Officials, preservationists warn against eliminating historic tax credit

Published 8:32 am Friday, November 17, 2017

Small communities in central Kentucky like Danville could suffer painful economic losses if the federal government follows through on proposals to eliminate or reduce the Federal Historic Tax Credit, numerous officials and preservationists have warned.

“On Nov. 9, the House Ways and Means Committee passed the Tax Cuts and Jobs Act or H.R. 1, which entirely eliminates the Historic Tax Credit,” according to a letter warning of the proposals from the Blue Grass Trust. “On the same day, the Senate Finance Committee released its version of a tax reform bill. It proposes to halve the Historic Tax Credit, from 20 percent to 10 percent for historic buildings, as well as eliminate the 10 percent credit available for buildings not on the National Register of Historic Places but put in service before 1936.”

“Think about that for a minute,” said Danville Mayor Mike Perros. “If you do that, there will be no reason economically for anybody to do anything to any older building … Over a period of time, you will see a slow death of every small town across this state.”

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In a letter distributed Thursday, Boyle Landmark Trust Chair Jacob Pankey said historic preservationists across the U.S. are “fighting the toughest battle we have faced in decades” because of the proposals.

“The Federal Historic Tax Credit was permanently included in President Ronald Regan’s tax code in 1986. Those who qualify for this program can receive up to 20 percent in tax credits on the amount spent on investing in the restoration of historic buildings,” Pankey wrote. “President Regan described his program as ‘not only a matter of respect for our beauty and history but good economic sense.'”

The credit has helped preserve 42,000 structures in the U.S., created 2.5 million jobs and generated more than $29.8 billion in federal tax revenue, according to a recent opinion column from Stuart Sanders, the Kentucky Historical Society’s history advocate.

Local communities and others across the state have benefitted from the tax credit over the years. Perros said Kentucky is the “fourth-best state in the country at utilizing the historic tax credit. Many of our buildings downtown have been improved using the historic tax credit.”

Pankey provided information from the National Trust for Historic Preservation showing that 345 historic properties were rehabilitated in Kentucky from 2002 to 2016 thanks in part to the tax credit.

“In addition, 9,583 jobs were created, with over half being permanent jobs, and $112,187,000 tax dollars were generated ($27,703,700 were local and state tax dollars),” Pankey wrote. “… In Boyle County, there have been two properties that benefitted from the Federal Historic Tax Credit. The Leone Building (235 W. Main St.) and the Bright House and Farmstead (2626 Lexington Road) are examples of why this program is vital to historic preservation.

“Our neighboring counties have also utilized this program to revitalize their downtowns and historic homes. Garrard and Mercer counties have had three successful projects, and Lincoln County has had five properties that were saved with the help of the (credit).”

Beyond preserving history, those warning about elimination of the credit said it has helped with economic development — it can make it economically viable to restore old buildings and use them for business.

Jody Lassiter with the Danville-Boyle County Economic Development Partnership said there is currently “at least one business project” in Boyle County “for which the tax credit is a key consideration.”

“If a business prospect is targeting a location that includes a historic structure, the tax credit is definitely an important factor in the cost of renovation,” Lassiter said. “… For a community such as ours which has great pride in a large number of historic homes and buildings, the loss of the credit will negatively impact the cost-effectiveness of preserving those structures for residential or business uses.”

Pankey noted Boyle County has lost some important historic structures in recent years, including the Judge Boyle House and the Fisher-Byington House. The tax credit could have been used to help save those buildings, as well, he wrote.

Perros said he wants everyone to contact their legislators and tell them to keep the Federal Historic Tax Credit.

“They are listening,” he said, noting that he has been in contact with Kentucky’s legislators about the tax credit already. “Consider that if it (goes away), there will be no incentive for large, accurate redevelopment of historic properties.”

Boyle Landmark Trust made a similar plea.

“The incentives for future adaptive reuse of our historic areas are endangered,” Pankey wrote. “The Boyle Landmark Trust urges citizens that care about our architectural and local history to contact their congressional representatives and senators. Express to them the importance of our historic homes, our main streets and our heritage.”

SO YOU KNOW

Legislators representing all or part of this region at the federal level are:

• Sen. Mitch McConnell: (202) 224-2541

• Sen. Rand Paul: (202) 224-4343

• Rep. Brett Guthrie (Boyle, Garrard, Mercer): (202) 225-3501

• Rep. Hal Rogers (Lincoln): (202) 225-4601

• Rep. James Comer (Casey): (202) 225-3115