A provision in the tax reform bill introduced yesterday in the House of Representatives to eliminate the federal Historic Tax Credit program (HTC) has Chicago developers, city planners, and preservationists crying foul. The program, which incentivizes the redevelopment of older and often abandoned buildings, is an important tool in both restoring important architectural gems as well as spurring investment in blighted areas. The federal program provides a 20 percent tax credit that is paid out over a five year period after a project is completed.
Recent local ventures utilizing the credits include the restoration of Chicago’s iconic Wrigley Building, the Venetian Gothic Chicago Athletic Association, and the South Side’s Rosenwald Courts Apartments. A number of upcoming projects such as the redevelopment of the Julia C. Lathrop Homes, the renovation of IIT’s Romanesque Main Building into apartments, the creation of an artist live-work development in Pullman, and an overhaul of Chicago’s 2.8 million square foot Old Post Office building also anticipate counting on HTC funds.
Chicago Department of Planning and Development commissioner David Reifman tells the Chicago Tribune that the program has supported roughly 90 local projects and more than $2.4 billion in investment over the past decade. On the state level, Landmarks Illinois says the credits helped finance 269 projects between 2002 to 2016 while generating more than 45,000 jobs.
Nationally, the HTC was used to renovate more than 40,000 structures and channel $117 billion in private investment since its inception in 1981 by the Reagan administration. Those figures come from a recent analysis by the National Trust for Historic Preservation, which also shared a 1984 video address from President Ronald Regan touting the benefits of the program.
The provision to eliminate the HTC program is providing the development community with another reason to oppose the latest House bill. Earlier this week, the National Association of Home Builders (NAHB) formally announced its opposition to the GOP plan when it was revealed that tax credits for mortgage interest and state property taxes would also be eliminated.
Ironically, President Trump has been a major beneficiary of the program in the past, notes Curbed’s Patrick Sisson. As a real estate developer, Trump received $40 million in credits to assist in the renovation of Washington D.C.’s 1899 Old Post Office building into a Trump-branded 263-key luxury hotel.