U.S. Senators Ben Cardin (D-MD) and Susan Collins (R-ME) today introduced bipartisan legislation (S. 1141) that would create jobs across the nation by encouraging the restoration of historic buildings into useful economic properties. Projects that receive Historic Tax Credits under the Creating American Prosperity Through Preservation (CAPP) Act help revitalize communities, encourage private investment and create safer, more secure neighborhoods. The bill is being cosponsored by Senators Chuck Schumer (D-NY) and Debbie Stabenow (D-MI).
"We can create jobs by preserving the abundant history that reaches to every corner of Maryland and across America. Extending the Historic Tax Credit will save many historically significant buildings and homes in Maryland and elsewhere while creating quality jobs, stimulating long-term economic development and bringing life to forgotten neighborhoods," said Senator Cardin, a member of the Senate Finance Committee. "The Historic Tax Credit has created some 2 million jobs nationwide since 1978 and by expanding the program to include energy-efficient improvements and additional restoration projects, we can create thousands of jobs renovating historic properties and working in many of the restored, modernized buildings."
Congress created historic preservation tax benefits in 1976 to encourage voluntary, private-sector investment in preserving historic buildings. The program is jointly managed by the National Park Service (NPS) and the Internal Revenue Service (IRS), in partnership with State Historic Preservation Offices.
"The National Trust for Historic Preservation supports the CAPP Act, for its power to protect our heritage, fuel our economy and create jobs," said Stephanie Meeks, president of the National Trust for Historic Preservation. "This bipartisan legislation will make the historic tax credit easier to use, and expand its impact on Main Street and in economically disadvantaged areas. We urge the Senate to follow the leadership of Senators Cardin and Collins by cosponsoring this important bill."
Since their creation, these tax incentives have leveraged more than $106 billion of private-sector investment ($5 of private investment for every $1 of HTC) to preserve and rehabilitate more than 38,000 historic properties, including the creation of over 185,000 housing units, of which more than 75,000 are low and moderate-income units. According to the National Trust for Historic Preservation, since 2002, more than 75 percent of all HTC projects have been located in neighborhoods with family incomes below 80 percent of the area media. Historic preservation programs have created more than 2.35 million jobs nationwide since 1978 (57,783 new jobs in FY12).
In Maryland, $234 million in federal historic tax credits have leveraged $1.4 billion in rehabilitation expenditures on 370 projects since 2001. They have created more than 19,000 jobs from 2001 to 2012. Some of these projects include:
· The American Brewery Building in Baltimore, a $24 million development that received $5.3 million in HTC and New Market Tax Credit. The rehabilitation of the building created 157 construction jobs and 175 permanent jobs.
· CASA de Maryland in Hyattsville, which received $1.4 million in federal HTC equity (total funding cost of $10 million).
· The Tidewater Inn, located in Easton, received nearly $1.2 million in federal HTC funding to leverage renovations totaling more than $5.9 million.
· The Francis Scott Key Hotel in Frederick was refurbished as affordable housing utilizing $1.67 million in federal HTC funds ($8.35 million total project cost)
· Klotz Throwing Company Mill in Cumberland, once the last silk mill remaining in the U.S., is being redeveloped as affordable housing with the help of $1.5 million in federal HTC funding. ($7.5 million total project cost)
The Creating American Prosperity Through Preservation (CAPP) Act (S. 1141) would:
· Help smaller projects by increasing the credit from 20 percent to 30 percent for projects with $5 million or less in Qualified Rehabilitation Expenditures. The increase in the credit amount will aid the financing for rehabilitation of small buildings and buildings in rural areas.
· Index the date for the 10 percent credit for non-historic older buildings so more are eligible for rehabilitation.
· Support the 30 states that have enacted state historic tax credits by encouraging the development of historic properties. The bill would eliminate federal taxation of the proceeds of state credits transferred through partnerships and sold as state tax certificates.
· Promote energy-efficiency and operating cost-savings by encouraging developers to use energy-efficient technology.
· Facilitate the reuse of older buildings by nonprofits, creating projects with high community benefit, while also stimulating on-going job and economic growth in low-income, underserved areas.
To qualify for the HTC, properties must be income-producing and must be rehabilitated according to standards set by the Secretary of the Interior. Currently, the HTC provides 20-percent credit for the rehabilitation of a certified historic structure, plus 10 percent credit for older, non-historic buildings first placed into service before 1936.