Support Needed for Historic Tax Credit Bill in Iowa Legislature
A bill under consideration in the state Legislature could assist with flood reconstruction efforts in Cedar Rapids.
Senate File 436, which is eligible for debate in front of the full Iowa Senate, would increase the amount of historic tax credits available to offset costs of rehabilitating commercial and non-commercial buildings.
Ryan Dierks, director of the Dubuque-based Smart Growth Coalition, said many structures damaged in the Floods of 2008 could still use the tax credits to rebuild.
“Cedar Rapids has such a rich historic building stock,” Dierks said. “Without incentives, it’s not feasible to bring these buildings back to life.”
Dierks pointed to the Paramount Theatre in downtown Cedar Rapids, which used historic tax credits to help fund restoration work.
The building is more than a theater, he said. “The Paramount is a statement that (Cedar Rapids) is coming back.”
Tax credits also were used in the restoration of the historic CSPS Hall, 1103 Third St. SE, in the New Bohemia District, an area of Cedar Rapids that has been revitalized since the flood.
Iowa’s Historic Preservation and Cultural & Entertainment District Tax Credit Program provides a state income tax credit of 25 percent of the rehabilitation cost of historic buildings.
Not only does the program help preserve iconic sites, Dierks said, it stimulates economic growth and leverages private investment that creates jobs.
Senate File 436 would do the following:
Increase the amount of historic tax credits from $45 million to $60 million for FY2014, FY2015 and FY2016, with the funding level then reduced to $50 million.
Amend the definition of “substantial rehabilitation” to clarify language and qualify additional rehabilitation projects for the program.
Create an option for a 12-month extension on the completion deadline for projects that incur more than 50 percent of anticipated qualified rehabilitation costs within 60 months of project application approval.
Change the definition of a “small project” from projects under $500,000 to projects under $750,000.
Dierks said the tax credits typically are exhausted from one year to the next, so the increase in funding would help alleviate the backlog.
All areas of the state could benefit, as the credits are used for rebuilding efforts beyond flood recovery, he noted.
Those efforts have included work in Dubuque and Woodbine, which has “rebranded” itself by resurrecting historic storefronts, Dierks said.
Emily Meyer, a Smart Growth Coalition member and board member of Save CR Heritage, said the bill would open the door for smaller buildings to use the tax credits, as well as churches.
“It is an extremely well-written bill,” Meyer said.
She noted that the bill will provide project teams more certainty as they plan and allow construction to start sooner.
Dozens of projects reapply annually because they are not funded the first time around, Meyer said. “That is why this bill is so valuable for clearing out the backlog.”
She and Dierks encouraged Iowans to contact their legislators in support of the bill.
Dierks, whose group supports sustainable growth practices, called the historic tax credits program “very efficient.”
“There are safeguards in place” that prevent abuse of the program, he said. “You have to spend the money to get the money back. It’s not an upfront, write a check.”