Redevelopment Through Restoration
How Historic Tax Credits Have Accelerated Downtown Development
In center cities across the U.S., historic tax credits have been filling gaps in financing and building momentum for large-scale urban adaptive reuse projects that otherwise would be much more financially challenging.
The restoration of buildings with historic value is important to our downtown community and environment, but the costs of restoration vs. new construction can often look daunting on paper. To overcome this hurdle and to encourage preservation of our past, the National Park Service has created incentives for those looking to restore rather than rebuild. Several of the buildings in downtown Dayton are listed on or eligible for the National Register of Historic Places, which in turn qualifies them to apply for up to a 20% tax credit toward rehabilitation costs. The State of Ohio also has dedicated funds to reduce costs of historic preservation. Applicants can leverage a state tax credit for up to 25% of qualified rehabilitation expenditures incurred during redevelopment projects.
Although utilizing historic tax credits can be a labor- and time-intensive task, these credits offer a very tangible incentive to encourage rehabilitation of vacant and underutilized buildings in the urban core. During Fiscal Year FY 2015, the National Park Service approved 1,283 proposed projects, representing an estimated $6.63 billion of investment to restore and rehabilitate historic buildings. Last year, Ohio leveraged historic tax credits in 143 projects, claiming the 2nd spot nationwide for most projects in FY 2015. In the past 18-24 months, four projects in the downtown core have been awarded state historic tax credits and others are on their way.
Here are a handful of examples of the downtown Dayton projects underway or in the pipeline...