joined by more groups committed to thoughtful economic development in NJ.  The Coalition supports the Historic Properties Revitalization Act (HPRA).