Renfro Lofts Condominiums sits at the corner of Virginia and Willow Streets in Mount Airy. The rehabilitation project turned a former tobacco warehouse into 37 condominiums.
RALEIGH — A reinstatement of the historic preservation tax credit is included in the state budget approved last week by state legislators.
Lawmakers let the tax credit, which will now provide for up to a 25 percent credit for improvements that are made to an income-producing certified historic building, sunset on Jan. 1. Since then a movement to reinstate the credit has been under way throughout the state.
Non-income producing historic structures are limited to a 20-percent tax credit on rehabilitation projects of $10,000 or more. In short, any project that is covered under the federal historic preservation tax credit will once again receive the state tax credit.
The restoration of the tax credit will result in an $8 million revenue loss for the state.
According to a self-identified non-partisan group that runs historictaxcredits.org, North Carolina’s historic tax credit spurred more than $1.5 billion in private investment in the state from 1998 until the program expired at the end of 2014. Now the program is back, and some local leaders are applauding lawmakers for reinstating the program.
Mount Airy Downtown Inc. Director Lizzie Morrison said the historic tax credit program was greatly beneficial for Mount Airy. According to information Morrison provided, the tax incentive was used in about 25 projects in downtown Mount Airy prior to its expiration at the end of 2014.
One project Morrison gave as an example included more than $200,000 in private investment for which the property owner received tax credit of about $30,000. According to Morrison’s figures that project will produce more than $400,000 in sales and payroll tax revenues for the state of North Carolina throughout the period of the next ten years.
Another project — and one Morrison called a “catalyst” for future redevelopment — was a project at what is now the Renfro Lofts Condominiums on Virginia Street.
“The project turned an old tobacco warehouse into 37 condominiums,” said Morrison. “There are now about 50 additional people living downtown.”
According to Morrison the Renfro Lofts project spurred additional development on Market Street, where she said people who live in the condominiums now shop. Additionally, Morrison said the Renfro Loft project has spurred development in part of the former Spencer’s property that is owned by local businessman Gene Rees.
“The historic tax credit supports the heart of the community — downtown. It creates incentive for property owners to rehabilitate property while keeping the character and architecture of the buildings,” explained Morrison.
Rees said there are some differences in the new tax credit program. For instance, non-income producing properties will only receive up to a 20 percent tax credit, as opposed to the former 30 percent credit.
Another key difference is that the credit is no longer phased-in throughout a five-year period. Now a property owner can receive the credit in full in the first filing period following their approved application for the credit.
Like Morrison, Rees thinks the credit plays a huge role in the redevelopment of a town or city. “You can look across the state and see downtowns that have been revived over the past 15 years,” said Rees, who added that those revivals are due, at least in part, to the availability of the historic tax credit.
According to Rees the credit can put a rehabilitation project that would otherwise not be economically feasible back on the table for a property owner.
“Sometimes with these older buildings the economics of redevelopment simply don’t work for a property owner,” said Rees. “The tax credit makes a project that would otherwise not be profitable possible. It preserves history while improving the economy.”
Rees said he has seen downtown Mount Airy revitalized throughout the course of the past couple decades. He said a town that once had empty store fronts now has no long-term vacancies, and Rees says that’s important for Mount Airy.
“A vibrant downtown makes the town show well,” said Rees. “That’s important for tourism and future economic development.”
By Andy Winemiller
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Andy Winemiller is a staff writer at The Mount Airy News. Andy can be reached at (336) 415-4698 or [email protected]
Andy Winemiller is a staff writer at The Mount Airy News. Andy can be reached at (336) 415-4698 or [email protected]
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