Officials: Return of historic credits big news for the city
Officials: Return of historic credits big news for the city
PAWTUCKET - Few communities will benefit more from the revival of the state's historic tax credit program than this one, say city officials, who are poised to jump on the chance to bring new life to old and decaying properties.
There are currently more than 50 properties in Pawtucket that could be eligible for historic tax credits, according to representatives for the Pawtucket Foundation, including several mill buildings with a range of possible future uses.
Dylan Zelazo, a director of constituent services and communications who was hired by Mayor Don Grebien last month to help with the city's economic development effort, said the administration is "very pleased" that the program was brought back after a years-long hiatus.
"It's an extra boost for possible development," he said.
According to Zelazo, city officials maintain a list of properties, some historic and others not "that we try to push" for redevelopment. That list was not immediately available.
An earlier version of Rhode Island's historic tax credit program helped reshape many of Pawtucket's older and often vacant industrial buildings into vibrant business and residential structures.
One of the biggest success stories from the previous program is the Design Exchange at 161 Exchange St., the home of LLB Architects across from Tolman High School and the Pawtucket Armory in the downtown. The four-story brick building was formerly the Rhode Island Cardboard Company but is now home to a number of design businesses.
According to the Rhode Island Division of Taxation, the state's historic tax credit program is reopening under a new name, and with a new set of rules. It is the result of a proposal introduced by Gov. Lincoln Chafee as part of his fiscal year 2014 budget. Resulting legislation was amended and passed by the General Assembly and signed into law on July 3.
"To further help our cities and towns, in my state of the state and budget address, I proposed modifying the historic tax credit program by providing access to abandoned tax credits," said Chafee in a statement, thanking the General Assembly for agreeing with the idea. "Through this initiative, Rhode Island's economic climate and financial health move forward and the tax burden on businesses begins to see some reduction."
The new program, involving "historic preservation tax credits," will be available, with certain limitations, to qualified applicants.
Rhode Island's historic tax credit program has generally been shut down since 2008. Certain projects were grandfathered and continue, according to the Division of Taxation. However, other projects have been "abandoned," leaving about $34.5 million in credits available but unclaimed as of May 15. It is those unused credits that will be available as of Aug. 1 to qualified applicants.
According to the Pawtucket Foundation, it is widely expected that the $34.5 million in available credits "will not last long," so officials are encouraging developers to act fast in getting their applications in.
The maximum project credit under the new historic credit program is $5 million. No building to be completed in phases or in multiple projects may exceed the maximum project credit of $5 million for all phases or projects involved in the rehabilitation of the building.
According to the Pawtucket Foundation, the state's historic tax credit program in operation until 2008 provided an "invaluable resource in the rehabilitation of mill buildings throughout the city. Estimates show that completed projects utilizing the credits increased in assessed value by an average of 728 percent, according to research done by representatives for the Pawtucket Foundation using the city's tax assessor database.
"Based on this proven success, it is clear that the revised program could play a significant role in both physical and economic development efforts," states the foundation in a press release promoting the credits. "For this reason, the Pawtucket Foundation worked with Grow Smart RI and other partners to support the reinstatement of the program."
The revived tax credit program generally provides a credit of 20 percent, or 25 percent in certain circumstances, for qualified rehabilitation expenditures incurred on or after July 3 for new or existing historical rehabilitation projects. The application process will work as follows, according to the advisory from the Division of Taxation:
* Applications should be submitted, by mail or private delivery service, directly to the Rhode Island Division of Taxation on or after Aug. 1. The application, a new form created just for this purpose, is posted on the Division of Taxation website, www.tax.ri.gov .
* The Division of Taxation will place applications in a queue starting Aug. 1. No applications will be accepted before then. If the aggregate amount of credits requested in the applications exceeds available funds, officials will hold a drawing to determine which applications may later qualify for the credits.
* Applicants must also complete Parts 1 and 2 of the Rhode Island Historical Preservation & Heritage Commission's application, which are available on the commission's website, www.preservation.ri.gov/credits . Part 1 is used to determine whether a building is a certified historic structure. Part 2 is used to review proposed rehabilitation work.
The Historical Preservation & Heritage Commission will notify the applicant and the Division of Taxation when Part 1 and Part 2 of the application are approved. Officials will then notify applicants regarding the signature of a tax credit contract and any related matters.
The Division of Taxation plans to issue an emergency regulation on Wednesday, July 24, to provide applicants and others with detailed guidance about the historic tax credit program. For information about the program in the meantime, visit www.preservation.ri.gov/credits or contact Donna Dube, principal revenue agent with the Rhode Island Division of Taxation, by mail at One Capitol Hill, Providence, RI 02908, phone at 401-574-8903, or email at email@example.com .