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Historic Preservation Makes Economic Sense

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by

Chris Duprey

on 29 August 2016

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Transcript of Historic Preservation Makes Economic Sense

Utilizing State and Federal Historic Tax Credits

Julie Carmelich, CT SHPO, Historic Rehabilitation Tax Credit Administrator
Nina Caruso, Crosskey Architects, Historic Tax Credit Consultant
Speakers:
Why do people utilize state and federal tax credits?

1. We care about our architectural heritage


2. We need to leverage project financing
NATIONAL REGISTER CRITERIA FOR EVALUATION

Criteria for Evaluation

The quality of significance in American history, architecture, archeology, engineering, and culture is present in districts, sites, buildings, structures, and objects that possess integrity of location, design, setting, materials, workmanship, feeling, and association, and:

A. That are associated with events that have made a significant contribution to the broad patterns of our history; or

B. That are associated with the lives of significant persons in our past; or

C. That embody the distinctive characteristics of a type, period, or method of construction, or that represent the work of a master, or that possess high artistic values, or that represent a significant and distinguishable entity whose components may lack individual distinction; or

D. That have yielded or may be likely to yield, information important in history or prehistory.
What makes a property eligible?
Seven Aspects of Integrity
&
Tax Credit Percentages
Eligible Costs
Program Caps
How Tax Credits Are Used
Program Requirements
Acceptable New Uses for Buildings
Federal

In order to obtain the tax credit, the property must be listed on the National Register of Historic Places
Must meet the IRS definition of "substantial"
The rehabilitation must be"certified." A certified rehabilitation is a completed project that is approved by NPS as being consistent with the historic character of the property and meeting the Standards for Rehabilitation
State

Must be listed on the National or State Register of Historic Places
"Qualified rehabilitation expenditures" meet the statutory definition of "substantial." Substantial rehabilitation means the qualified rehab expenditures exceed 25% of the assessed value prior to the start of construction
all work must comply with the Secretary of the Interior's Standards to Rehabilitation
Federal

Any income producing use
Can not be an owner-occupied residential property
State


Residential use of five units or more
Mixed residential and nonresidential use
Nonresidential use consistent with the historic character of such a property
Federal

20% of total qualified rehabilitation costs
10% for some non-historic properties built before 1936
State

25% of total qualified rehabilitation costs
30% if the project includes 20% of affordable rental or 10% of affordable for-sale units
Federal

Rehabilitation hard costs, A/E and site survey fees, legal expenses, development fees, and other construction-related costs
Excludes new additions and site improvements
State

Rehabilitation hard costs & additions required by code
Excludes:
Non-code additions
Owners labor
Site improvements
A/E, legal and financing fees
State

$4.5 million tax credit reservations available per project
$31.7 million in tax credit reservations are available each fiscal year
Federal

None
State

Used for the tax year in which the building is placed in service or can be phased; five year carry-forward
Vouchers issued when work is complete
Owner not required to hold the property
Tax credits can only be used by C corporation with tax liability
Tax credits can be assigned, transferred or conveyed in whole or in part by the owner to others up to three times
Federal

Credits can only be used by individuals or business firms that have ownership standing in the property
If the owner does not hold the building for five years after completing the rehabilitation, the tax credits are subject to recapture
Comparing the State and Federal Tax Credit Programs
UP TO
50
50%
OFF
Evaluation of Significance
Determination of Historic Structure Status
The Application Process
Federal
State
1
1
2
2
3
3
4
5
Description of Rehabilitation
Request for Approval of Proposed Rehabilitation Plan
Request for Preliminary Certification and Reservation of Tax Credits
Request for Certification of Completed Work
Request for Final Certification of Completed Rehabilitation
Request for Issuance of Tax Credit Voucher
National Park Service
Amendment
All work must comply with the Secretary of the Interior's Standards for Rehabilitation. These concepts include:
A property shall be used as it was historically, or given a new use that requires minimal change
The historic character of a property shall be retained and preserved
Each property shall be recognized as a physical record of its time, place, and use. No falsification of history.
Respect changes over time
Preserve distinctive features
Repair rather than replace
Avoid destructive treatments
Archaeological resources will be protected
New additions will not destroy historic fabric
New additions should be able to be removed without impairing the integrity of the historic property
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&
Location
Design
Setting
Materials
Workmanship
Feeling
Association
Hands on Hartford
Community Center & Boiler House Apartments
Full transcript