News Column

'IT'S NOT OVER YET'

August 11, 2014

By Rochelle Moore, The Wilson Daily Times, N.C.

Aug. 11--The future of historic preservation projects in Wilson and elsewhere in the state hinges on whether the General Assembly passes legislation that continues North Carolina's historic preservation tax credit program.

The state's $21.1 billion budget does not include the program, which leads to its sunset at the end of the year. Because the General Assembly has not adjourned for the year, the chance still exists that the program will be revisited, said Myrick Howard, Preservation North Carolina president.

"It's not over yet," Howard said. "I hope we get something in one form or another. There's been a huge support in the General Assembly, but we've run up against any tax credit."

There are two bills, one in the House and another in the Senate, that include provisions for historic preservation. Howard said either bill would be a positive for North Carolina, and the bills are still planned for review this year.

Senate Bill 763 contains a slightly modified version of Gov. Pat McCrory's Historic Rehabilitation Investment Program, which the governor included in his initial budget recommendation earlier this year. The bill has passed in the House and is awaiting a Senate review. Howard said Senate leaders are showing no interest in tax credits but are willing to support a program that's not based on the state tax code.

There is also a committee substitute for House Bill 1224 that contains language directing a study of historic preservation incentives, which Howard said would be favorable because of the program's track record of success.

"The study route might be more palatable for those in the legislature who oppose any and all tax credits," Howard said. "We feel confident that any economic analysis of historic rehabilitation will be very positive. It's been studied and proven many times before."

Changes could be made to the bills this year, but Howard expects both to pass in one form or another. If the study is approved, he and other preservation leaders are asking legislators to continue North Carolina's existing tax credit program through June 30 to give time for the study and any new legislation.

"It's not over," said Susan Kluttz, secretary of the N.C. Department of Cultural Resources. "The legislature is not officially adjourned. You can still make a difference."

Kluttz and McCrory continue to support the program, which has helped preserve historic properties and brought more than $1.7 billion in investment in North Carolina since its start in 1976, advocates said. Kluttz has asked legislators to consider supporting historic preservation in any economic development or financial bill this year.

"Everyone agrees that historic preservation brings jobs and economic development into small towns and urban downtowns," Kluttz said. "It has been shown many times over that saving one building has a ripple effect for a whole community in so many positive ways. Let's capitalize on our agreements and work together on finding a solution."

Local officials believe the credits would lead to continued historic preservation and downtown revitalization in Wilson. Already, the credits have led to the renovation of the Golden Leaf Apartments, Nash Street Lofts, Wilson Furniture Company Lofts and historic homes, they said.

The future of the Hi-Dollar warehouse, across from the Vollis Simpson Whirligig Park on Goldsboro Street, depends on whether the credits are available in the future. The 64,000-square-foot building was built in 1896 as a tobacco warehouse.

"The developers of the Hi-Dollar warehouse are banking on the tax credits," said Kimberly Van Dyk, Wilson's downtown manager. "Without them, the real estate redevelopment deal we have been working on for over two years will evaporate."

The planned investment for the property is $12 million and includes residential loft apartments and high-quality commercial space, she said.

"It is one of only two historic tobacco warehouses left in Historic Downtown Wilson -- the heart of the World's Greatest Tobacco Market," Van Dyk said. "The community has been strongly behind saving the historic building and finding a modern reuse for it that will further the vision for downtown. However, without these credits, there is just no way to make this project economically viable."

Statewide lobbying efforts continue and on Monday, legislators have been invited to see first-hand. The governor, secretary of commerce, secretary of cultural resources, Preservation North Carolina and a few state leaders have invited the entire General Assembly to a pre-opening of the Loray Mill in Gastonia. The mill is an active federal and state historic rehabilitation tax credit residential and commercial project.

The state's current historic preservation program allows the owners of commercial properties to defray 20 percent of the cost of renovation and 30 percent of the cost for mill properties and residential properties. The newly proposed Historic Rehabilitation Investment Program would provide state credits for income-producing historic properties.

A 15 percent credit would be available for up to $10 million in rehabilitation expenses and a 10 percent credit for rehabilitation expenses between $10 million and $20 million. An additional 5 percent credit would be available for economically distressed areas or if the property is considered an eligible targeted investment site.

Non-income producing historic properties would be eligible for a 20 percent credit for up to $200,000 in rehabilitation expenses and a 15 percent credit would be provided for rehabilitation expenses between $10,000 and $200,000, during a 24-month period. The credits have been proposed for projects that start after Jan. 1 and would continue five years.

CommunitySmith and Rehab Development completed the two loft projects in downtown Wilson, the Wilson Furniture Company Lofts and the Nash Street Lofts.

Developers with CommunitySmith and Rehab Development are interested in other projects in the downtown area, but the December sunset of the tax program will present new challenges, Patrick Reilly, managing partner of Rehab Development, has said,

"The North Carolina historic tax credits, recently sunset by the legislature, played an important part in us doing this project," he said. "It could be revisited in the next long session. As a developer, I can't take it to the bank that they're going to revisit it."

rochelle@wilsontimes.com -- 265-7818

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(c)2014 The Wilson Daily Times (Wilson, N.C.)

Visit The Wilson Daily Times (Wilson, N.C.) at www.wilsontimes.com

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Source: Wilson Daily Times (NC)


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