Business Retention and Development Committee Agenda and Packet 2011 05 02

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Federal Rehabilitation Tax Credit The Federal Historic Preservation Tax Incentives Program has been in place since 1976 and is, in the words of the National Park Service, one of the federal government's most successful and cost- effective community revitalization programs." Administered by the National Park Service in cooperation with the Internal Revenue Service and the nation's State Historic Preservation Offices, this program encourages private investment in historic buildings by offering significant tax credits for rehabilitation. The principal incentive is a 20 percent income tax credit for the certified rehabilitation of a certified historic structure. The 20 percent credit is available for properties rehabilitated for income producing purposes, such as commercial, industrial, or rental residential uses. The federal 20 percent tax credit has been used extensively in Colorado. From 1981 to 2003: A total of 334 Colorado projects have used the credit, with cumulative qualified rehabil- itation costs of $493.8 million. The median cost of a Colorado federal tax credit project is $218,939 and the average cost is $1.6 million. Twenty -four projects filed to use the federal tax credit since the previous version of this report was published in 2002. Because the federal tax credit is used throughout the country, it is possible to draw comparisons between usage of the program in Colorado versus other states. Colorado is often one of the top 20 states utilizing the program, and consistently either first or second in the West. c Public and 1% Industrial 0 Semi- Pub ,o s dential e'ltal Federal Tax Credit Projects in Colorado by Project Type "Mixed -use includes commercial and residential uses Historic rehabilitation does not necessarily mean the complete overhaul of a structure. Many of the rehabilitations taking advantage of the federal and especially the state tax credits involved minimal or partial renovations, such as facade improvements. Nevertheless, the rehabilitation work still triggers economic benefits, even for these smaller -scale projects. SUMMARY: Federal Tax Credit From 1981 to 2003: 334 projects $493.8 million in rehabilitation costs PRESERVATION IN COLORADO 2005 UPDATE REHABILITATION l ar imer Square Denver Colorado 'Preserralion fax credits hart been rr key tool in my projects. 'troy are especiall r rrsef ulIhr pioneers who are redevel- oping a disin rested area. tinder those circrnnslances it can he difficult to obtain funding. but fax credits eau make your project much more attractive to investors." John 1lickenlooper Founder. \X%ynkoop Brewing Company Mayor, City of Denver 5