Historic tax credits key to rebuilding communities
Historic tax credits key to rebuilding communities
For urban core communities in Rhode Island like Pawtucket, restoration of the State Historic Tax Credits program is a needed catalyst to help recharge our economic engines. For several decades, Pawtucket and other similar urban communities in our region have witnessed an outward migration of manufacturing jobs toward cheaper labor and newer facilities elsewhere. Our city's historic downtown similarly saw a net out-migration of retail with the advent of suburban malls and megamalls such as the one in Providence.
Those demographic changes left us searching for innovative new uses for the wealth of historic but often underutilized or vacant commercial properties and mills throughout our community. The question was not merely what to do to revive these wonderful structures but how to attract the typically costly and extensive redevelopment and reinvestment required to restore them to productive economic use, and find new tenants to fill them.
We began having success a decade and a half ago in Pawtucket with the creation of our Arts & Entertainment District in the downtown and riverfront sections of our city. With authorization from the General Assembly, artists, artisans and other creative professionals were offered sales and income tax incentives to live and work in the district and began streaming into our downtown. But for the bigger projects - the redevelopment of our larger mill buildings - more assistance was needed. That help came in the form of the State Historic Tax Credits program.
For Pawtucket, we found that mill redevelopment projects, funded by state and federal historic tax credits, were important on many levels: for historic preservation, quality of life, public safety, economic development and the expansion of the city's tax base. With Pawtucket already 95 percent developed, vacant land for new manufacturing plants can rarely be found. What we are fortunate to have are a substantial number of mills and other historic properties at a time when such commercial stock has become more and more valued by both developers and tenants.
One outstanding example of how the previous State Historic Tax Credits program attracted developers to our community is the former Lebanon Mill across the Blackstone River from City Hall. Underutilized, it was valued at $1,029,800 for annual city tax revenue of $25,271.
Redeveloped as Riverfronts Lofts, a 55-unit, $21 million upscale condominiums project backed by historic tax incentives, the property is now valued at more than $10.3 million and this year will contribute $238,742 in property tax revenues. That's a remarkable increase of 944 percent.
Similarly, the Parkin Yarn mill just west of downtown had stood vacant for more than 20 years while one proposed developer after another failed to secure financing. Thanks to the historic tax credits, the old mill became Bayley Lofts, with 25 units including five set aside as affordable housing. Tax revenues went from $3,882 to $108,047 annually, an amazing increase of 2,783 percent, and the building's value has gone from $156,000 to more than $4.6 million.
State Historic Tax Credits also fueled one of the largest and most exciting projects that Pawtucket had seen in years. A California-based developer purchased the former Hope Webbing mill complex and spent $15 million transforming it into a self-contained artists' village with light manufacturing for artisans, commercial office suites and loft-style living spaces for artists. Hope Artiste Village now houses over 80 small businesses including Seven Stars Bakery, Mixed Magic Theatre, art galleries, the Met (one of the largest music venues in Rhode Island), and the Winter Farmers Market. The developers are now entering the next phase with construction soon to start on 149 residential rental units.
Without the crucial support of the prior State Historic Tax Credits program, until its active continuation was basically suspended in 2008, it is safe to say that none of these major projects for Pawtucket would have ever gotten off the ground.
Looking forward, a private, nonprofit developer would use the restored tax credits to help renovate the 92-year-old former Old Colony Bank building on Main Street, vacant for more than 15 years, in a $4 million mixed use project.
We should also remain mindful that the clock continues ticking if we are to preserve and revive the legacy of historic structures that dot our urban landscape throughout the state. Once vibrant mills that are vacant or underutilized are not only economic sinkholes but also become fire hazards waiting to ignite. We saw that in Pawtucket when a fire of undetermined origin destroyed the massive Greenhalgh Mill in November 2003, also destroying 16 homes, injuring nine residents and 17 firefighters and devastating an entire neighborhood.
There is little doubt that the prior program, which admittedly required some fine-tuning, has been an economic development tool virtually second to none for urban core communities. Its prior success should not now be held against it. Hopefully, the Rhode Island General Assembly will see the wisdom of renewing and giving communities this proven development tool to restore historic properties, create jobs and new places to live and work, while also preserving our historic heritage for many more generations to come.
Donald R. Grebien
Mayor of Pawtucket