Charleston Gazette-Mail: Bills Aim to Increase Tax Credits for Rehabbing Historic Structures

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By Elaina Sauber / Charleston Gazette-Mail

A bill under consideration during this year’s Legislative session would take a meaningful step in spurring millions of dollars in private investment among West Virginia’s towns, proponents say.

The one-page bill makes a small, but meaningful change to the state’s Historic Tax Rehabilitation Credit by raising it from 10 percent to 25 percent.

The result? A greater incentive for developers to acquire and redevelop historic buildings in towns and cities statewide.

The increase would make West Virginia’s tax credit consistent with Ohio and Virginia’s. Combined with the 20-percent federal historic tax credit, investors could see a 45 percent credit against their corporate or personal income taxes owed once a rehabilitation project is completed.

In the Mountain State, where finding flat land is often the first of many hurdles for prospective developers, the bill’s proponents say the historic rehabilitation market has the potential to breathe new life into West Virginia’s downtown areas.

Read the full story at www.wvgazettemail.com.

Historic Tax Credit Bills Introduced During First Week of Session

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During the first week of the legislative session, two bills to increase the current rate of the historic rehabilitation tax credit from 10% to 25% were introduced in the Senate. Majority Leader Ryan Ferns (R – Ohio, 01) introduced Senate Bill 238, and Senator Glenn Jeffries (D – Putnam, 08) introduced Senate Bill 323.

While both bills adjust the credit with respect to personal and corporate net income tax, the major difference between the two is that SB 323 includes a date after which the increased rate takes effect — only rehab projects started after June 30, 2017 would be eligible for the 25% credit.

Before West Virginia can increase its credit, SB 238 must pass through the Senate’s Economic Development Committee and Finance Committee, while SB 323 need only pass Finance.

Check out this infographic from the West Virginia Legislature to see the full journey a bill must undertake before it can become law.

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Senator Maroney (R – Marshall, 02), Economic Development Chair, put SB 238 on the Feb. 15th agenda. A number of supporters spoke before the committee. However, the committee moved to hold the vote until Feb. 22nd because SB 238’s fiscal note was not yet available.

If you’d like to show your support of the increased rate, join us during the Economic Development Committee meeting on Wednesday, Feb. 22nd, at 1:00 p.m. in the Senate Judiciary Room (208W).

Or follow along at home with the Legislature’s website.

For those of you wondering what’s going on in the House of Delegates, Delegate Erikka Storch (R – Ohio, 03) introduced HB 2545, a companion House bill that was referred to the House Committee on Finance. As it’s currently written, the legislation would only adjust the credit with respect to the corporate net income tax and would not include personal income tax.

If you’d like to track any of the bills to increase the historic rehab tax credit, the Legislature’s website provides a few different ways. You can manually search for the bill number or set up an automatic bill tracker by submitting your email address.

And don’t forget to bookmark the Revitalize West Virginia Downtowns blog! As soon as I get word, any bill status updates and media surrounding the campaign will be posted.

Many thanks for your interest and energy.

If you have any questions about the proposal or would just like to talk more, be sure to get in touch.

Historic Masonic Temple Available for Redevelopment in Fairmont

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An iconic landmark in Fairmont’s city center, the Masonic Temple was constructed in 1906 by Masonic Lodge Number Nine—and no expense was spared in the construction of the five-story, terracotta building.

Once an economic driver for the community—housing a U.S. Post Office, Ross Furniture, Pierson’s Print Shop, Webster College, and a variety of offices and apartments at various times throughout its history—the Masonic Temple now sits vacant.

The City of Fairmont is seeking a developer up to the challenge of restoring the historic structure to its former grandeur. Robin Gomez, Fairmont’s City Manager, welcomes development proposals that would bring economic value to the community’s downtown.

In 2013, the City replaced the roof, and in 2015, it boarded up the windows with panels displaying works of art. While the Temple has suffered from years of neglect, the structural integrity of the building remains. If a developer is up to the challenge, the Masonic Temple could very well be restored to its former grandeur.

A full rehabilitation is estimated at $4 million, while the 2016 property value was just $220,000. This is where the importance of the state and federal historic rehabilitation tax credits cannot be stressed enough.

Because the building is listed on the National Register of Historic Places, any developer willing to restore the property could apply for state and federal historic rehabilitation tax credits, as well as and development grants through the West Virginia State Historic Preservation Office to make the project more cost-effective.

With West Virginia’s current historic tax credit rate of 10% and the federal historic tax credit rate of 20%, a potential developer would benefit from a reduction in their income tax liability equal to 30% of qualified rehabilitation expenditures. In this instance, a developer would receive a credit of $400,000 to reduce their state income tax and $800,000 to reduce their federal income tax. This leaves $2.8 million of the total $4 million in rehabilitation costs to come from additional sources.

However, if West Virginia were to increase the rate of its historic rehabilitation tax credit to 25%, a developer would receive a $1 million reduction in their state income tax, along with the $800,000 reduction in federal income tax. This leaves $2.2 million of the total $4 million in rehabilitation costs to come from additional sources.

A difference of $600,000 is enough to encourage a developer to consider a project in Fairmont versus Ohio, Pennsylvania, or Virginia—states that all have a 25% historic rehabilitation tax credit.

Thanks to a higher historic tax credit, these neighboring states have generated private investment, created short and long-term jobs, and increased local and state tax revenues. With a 25% historic rehabilitation tax credit, West Virginia will reap similar economic benefits.

To learn more about the campaign to increase the historic rehabilitation tax credit, please contact Nicole Marrocco.

If you’re interested in redeveloping the Masonic Temple, please contact Robin Gomez.

The Herald-Dispatch: Raising Historic Tax Credit Would Aid Economy

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By Alex Vence, Huntington City Council District 3

A local investors group’s idea of trying to attract 500 retirees to live in Huntington over the next several years has plenty of potential benefits to the city, if their vision pans out.

More people spending money here. Reinvestment in numerous historic buildings in the downtown, many of which are severely underutilized at the moment. An increase in tax revenue for financially strapped local governments. And more residents to help counter West Virginia’s declining population.

All of those results envisioned by the group called Retire Huntington, whose plans were detailed in Sunday’s edition of The Herald-Dispatch, could do much to boost the local economy.

But to help make their vision happen, investors Bob Childers, John Hankins, Alex Vence and Jeff Barnes say they need some help from the West Virginia legislature. Let’s hope that help is forthcoming.

Read the full story at www.herald-dispatch.com.

Bloomberg BNA: State Tax Credits for Historic Rehabilitation Are History in the Making

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Photo by Chad Cordell

By Jason Plotkin / Bloomberg BNA

In a recent musical retrospective piece, Drake exclaims “[w]e started from the bottom, now we’re here!” He reminds us how important it is to stop and think about how far we have come. In a similar vein, the Alabama, Virginia and West Virginia state legislatures are reviewing their historic rehabilitation tax credits with an eye to the future. Like Drake looks over his life and accomplishments in his song, these states are reviewing the purposes, goals and results of these credit programs as a way to measure their effectiveness and how far they have come.

Generally, historic rehabilitation tax credits provide taxpayers an incentive to purchase, restore and put historic properties to use. The goal of historic rehabilitation credits is often twofold: preserving history and creating jobs. Although the focus of these credits is usually on commercial property, historic rehabilitation credits are often times also available to individuals for personal residences. The federal government and about two-thirds of states offer a historic rehabilitation tax credit.

Read the full story at www.bna.com.

The Herald-Dispatch: Huntington Developers with Plans to Rehab Historic Buildings for Retirees Look to Lawmakers for Boost

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By Fred Pace / The Herald-Dispatch

HUNTINGTON – A group of local investors plans to launch a drive to attract 500 retirees to live in renovated historic buildings in downtown Huntington.

The vision of Bob Childers, John Hankins, Alex Vence and Jeff Barnes is that up to $50 million will be spent to upgrade up to 11 downtown structures, and pump up to $20 million annually into the economy if their initiative succeeds as planned. Childers, Hankins and Vence are local developers and Barnes is president and chief executive officer of the Barnes Agency, a marketing, advertising and public relations firm located in downtown.

They have founded a group called Retire Huntington, which has the goal of fueling the renovation of 425,000 square feet of space in multiple downtown buildings that would be eligible for tax credits because of their historic nature. Among the buildings they have identified are the Coal Exchange, Prichard, West Virginia Building and The Frederick, according to Childers.

“If we can attract 500 retirees over five years, this plan would provide $50 million in construction spending,” he said. “It will eliminate vacant second-story buildings as well as provide additional revenue to business, medical, bank wealth management, city, county and state revenues.”

Read the full story at www.herald-dispatch.com.

The Exponent Telegram: CORE Act Spurs Senator to Discuss Economic Strategy of Historic Tax Credits

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By Brittany Murray / The Exponent Telegram

CLARKSBURG — West Virginia legislators are pushing to revive the Creating Opportunities for Rural Economies (CORE) Act in the U.S. Senate and U.S. House of Representatives, in hopes to revitalize the state’s communities that have suffered from job loss in the coal industry.

“The CORE is simply a dedication of the existing New Market Tax Credit (NMTC) that started in 2000,” state Sen. Mike Romano, D-Harrison, said. “According to the legislation that’s being introduced, they want to set aside 5 percent of those credits to benefit rural communities.”

The bill was first introduced in 2016 by U.S. Sen. Shelley Moore Capito, R-W.Va., and state legislators are now getting behind the bill, as well.

Read the full story at www.theet.com.

The Fairmont News: Vacant School Undergoing Rehab to Become Affordable Senior Housing Thanks to Historic Tax Credit

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By John Mark Shaver / The Fairmont News

Nearly 10 years after closing its doors to students, Miller Junior High School will soon cater to another crowd, functioning as affordable housing for senior citizens.

The massive project has been taken on by the Sadd Brothers, Steve and Mark, in partnership with the Fairmont/Morgantown Housing Authority. The development aims to turn the school and its classrooms into 48 individual apartments, 26 two-bedroom and 22 one-bedroom, for the elderly.

“We’re utilizing low income tax credits and state and federal historic tax credits,” Steve Sadd, who, along with his brother Mark, oversees the project. “We’ve been working on this project for three years.”

The Intelligencer: Developer Advocates for a Higher Historic Tax Credit

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Photo by Lincoln Wolfe

By Alec Berry / The Intelligencer

WHEELING — At a forum held Wednesday inside downtown Wheeling’s Stone Center, a private developer told legislators, real estate owners, and local leaders that West Virginia needs to increase its historic rehabilitation tax credit to encourage new investment in vacant properties.

“This doesn’t cost the state any money,” Steve Coon, of Louisville, Ohio, claimed. “This is one of the few programs where the state gets all its money back in seven to nine years — all its money back. So nine years from now, you have a full building, people living downtown, the state has all of its money back … so its investment was just what it was — an investment.”

Alongside Coon, Michael Gioulis, a historic preservation consultant; Craig O’Leary, program director of the Regional Economic Development Partnership; and Jake Dougherty, executive director of Wheeling Heritage answered the questions of attendees intrigued by the effort to boost West Virginia’s credit from 10 percent to 25 percent.

Read the full story at www.theintelligencer.net.

The State Journal: Increased Historic Tax Credit Tops Wheeling Mayor’s Wish List

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By Linda Harris / The State Journal

From budget fixes to aging infrastructure, community leaders across West Virginia are hoping Democratic Gov. Jim Justice and the Republican-controlled Legislature will be able to put politics aside and find solutions for what’s ailing the Mountain State.

Justice, a pro-business, right-leaning Democrat, will have to work hand-in-hand with GOP leaders to figure out how to erase a $400 million projected deficit. Before leaving office, his predecessor proposed more budget cuts, along with a 1 percent increase in the state sales tax and elimination of the current sales tax exemption on telecommunications services.

Justice himself hasn’t ruled out a tax increase, even though he campaigned on a “no new taxes” platform.

Worried city and county leaders across the state want to see progress, not partisanship, over the next four years.

Read the full story at www.theet.com.