Stating that it was part of politics in Trenton as usual, the governor vetoed the just-passed historic tax credit bill today.  More information, including we hope a stated reason for its veto, as details become available.

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The New Jersey Assembly has scheduled a “floor vote” for the long-proposed state historic rehabilitation tax credit bill, A-1851 at 1:00 p-.m. on Mon., Nov. 22, 2010.  The Historic Property Reinvestment Act (HPRA) would make New Jersey the 32nd state to offer a powerful historic rehabilitation tax credit to spur job creation and desperately needed economic growth.

The tax credit will provide homeowners and corporations with an economic incentive to help revitalize older neighborhoods and reuse historic structures by providing a State tax credit for their rehabilitation. The credit, if established, would:

  • Allow a credit on state income or corporate business taxes of 25% of the qualified costs of a historic rehabilitation
  • Parallel federal historic preservation 20% tax credit, creating more commercial development opportunities
  • Be Useful for both residential and commercial property, developers and homeowners (combined with federal credit for income producing properties only)

The job creation and economic stimulus that the credits already established in 31 states are measurable and significant.  Click here for more information.

Advocates are urged to contact their Assembly members immediately to indicate your support for HPRA.

Guest author:  William Hoffman, Esq., CityScape Capital Group

Don’t let your historic property vanish into history! Industry professionals will explore creative financing options and tax incentives for financing your project, as well as give insight on the current historic preservation marketplace at the “Making Cents of Historic Preservation” conference on October 19th at Rutgers University in New Brunswick, New Jersey.

– Speakers will highlight the current climate for historic preservation
– Hear the latest tips on financing options and tax incentives for historic preservation
– Topics: Federal Rehabilitation Tax Credits, Easements, New Market & Renewable Energy Tax Credits
– Insider updates on the industry, State Historic Tax Credit legislation and more.
– Network with multi-state professionals

This conference will provide immediately useful information for project owners, developers, lenders and preservation professionals, including historic site managers, attorneys, architects, consultants and accountants dealing with preservation projects and related investments.  NJ CLE application pending and AIA members may earn Learning Units by submitting a self-report.

Please send email to Beth Beatty (Beth@PreservationEasement.org) or call 609-524-4044 for additional information. Your $50 registration fee (students $20) includes all conference workshops and lunch. Fax completed registration forms to 856-795-9722; you may pay by check/cash at the door.

Our colleague Bonnie McDonald, ED of the Preservation Alliance of Minnesota, guest blogs for the National Trust this week on how they worked with a strong group of partners to successfully gain passage early this year of what is the nation’s 31st state historic rehabilitation tax credit bill.

Bonnie writes “In 2009, we aligned ourselves with the Building Jobs Coalition, an advocacy partnership with representatives from the industries of organized labor, general contracting, architecture and engineering, real estate development, and local government economic development. The coalition worked closely with lead legislators to craft a construction job creation bill that included a diverse array of incentives. We were able to demonstrate through numbers compiled by Donovan Rypkema that historic preservation would create well-paying construction jobs – more jobs, in fact, than new construction. ”

Read more about how they did it, and Minnesota’s Top 10 Hail Mary Tax Credit Advocacy Tips.

The Historic Property Revitalization Act, to make New Jersey the 31st state to offer a powerful historic rehabilitation tax credit to spur job creation and desperately needed economic growth, has been re-introduced in the 2010 New Jersey Legislature.

Lead sponsors Sen. Barbara Buono (Middlesex) and Asym. Reed Gusciora (Mercer), long champions of the Historic Property Revitalization Act (HPRA), are heading efforts to get the legislation enacted, after several years of opposition from former NJ Governors.  Now, with the need for private investment, skilled jobs and community revitalization greater than ever, and a new Governor who supported HPRA during the fall election campaign, the historic tax credit legislation is poised for success!

To learn more and get involved, visit Preservation New Jersey’s “Take Action” webpage.  Ask NJ Assembly members and Senators to co-sponsor the bill (S659, A1851)

We spent a couple of very informative hours yesterday on a national conference call, hearing updates from several of the states that have (1) recently enacted new historic tax credit legislation, (2) fended off legislative and/or executive attacks on existing, always very effective, tax credit programs, or (3) expanded exsiting tax credit programs, even in the current dreadful economic climate.

Ohio and Arkansas recently established new historic tax credits programs, and the advocates –  statewide nonprofit heritage preservation organizations, chambers of commerce, developers, neighborhood and Main Street groups and affordable housing providers  – organized effective lobbying campaigns with similar themes.  Jobs creation and new economic activity were, in every state, the key to gaining political support for tax credit programs.  New York State’s recent expansion and improvement of their credit (see previous blog posts) occurred thanks to the Preservation League of NY State’s efforts to map the communities where development/rehabilitation projects would occur (National Register listed or eligible places in mostly distressed census tracts).

A major loft project in the bio-technology corridor in St. Louis, MO that used state and federal tax credits

Michigan has seen an improved and expanded tax credit program, thanks to the Michigan Historic Preservation Network’s “Economic Benefit Report Cards” that have demonstrated the job creation and economic expansion that has been a direct result of tax credit-driven projects across that high-unemployment state.

Strong and broad coalitions in Rhode Island, Iowa, Minnesota, Missouri and many other states helped to push legislation through that created, defended or expanded tax credit programs.  Active and involved leadership from smart growth groups, sustainability and environmental advocacy organizations, labor and real estate development entities and economic development interests was key to the effective results in each state.

New Jersey has a lot to learn, but many mentors to emulate!  It’s time for a “Heritage Development & Stimulus Summit,” with our partners in NJ and from nearby states with interests in development in our state coming together with opinion and policy leaders and makers to see a historic tax credit passed in 2010. With a Governor-elect on public record as being in favor of a historic tax credit, there is no better time than now!

Contact the NJ Heritage Development Coalition to be a part of a tax credit summit:  info@NJheritagedevelopment.org.

More than thirty states across the nation continue to reap a bonanza of surging economic activity by providing state historic tax credits to taxpayers undertaking qualified renovations of historic structures. The most successful state programs have been intentionally designed to compliment the existing federal historic tax credit program, creating significant efficiencies for already overburdened developers and spurring more private/public investment than would otherwise occur.

Recognizing this economic upside and the “green” nature of historic preservation, New York State just amended its state historic tax credit program. The previous incarnation had several limitations, especially related to transferring the credit and its modest dollar ceiling of $100,000, which had negligible real world impact on projects costing tens of millions. While the amended legislation is to be cheered as a step in the right direction – greater symmetry with the federal tax credit program and raising the credit ceiling to $5 million per project – the practical effects are not quite so rosy.

As a result of income and other regulations in the U.S. Internal Revenue Code, the majority of owners and developers of historic structures find that they cannot efficiently utilize the earned historic tax credits. Under the federal program, this problem is solved by taking on an investment partner and/or long term lessee for the project who can use the credits in accordance with law. This investment partner and/or long term lessee will provide equity funds to the deal in return for the credits and other financial benefits. In effect, a transfer of the credit occurs to optimize the value of the credits and to stimulate projects that might have otherwise had a gap in their financing sources. Herein lies the Achilles’ Heel of New York’s amended historic tax credit legislation. (more…)