Rep. Warren pushes for extension, expansion of historic tax credits
SALISBURY — The sunset of the state’s historic tax credit is coming, but lawmakers are advocating to extend and expand it to encourage the rehabilitation of historic structures.
Rep. Harry Warren, R-76, has helped introduce a bill to extend the Historic Rehabilitation Tax Credits Investment Program, which is set to expire on Jan. 1. Rep. Stephen Ross, R-63, is the first primary sponsor of the bill — H.B. 399. Reps. John Bell, R-10, and Jay Adams, R-96, are also primary sponsors. The bill has bipartisan support and nearly 50 co-sponsors.
The bill would extend the expiration of the tax credits to property placed in service up until 2038. It also would increase qualified rehabilitation expenditures to as much as $25 million.The credits would not be awarded until after the project is complete. This addition will allow the program to extend to mill projects, which are located in downtown communities across the state, Warren said.
According to a 2018 report from the N.C. State Historic Preservation Office, the historic rehabilitation tax credit has provided $2.57 billion in investment for 3,655 projects across the state.
According to Salisbury City Councilwoman Karen Alexander, the extension could also benefit projects like the Empire Hotel rehabilitation.
“It will save the project we’re already in,” Alexander said.
In other towns that have mills, she says, downtowns languish if the mills languish.
Alexander traveled to Raleigh last week to advocate for the bill on behalf of the North Carolina League of Municipalities.
Warren said the tax credit bill sends a signal that the General Assembly values and appreciates the cultural and economic value historic properties bring to North Carolina municipalities. The bill would encourage historic property investors who might be hesitant as the credits near expiration, Warren says. Without the extension, projects starting in 2019 would likely die off, since the developers would not be able to receive tax credits.
Alexander said the historic tax credit is important to get developers to take the financial risk of rehabbing an historic property.
“It’s truly a way to test if someone deserves it or not,” Alexander said.
After one historic rehabilitation project is completed, other developers may be encouraged to take a risk, something she has seen with The Plaza in downtown Salisbury.
Alexander says she sees others piggy-backing with historic rehabilitation after the completion of the Empire Hotel.
The bill will also encourage towns that have been impacted by disasters, like Hurricane Michael and Hurricane Florence, to invest in historic rehabilitation. The bill includes a disaster relief bonus for historic structures in disaster areas if the project is done no more than fives years after the natural disaster.
If the bill only extended the deadline, Warren said he believes it would easily pass the House and Senate. With the expansion of the program, he is still optimistic, saying the bill is not too far of an economic reach.
“I have a very positive outlook for this bill,” Warren said.
Alexander said she and other board members of the League of Municipalities will continue to advocate for the bill as it goes through the General Assembly.
The bill was introduced on March 21 and has been referred to the Commerce Committee.
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