What if North Carolina had an effective, proven way to preserve historic properties, create thousands of jobs and attract millions of dollars from private investors?
In fact, we do. North Carolinas Historic Preservation Tax Credit, an economic incentive for the otherwise prohibitively expensive rehabilitation of historic buildings, is a resounding economic success. Yet the program is at risk. Eliminating this incentive which pays for itself many times over would cost North Carolina jobs and discourage private investment at a time when our economy seems to be getting back on track.
Since 2001, the historic preservation program has attracted $1.4 billion of private investment and created an estimated 23,000 jobs. Projects in 90 of our 100 counties have leveraged these incentives by attracting private investment to preserve and improve historic properties. Qualifying projects receive a federal incentive that, combined with North Carolinas, makes otherwise financial unfeasible rehabilitation projects work.
Improving these properties also improves quality of life and bolsters local economies all over North Carolina. Completed projects include Gaston Memorial Hospital, redevelopment of downtown Mount Airy, the Elizabeth City Opera House, the Proctor Hotel in Greenville, the Reuben Wallace cabin in Rockingham County, the Great Aunt Stella Center in Charlotte and Maureen Joy Charter School in Durham. We all probably know a historic rehabilitation project, even if we dont know thats what it is.
As someone who oversees these kinds of projects for Self-Help, a community development lender and credit union based in Durham, I have first-hand knowledge of the Maureen Joy Charter School and other historic renovations. Self-Help has financed or developed over 15 historic properties across the state in big cities and smaller towns including Asheville, Charlotte, Rocky Mount, Sanford and Wilmington. I have dealt with the technical challenges and I have witnessed the benefits.
One thing I know for sure: None of these properties would have been saved and repurposed without the states investment in historic rehabilitation.
Much of the renovation work done by Self-Help and others has focused on old manufacturing and mill facilities large buildings that often have stood as vacant eyesores for decades. By investing in their rehabilitation, developers transform these decaying buildings into places where people can gather to work, live and enjoy recreation. These projects create jobs, increase local property values, enhance tourism and attract business investment. Moreover, by revitalizing neighborhoods and communities, they actually increase tax revenues collected by the state.
Skeptics might wonder why a state incentive is necessary in addition to a federal incentive. The answer is that without the federal and state incentives, it is generally not financially feasible to pursue renovating historic structures. Why? Because these projects are technically difficult and far more expensive than comparable new construction. A typical historic renovation costs one-third morethan building from scratch. And there is no site selection alternative.
Without state incentives many historic projects are not economical and simply wont be done. That would be a huge lost opportunity, especially for economically depressed small towns that are rich in history but low in wealth. The other benefit to the state is that it is risk free the incentive is received only if and when the project is completed.
Further, if potential investors cant make deals work in North Carolina, they can easily find attractive opportunities elsewhere. Nearly all surrounding states have a historic preservation tax credit program.
Just last year, Texas Gov. Rick Perry signed into law a 25 percent state historic rehabilitation tax credit.
Despite all this positive impact, our states incentive program will end this year if the legislature doesnt renew it.
But there is hope. Gov. Pat McCrorys departments of Commerce and Cultural Resources have proposed a modified Historic Rehabilitation Investment Program that would keep historic investment activity flowing in North Carolina, while addressing concerns about the incentives overall cost. It is critical that the governors program, under consideration at the General Assembly, is included in the final budget.
In these tight budget times the pressure our elected officials face is intense, but we all cherish North Carolinas heritage and future prosperity they are well worth this investment that pays for itself many times over.
Tucker Bartlett is executive vice president for lending and development for Self-Help in Durham.