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“Lobbying Congress on the Historic Tax Credit Just Got Easier” — article by John Leith-Tetrault in Novogradac & Co.’s Journal of Tax Credits

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“Annual Historic Tax Credit Report Shows Positive Market Trends” — article by John Leith-Tetrault in Novogradac & Co.’s Journal of Tax Credits

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“Jackson’s Farish Street Project Makes the Case for Protecting the Federal HTC” — article by John Leith-Tetrault in Novogradac & Co.’s Journal of Tax Credits

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NTCIC has been awarded a $40 million New Markets Tax Credit (NMTC) allocation by the CDFI Fund of the U.S. Treasury  to support community development projects in low-income areas throughout the U.S. NTCIC will use its allocation to help finance the rehabilitation of vacant or underutilized historic buildings to bring jobs, tax revenue, goods and services to low-income neighborhoods.

The NMTC program provides significant incentives for investments in traditionally hard-to-finance projects. Over a period of seven years, the program rewards investors with tax credits totaling 39 percent of the total financing for select projects in qualified communities. The Department of Treasury has awarded $3.6 billion to 70 organizations nationwide under the 2011 NMTC program. NTCIC was selected from an unprecedented pool of 314 applicants who applied for more than $26.7 billion in NMTCs.

The New Markets Tax Credit and the Historic Tax Credit (HTC) are natural allies. Low-income communities are defined as U.S. census tracts with at least a 20 percent poverty rate or household median incomes at or below 80 percent of the area or statewide median, whichever is greater. 40 percent of all U.S. and most central business district census tracts qualify for the NMTCs. Because most older buildings are found in disinvested parts of cities and towns, and most HTC projects are located in central business districts, historically 68 percent of all HTC Part 3 approvals were granted to properties in qualified NMTC census tracts. NTCIC has been awarded $383 million in New Markets Tax Credit allocations since 2003. To learn more about the types of projects NTCIC has invested in and their  impacts on communities, please click here.

Historic tax credit (HTC) transactions have experienced very low rates of recapture, according to the recently released “Historic Rehabilitation Tax Credit Recapture Survey,” commissioned by the National Trust for Historic Preservation and produced by Novogradac and Company LLP. The study to determine the frequency and amount of recapture that investors have experienced with the HTC was conducted by surveying of a group of historic tax credit investors that have made significant investments; collectively, the survey’s respondents have invested in more than 50 percent of the HTCs claimed during the past 10 years. Survey respondents report experiencing a historic tax credit recapture rate of less than three-quarters of one percent over the past 10 years. The survey results are further supported by an analysis of the information obtained from the Internal Revenue Service, which reflects an annual historic tax credit recapture rate of 0.07 percent for 2008.

“Historic Tax Credit Recapture Study Supports Continued Exemption from Volcker Rule“— article by John Leith-Tetrault in Novogradac & Co.’s Journal of Tax Credits

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Written by Erica Stewart

February 6, 2012 was a big day for fans of skilled jobs, green building and community revitalization through historic preservation. Yesterday, Senator Ben Cardin (D-MD) announced that he, along with Senator Olympia Snowe (R-ME), would introduce new Senate legislation that would encourage historic rehabilitation in Main Street communities, promote energy-efficiency in rehabilitation projects, and make the credit more accessible to nonprofit organizations. This legislation was introduced in the House last summer, and achieving Senate introduction was the next big milestone for the National Trust and its allies.

Senator Ben Cardin (D-MD) speaking at the historic Clifton Mansion in Baltimore. (Photos: Eli Pousson, Baltimore Heritage)

The new legislation, the Creating American Prosperity through Preservation (CAPP) Act, would make an already powerful federal historic credit even more so. Over 32 years, the credit has created 2 million jobs; saved 37,000 historic warehouses, factories, and schools; and attracted $90 billion to local economies.

Senator Cardin made his announcement at a press conference at historic Clifton Mansion, which now houses Civic Works, a nonprofit that helps young people prepare for the workforce. The mansion, located in a low-income section of northeast Baltimore, is a poster child for how historic preservation, green energy and community development can intersect – with the federal historic tax credit being the catalyst. Civic Works’ Executive Director Dana Stein talked passionately about how the historic tax credits will make possible the mansion’s $7 million makeover, which will seek LEED Gold certification (a great goal considering their current $17,000 monthly energy bill).

More hard work lies ahead for the National Trust and its allies. Now that both bills have been introduced, our attention will turn toward getting members of Congress on board as co-sponsors. Despite its track record of job creation and community revitalization, the impact of the federal historic tax credit is not widely understood.

In the words of National Trust president Stephanie Meeks, the historic tax credit is simply too important to lose. We will be working hard to educate lawmakers about the power of the federal historic tax credit and the importance of the CAPP legislation. And we’ll need your help.

To join our effort, please take a minute to sign our pledge to help protect and enhance the historic tax credit. 

Erica Stewart is the outreach coordinator for the National Trust for Historic Preservation’s Public Affairs department.

Watch Senator Cardin in action talking about the CAPP Act at Baltimore’s historic Clifton Mansion:

FOR IMMEDIATE RELEASE

CONTACT: Susan Sullam, 410-962-4436 or

410-960-2440 (cell)

February 6, 2012

CARDIN SPONSORS BILL TO CREATE JOBS BY MAKING IT EASIER TO RESTORE

 HISTORIC PROPERTIES

Bill Would Increase Number of Restoration Projects and Reward Energy-Efficient Improvements

WASHINGTON – U.S. Senator Ben Cardin (D-MD) today introduced bipartisan legislation that would create jobs in Maryland and the nation through the restoration of historic buildings.  Senator Cardin unveiled the legislation at Baltimore’s historic Clifton Mansion, once the summer home of Johns Hopkins and now the headquarters for the AmeriCorps program Civic Works.  U.S. Senator Olympia Snowe (R-ME) is co-sponsoring the bill.

“I am extremely proud of this bill because it will help ensure that historic properties are restored and made useful once again, while creating jobs that will stimulate greater economic activity,” 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 new jobs in renovating historic properties.”

“The federal Historic Tax Credit program is a great instrument for renovating historic buildings such as the Clifton Mansion.  Senator Cardin’s legislation will expand the impact of the tax credit to many more historic properties,” said Dana Stein, Executive Director of Civic Works.

“The federal historic tax credit has proven to be a cost-effective creator of jobs and economic activity for more than thirty years,” said Tom Cassidy, vice president of Government Relations and Policy at the National Trust for Historic Preservation. “The CAPP Act will ensure that, in the future, more “Main Street” communities can benefit from its revitalization effects, and nonprofit organizations can more easily access the credit to bring jobs and services to disinvested areas.”

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.

Since their creation, these tax incentives have leveraged more than $90 billion of private-sector investment ($5 of private investment for every $1 of HTC) to preserve and rehabilitate more than 37,000 historic properties, including the creation of over 185,000 housing units, of which more than 75,000 are low and moderate-income units.  In the process, such historic preservation programs have created more than 2 million jobs nationwide since 1978.  In Maryland, the tax credit created more than 18,700 jobs from 2001 to 2011.

In Maryland, $228 million in federal historic tax credits have leveraged $1.1 billion in rehabilitation expenditures on 352 projects since 2001. Some of these projects include:

• CASA de Maryland in Langley Park, which received $1.4 million in federal HTC equity (out of a total funding cost of $10 million).
• 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.
• Clifton Mansion, headquarters of the AmeriCorps program Civic Works, will be using $1.1 million in federal HTCs as it undergoes a $7 million renovation.

The Creating American Prosperity Through Preservation (CAPP) Act 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 to encourage the development of historic properties by eliminating the 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.

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Dear Friend of Historic Preservation,

In his State of the Union Address, President Obama laid out a plan for an economy that’s “built to last” — one that revolves around “American manufacturing, American energy, skills for American workers, and a renewal of American values.”

We’d like to offer the perfect complement to that vision — a program that for more than thirty years has quietly and effectively created skilled American jobs, stimulated local economies, and revitalized historic buildings and communities built to last. This program is the federal historic tax credit.

Pledge your support today for this vital economic program, and help communities prosper through preservation.

You may never have heard of it, but you’ve seen what it can do. Consider Boston’s Faneuil Hall, the Ferry Building in San Francisco and the Apollo Theater in New York City. These iconic structures and 37,000 others were rehabilitated with the help of the historic tax credit — generating 2 million jobs, attracting $90 billion in private investment, and revitalizing communities nationwide in the process.

The best part? This program more than pays for itself. In the 32 years of the program, the amount of tax credits paid by the U.S. Treasury is far less than the amount of federal taxes generated by these projects.

The worst part? The federal historic tax credit is now in danger. Tax reform on Capitol Hill threatens to reduce or even eliminate this powerful economic development tool.

Now is not the time to cut programs proven to create jobs. We need you to join our campaign to raise awareness of the impact of historic preservation. Take our pledge and join our fight to help our communities prosper through preservation and keep the federal historic tax credit off the chopping block.

Thank you,

Your Friends at the National Trust for Historic Preservation and NTCIC