The Louisiana Special Legislative Session has ended with a big win for downtowns and the preservation of commercial historic buildings statewide. By a unanimous vote of the House, and near-unanimous in the Senate (three ‘no’ votes, no local senators), the important State Historic Tax Credit (HTC) was extended until January 1, 2026.
What that means is that owners of ‘contributing’ historic commercial properties in Downtown Development Districts and Cultural Districts across the state can apply for HTC’s which will be available for 20% of all qualified costs of building rehab.
A cap on HTCs was added at $125m per year. Any amount of the cap not used in a calendar year will roll over the the next year.
This is a huge victory for downtown Shreveport, where all assistance in returning often neglected historic properties to commerce is needed. Over the years, HTCs have played an important role in the rehabs of such properties as the Lofts at 624, The Standard, the Ogilvie Hardware Lofts, artspace, the Municipal Auditorium, and more. Currently, HTCs are providing assistance in work at the Andress Art and Entrepreneur Center, Every Man a King Distillery, Ridgeway Square and Uneeda Biscuit Lofts.
***If you would like more information on HTCs, how they work and which buildings might qualify in downtown Shreveport, please contact the DDA at 222-7403 and ask for Liz or Janie.
Story Posted June 25, 2020
First, thanks to ALL who have been peppering legislators with emails and texts of support. We couldn’t do it without you!
Here’s this week’s latest on the ongoing fight for state Historic Tax Credits (HTC). HB4, the HTC bill we strongly support, was overwhelmingly approved this week by the Senate, but at the last moment, a damaging amendment was added. A statewide consortium of historic preservationists, property owners, developers, Downtown Development Authorities, Main Street organizations and others are working to have this amendment removed in conference committee.
Continued outreach to legislators is extremely important and we will continue to update you on happenings on our Facebook page and via emails.
Since 2002, The LA HTC has led to the rehabilitation of 1,322 buildings throughout the state, totalling $4B in private investment in Louisiana’s historic downtowns and Cultural Districts. In downtown Shreveport, we can point to multiple projects that would NOT have been done without this small amount of financial help, projects such as the Ogilvie Hardware Lofts, The Standard 509 Market, the Lofts at 624 Texas. Artspace, Robinson Film Center, Municipal Auditorium, the Shreve Memorial Library, and other buildings were helped significantly by them. Projects that are underway are also depending on the credits- the Uneeda Biscuit Lofts conversion, Every Man a King Distillery( old Arlington Hotel), the Andress Artist and Entrepreneur Center(old Andress Ford) and others. HTC are the best tool that we currently have in downtown Shreveport to save, rehabilitate and bring life, jobs and opportunities back to historic- and often challenged- buildings.
Story posted Thurs., June 18, 2020
The Louisiana Legislature is once again taking up the Commercial Historic Tax Credit. At a meeting on Thursday, June 18, the members of the Senate’s Revenue & Fiscal Affairs Committee adopted a number of amendments that we believe will seriously compromise the effectiveness of the tax credit. They:
1. Changed the extension date from January 2028 to January 2023 – This is going to give the developers less certainty that they would be able to complete projects in time to receive the credits.
2. Changed to 10% credit for Part I applications on or after July 2020. – This may change the financial feasibility of some projects.
3. Added a $75 Million annual cap. No more than 50% of annual cap can be designated to one region (unless there is unclaimed money available) – This would make large scale projects more difficult to do.
4. 10% tax credit if actual eligible costs and expenses are between 75-125% of estimated costs set forth in Part 2. If actual cost is 75% or below estimate cost the credit would not be allowed. – This is to try and keep developers from overestimating their costs in order to get a larger percentage of the designated cap.
All together, the amendments make a developer’s ability to restore buildings less financially feasible. The sunset of the credit in 2023 would make the process and future less predictable and stable.
These amendments now have to be reconciled with the house version and signed by the Governor, so there are more opportunities (hopefully) for some positive changes.
Louisiana is one of at least 35 states that offer building owners and developers a Commercial Historic Tax Credit. The tax credit is tremendously important in making the dollars and cents of historic renovation work. Older buildings, especially those that have been vacant for some time, are expensive to rehabilitate. Without this tax credit, the risk is too great. Many developers would walk away from proposed projects and those buildings would either continue to sit idle or be woefully under-utilized.
Vacant buildings generate no jobs, no sales taxes, little property taxes and are a burden on the municipality that has to secure them for health and safety reasons. Vacant older buildings are magnets for transients, trash and deterioration, and negatively impact the value of the buildings around. Nearby properties become harder to sell, and when they do, prices are generally lower. Those lower sale prices then become part of the market comps and can drive down overall property values as a result.
How the Louisiana Historic Tax Credit Works
The tax credit was first enacted in Louisiana in 2002. A large group of downtown property owners, Realtors, developers, city and parish officials and others are asking for both protection for the credits and an extension in the sunset date to 2028 in this Special Legislative Session. This effort is bi-partisan and statewide. Without the extension, many rehab projects will stop.
If an approved historic building is rehabbed to the standards set forth by the State Historic Preservation Office (SHPO) and then approved by the Department of Revenue, the building owner will receive credits based on the ‘qualified cost’ of the project. This credit is not cash from the state. It can be used as a credit on future tax payments to the state, or can be sold to others who need tax credits for cash to apply towards their tax liability. They are only good for a five year period.
Who Will Be Affected Locally by the Loss/Limit of the Tax Credit?
We all will. Realtors and brokers who sell the buildings, mortgage brokers and banks who help put the deals together, building owners, cities, parishes, the school board and all entities that receive taxes and benefits from renovated buildings, the Downtown Development Authority and Chambers of Commerce that are trying to spur economic development, and citizens that are denied the jobs and opportunities that come with renovated properties.
Downtown Shreveport is just one of the towns and cities across the state to benefit from HTC. Shreveport projects helped by the credit include (this is not an entire list): the Standard, the Lofts at 624, the Ogilvie Hardware Lofts, Eatel Systems (old Selber Bros), United Jewelers and Lee Hardware Apartments, 601 Spring Street, Artspace, Municipal Auditorium, 416 Cotton Street, 229 Milam Street, Ridgeway Square, Robinson Film Center, 1010 Marshall Street, The Strand Theatre, Shreve Memorial Library, and more. Current projects include: Uneeda Lofts, Andress Artists and Entrepreneur Center, and Every Man a King Distillery.
Benefits of the Tax Credit Program Include:
- The State Historic Rehabilitation Act is unique in that it transforms dilapidated aging structures into productive historic buildings
- Cleans up neighborhoods and downtowns
- Creates jobs
- Stimulates tourism
- Preserves Louisiana culture and history
- Significantly increases the tax base
What You Can Do to Help Protect the Historic Tax Credit
Please continue to let your state and federal legislators know that you support state and federal historic tax credits.