St. Paul Keeps Buildings Standing Through Historic Tax Credit

Published On: 25th August 2015

From the internet

St. Paul has some very beautiful old buildings standing throughout. These buildings are part of a very important history and that is why historic rehab is so important.

Now another historic building is going to receive a much needed rehab in an effort to preserve the historical significance of St. Paul. It is the upper post of Fort Snelling and it is expected to receive $70 million in funding, which is two-thirds of the projected total cost of the rehabilitation.

This is certainly a start thanks to a new state law that allows the money to go to for-profit developers rather than municipalities or non-profits.

It is called the Historic Tax Credit Program and it has so far awarded almost $120 million to private developers to rehabilitate historic buildings that they say they probably wouldn’t have touched without the funding.

The reason why developers can be hesitant to touch an old building is because the buildings are old and there are a lot of risks. Additional safeguards and preservation methods have to be put in place by developers and that means that more money is needed to do the job. It can be difficult for a non-profit to do the job, as many non-profits rely on volunteers to bring projects to completion. Many volunteers have their own companies to other jobs. For-profit developers can bid on a project for the exact cost and get the job done in a timely manner because that is their job.

This tax credit doesn’t require any sort of signoff from the legislature and doesn’t require the governor to approve its use. Instead, the Minnesota Historical Society and the Department of Revenue reviews the applications. The money used in the project comes from the general fund and there is no yearly cap.

Those in favor of the tax credit say that the law was needed to preserve properties that wouldn’t have gotten off the ground if they relied solely on private investment. The dollar amounts for rehabilitation are too high for private investment. Some of the projects exceed $100 million to complete.

It is also important to note that properties can be very expensive demolish, especially older ones that may still have asbestos in them. It can be quite cost-effective to preserve a property instead of demolish it, especially when that property is able to be used after its rehabilitation. It becomes a useful and productive piece of property.

One of the reasons for the program was that the construction industry needed some help. The housing bust caused many issues and the program was a way to try and give the boost that was needed. It was an effort that took 11 years to come to fruition. The efforts then led to the first round of grants and credits being awarded in 2012.