4.0 HPSR 04-14-2005 - Laserfiche WebLink

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Minnesota Historic Structure & Community Re-Investment Tax Credit Strengthening ~' Preserving Minnesota's Main Streets dam' Historic Placer A coalition of cities, historical groups, and property developers is actively promot- ing proposed legislation that would allow a credit on state income taxes equal to 25 percent of the qualified cost of a historic rehabilitation of residential or in- come-producing properties. The proposed legislation, similar to provisions in over 20 other states, would encourage private investment in historic properties in both urban and rural Minnesota, generating jobs and stimulating economic devel- opment within existing communities. How Does It Work? • Allows credit on state income taxes equal to 25% of the qualified cost of a historic rehabili- tation. • Parallels federal historic preservation 20% tax credit, creating more development opportu- nities in Minnesota. • Useful for both commercial and residential property, developers and homeowners. Fed- eral credit is for income producing properties only. Economic and Social Benefits • Creates jobs and economic activity far beyond level of tax credit. • Leverages more federal resources for the state. • Replenishes the tax base through new sales and payroll taxes and an increased tax base. • Complements the JOBZ program by providing a business stimulus in the historic areas of large and small towns across the 'state. • Creates affordable housing by ~ helping first-time and moderate income buyers through mortgage credit provision. Lender uses tax credit and lets owner buy down rate or reduce mortgage. ~ encouraging low-income rental housing when partnered with the federal low income housing More labor intensive than nesv tax credit. construction, rehab construction • Encourages private investment in derelict or under- strengthens the local employment base. used buildings in historic core neighborhoods and puts neglected properties .on the tax rolls at a higher value, stimulating more economic in- veSl~ileilt lit S41rTUl1ir3dirl~'aeas,.especiauy Oi3IYi~iffi SuG',itS a11d.11 1llStCT1<^. GJ:.iu %r~~ ~~1rr- dors. • Speeds redevelopment of long vacant buildings, returning them to income-producing and taxable status. • Limits sprawl, supports open space preservation & promotes environmental conservation efforts by concentrating on already developed areas. • Supports community identity efforts to capitalize on history and heritage as a tourism draw. In the state of Missouri, the cost of the credit vas recouped in . additional payroll taxes alone. Hotel Kadduta Artists Lofts, rergus r'alls Vacant for years Rehabbed in 2003 for $2.3 million