We join local leaders in expressing relief over the fact the Federal Historic Preservation Tax Incentives Program survived within the tax bill passed by Congress this week.
Through the program, a 20 percent income tax credit is available for the rehabilitation of buildings determined by the Interior Department, through the National Park Service, to be “certified historic structures.”
Doing away with the program, administered by the National Park Service and Internal Revenue Service in partnership with state historic preservation offices, was part of the proposed original House tax reform bill; the proposed original Senate tax reform bill retained the program, but reduced the credit by half.
The final tax bill, approved by both chambers on Wednesday, preserves the 20 percent credit - albeit with one change. In the past, developers could claim the entire tax credit in one year. Moving forward, developers will be required to claim the credit over five years.
We would have preferred no changes to the federal historic tax credits program, but we view the final decision as a victory for our community nonetheless.
Between 2002 and 2016, according to the Sioux City Economic Development Department, federal historic tax credits were used for $60 million in Sioux City redevelopment projects, including the Orpheum Theatre, the former Martin Hotel building, the former Central High School, Municipal Auditorium, the Williges building and several Historic Fourth Street structures. This year, developers have announced plans to seek federal historic tax credits for additional high-profile projects, including renovation of the former Warrior Hotel building, the Davidson Building, the Commerce Building, a building most recently occupied by Hatch Furniture and the former Methodist Hospital building. Those planned projects represent more than $100 million in capital investment, according to the city's Economic Development Department.
In all likelihood, those projects don't happen without federal historic tax credits.
We can't fathom why this program was targeted for elimination by the House and a significant cut by the Senate in the first place because its value - to communities, states and the nation - is proven by the return on investment it provides. Consider these numbers, provided by Sioux City's Economic Development Department:
* A total of 257 Iowa projects reflecting more than $1 billion in total development costs received federal historic tax credits between 2002 and 2016. Those projects created more than 19,000 construction and permanent jobs.
* Since it began in the late '70s, the program preserved more than 42,000 properties, leveraged nearly $132 billion in private investment and created more than 2.4 million local jobs in communities across the country.
* To date, the program produced $1.20 to $1.25 in revenue to the U.S. Treasury Department for every dollar invested. (according to the National Trust for Historic Preservation, $25.2 billion in federal historic tax credits have returned $29.8 billion in federal tax revenue.)
All federal programs should be so successful.