By Christina Clagett, Organizer for Missouri Historic Revitalization Alliance
The Missouri Historic Tax Credit, which some of us refer to lovingly as “MOHTC,” has done a world of good across the state. The benefits are numerous and many are easy to overlook. But chances are, if you see the redevelopment of a Missouri building older than 50 years, the project is likely utilizing state historic tax credits. Pause for a moment and reflect on the redevelopment projects that have transformed downtown or your neighborhood in the past decade, then envision what it felt like to walk down those streets prior.
The MOHTC is the most effective incentive for growth in economic districts across the state. Historic buildings put back into service with MOHTC have spurred surrounding development by increasing property values and local tax bases, creating thousands of jobs, and leveraging billions (with a B) in direct private investment. Newly revitalized offices in historic buildings have been especially attractive in drawing established companies, start-ups and young professionals in recent years. The character and spatial quality in these offices cannot be matched by new construction, nor can the proximity to walk or bike to established amenities and services. Vibrant communities with a healthy tax base have more money for their schools, and require less spending for social programs. The large demolition cost for historic buildings is avoided, as well as the expense of new roads and infrastructure to access greenfield properties.
The most beautiful part of this program is how it provides diversified economic development to communities throughout the state. Regardless of the community size and location, the rules and process are the same. Nearly one hundred individual Missouri towns have benefitted from the program already, and many more have the potential and need.
Because of the high initial cost to renovate a historic building compared to new construction, the MOHTC often represents the tipping point to feasibility for the developer or owner. Because of the other benefits listed above, it is in our best interest as citizens to do all we can to make sure the projects go forward.
It seems counter-intuitive that such a successful program would face severe cuts or elimination from our State Legislature, but it has been an annual event since a cap of $140M was first initiated in 2009. Supporters have succeeded in keeping the cap at this level until now, but some “Grand Bargain Tax Reform” discussions among our leadership this past summer included a proposed cut from $140M to $90M. Some people think this would be okay, that we could deal with a $90M MOHTC and no hurt too badly. This is simply not true.
The Missouri Department of Economic Development have disclosed cap-reaching authorizations of $146.6M for FY2014. Just last week at the Missouri Preservation Conference, Nathan Potter of the MO DED reported that ONE quarter into FY2015, we have already reached $50M in MOHTC authorizations. If we had the lower cap this year, we would be looking at holding up 1/2 of yearly projects immediately; queuing for an unclear time period while paying property taxes and other building expenses is NOT an option for most developers and/or financial institutions. Do we want to imagine what happens to the growth and redevelopment pace across the state in that scenario? Let’s work together to prevent a cut instead.
We have a long road to January when the Legislative session begins, and more action will be required as we go. Presently, our local and state leadership can represent our interest best by understanding the critical point we are at and the consequences for our communities and state under a weakened MOHTC. We are at capacity for MOHTC, and ANY cut will slow growth across the state, period. Each additional voice increases our chances of success. Please speak with Mayor Slay and his staff, follow up with email and hold them accountable: Urge them to publicly protect and defend MOHTC from any cut, to Governor Nixon and the State Legislature. Please contact the Governor and your MO Legislature district leadership as well, links can be found on the web. You can learn more and sign up for our mailing list at morehtc.org.
Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri- St. Louis.
