Just a few years after the state and federal government were aligned in creating perhaps the best environment for historic preservation in history, the historic preservation tax credits critical to financing such deals again are threatened with elimination. As part of a massive overhaul of the federal tax code pushed for by President Donald Trump, federal historic preservation tax credits would be eliminated. The U.S. House of Representatives version of the tax bill, expected to be voted on as early as Thursday, would completely eliminate the credit, while the Senate version would reduce the 20 percent credit to 10 percent.
Developers can receive the federal income tax credits for 20 percent of any eligible project costs to redevelop any historically-designated properties. Since 2014, they have been able to pair the 20 percent federal credit with a matching 20 percent state credit. Developers then use the credits themselves or sell them for less than their stated value. The credits are a critical piece of financing projects that would otherwise be economically unfeasible compared to building new structures on empty sites.
Despite being sought for cuts by Republicans in both Washington D.C. and Wisconsin, the federal historic preservation tax credit program was created under Republican President Ronald Reagan in 1982. In 1984 Reagan said “Our historic tax credits have made the preservation of older buildings not only a matter of respect for beauty and history, but of course for economic good sense.” Wisconsin added a supplemental five percent credit in 1990, when Republican Tommy Thompson was governor, and increased it to a matching 20 percent credit in 2014. To the surprise of many, devoted Reagan-follower Gov. Scott Walker,who signed the 2014 hike, did a turnaround and drastically cut the credit in September in one of the 99 partial vetoes he made to the state budget.
Architects, developers and designers gathered Tuesday afternoon at the restored Pritzlaff Hardware complex to discuss the fate of the credits and plans for action. UWM Professor and city Historic Preservation Commission chair Matt Jarosz led the event.
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This article was originally published in Urban Milwaukee by Jeramey Jannene.