Historic Tax Credits
Adaptive reuse projects are among the most complex real estate deals—challenging not only technically, but financially. The cost of renovation often makes financing nearly impossible, and in many markets, potential rents simply can't justify what it takes to rehabilitate a historic building. Historic tax credits can close that gap, making projects feasible while honoring what makes a building worth saving in the first place. The result is something a new build can never replicate: a space with real history, and the authenticity that comes with it.
What is Historic Preservation?
AN ECONOMIC DEVELOPMENT TOOL
Fueled by preservation incentives such as grants and tax credits, historic preservation projects bring new investment to older buildings and communities. Preservation projects are local-labor-intensive, on average generating higher construction wages than new construction and, as a nice by-product, higher local spending. As communities seek to replace lost industries, they should innovate and give historic preservation a long look – after all, it’s an industry that puts people to work and customers in the stores just by investing in local, often underutilized, assets.
PROMOTES SUSTAINABLE LIVING
The adaptive re-use of existing structures not only saves millions of tons of landfill each year, it also leverages the prior investment of energy (so-called “embodied energy”) in those structures and neighborhoods. The former benefit is illustrated by preservation economist Donovan Rypkema’s estimate that demolishing a small commercial building negates the positive impacts of recycling 1.3 million aluminum cans. While the latter benefit is illustrated by studies indicating that you would need to accumulate 40 years of energy savings from the efficiencies of a new “green” home in order to absorb the loss of the embodied energy from demolishing an older home of the same size. In short, community innovators recognize that “the greenest building is the one that’s already built.”
CLOSES THE “GAP” IN PROJECT FINANCING
In many older communities, the cost to rehabilitate older buildings outpaces the income that can be generated after completion. More commonly known as a “funding gap”, sponsors of these projects often cannot raise enough capital to make their rehabilitation project feasible. Unless, of course, the developer is innovative and invests in a building that is eligible for historic rehabilitation tax credits. In that case, the rehabilitated building will generate federal and (often) state tax credits that can be “syndicated” to corporate investors to help balance the project’s capital budget.
What we can help you with?
HISTORIC REHABILITATION TAX CREDIT APPLICATIONS
Please complete the following parts of the Historic Preservation Certification Application:
- Part 1: Evaluation of Historic Significance
- Part 2: Description of Rehabilitation Work
- Part 3: Description of Completed Work
TAX CREDIT PLANNING SERVICES
- Includes tax credit modeling, transaction structuring and project budgeting
PROJECT MANAGEMENT
- Coordination of design and construction professionals for historic projects
- Liaison to local, state, and federal preservation agencies and funding providers