Cary News

Western Wake towns benefited from now-defunct historic preservation tax credits

Bill Akins renovated these Broad Street buildings, among others, around Fuquay-Varina, using state and federal tax credits for projects on historic properties. Signs outside the stores say what they were 80 or 90 years ago.
Bill Akins renovated these Broad Street buildings, among others, around Fuquay-Varina, using state and federal tax credits for projects on historic properties. Signs outside the stores say what they were 80 or 90 years ago. wdoran@newsobserver.com

Two or three decades ago, downtowns around western Wake County were largely lifeless. But in the mid-’90s and early 2000s, development picked up, and downtown areas such as those in Cary, Apex and Fuquay-Varina are now filled with mom-and-pop restaurants and boutique shops.

The availability of federal and state tax credits, plus a rejection of suburban sprawl, served as a major impetus for developers willing to take a risk to rehabilitate historic buildings and districts, say those involved in the growth.

But last year, the state put an end to those tax credits for historic buildings, which were available in addition to similar credits from the federal government. The state credits ended Dec. 31, but there is a burgeoning movement to restore them.

Bill Akins, a developer in Fuquay-Varina, used tax credits to renovate several historic buildings in downtown Fuquay-Varina. He said he’s not always a fan of government spending but disagrees with the Republican-led General Assembly’s decision to get rid of the spending on tax credits.

“I’m not a political wonk,” Akins said. “I don’t sit there and study all the nuances of the budget. But it seems like of all the things they blow money on, they could help pay for some historic renovation.”

He said the credits attract investors like him, who otherwise might not take the risks required to spruce up the buildings and spur economic development.

As the General Assembly prepares for a new session, the N.C. Metropolitan Mayors Coalition, a group of 26 mayors from some of the state’s largest cities, is circulating a petition calling on legislators to reinstate the credits.

The petition made the rounds on social media earlier this month. It has at least 3,500 signatures, according to HistoricTaxCredits.org, a website set up to provide information on the credits’ success stories.

Gov. Pat McCrory supports restoring the credits and helped formed the coalition of municipal leaders and real-estate developers to lobby legislators.

Meanwhile, some state agencies, such as the N.C. Department of Commerce’s Main Street Center and the N.C. Department of Cultural Resources, also are lobbying for the tax credits to be reinstated.

Susan Kluttz, the state’s cultural resources secretary, will be in Apex on Jan. 28 to tour some buildings that benefited from the tax credits. She will speak about the economic development possibilities within historic districts like downtown Apex.

Revitalizing buildings, whole areas

In Fuquay-Varina, Akins and Mayor John Byrne each renovated historic downtown buildings throughout the ’90s. Both said they received hundreds of thousands of dollars in tax credits.

Byrne, the mayor since 2001, began buying and renovating historic buildings in 1992. Those included a hotel and a palatial home on Main Street, which he turned into the Ben Wiley Apartments and the Fuquay Mineral Spring Inn and Garden, respectively.

“People thought I was crazy for investing in downtown Fuquay-Varina,” Byrne said.

On the other end of downtown, Akins was buying up historic properties on Broad Street. Like Byrne, he said people called him crazy.

But in 1996 the state passed a 20-percent tax credit for people restoring historic buildings, and they took effect Jan. 1, 1998. Soon after that, Akins bought four Broad Street addresses and began adding apartments on the top floors and improving retail space on the ground floor.

“The tax credits were really the reason I did it,” Akins said. “The rub on that area was it was a kind of run-down, desolate area that had seen better days.”

One of the buildings was owned by Akins’ grandfather from the 1920s to the ’60s. He said nostalgia alone wouldn’t have convinced him to buy the property, so he’s glad the tax credits gave him an incentive to revitalize the property.

“Fifteen, 20 years ago it was an eyesore,” Akins said. “It was a hindrance to economic development. People would try to stay away from that area.”

Now his properties at 513, 515, 519 and 521 Broad St. house families as well as a yoga studio, a clothing store, a flower shop and Nil’s Cafe.

Akins also had a hand in rehabilitating the old train depot where Aviator Taproom has now become a hot spot for the region, not just in Fuquay-Varina.

“If I had not had the tax credits, I never would’ve done anything in that area,” he said. “And probably that area would’ve been torn down and used for a wider road, because the town just did not know what to do with that area.”

Helping entire community

In Apex, nearly the entire downtown benefited from investors wooed by the credits, said Jeremy Bradham, an Apex native who works as the preservation specialist for Capital Area Preservation.

Gary Roth, CEO and President of Capital Area Preservation, said his Wake County-focused non-profit has been lobbying to bring back the tax credits.

“It’s just been a great incentive to people to restore properties, rehabilitate them, reuse them,” Roth said. “And sometimes it’s the thing that makes the difference. It tips the scale for the developer.”

Byrne and Akins said that was true for them.

“It’s a very big catalyst to economic development, and it’s really near-sighted for them to look at that as a cost,” Akins said.

Roth said many people involved in historic preservation can only afford it with the help of the credits. But once the work is done, he said, the restored properties tend to draw other investment and grow the local tax base and sense of place.

“When you think of Fuquay, you think of Cary, you think of Apex – downtown Apex – historic preservation has led the way,” Roth said.

Byrne said his inn isn’t a large economic force, but it does bring in hundreds of visitors a year who buy flowers for weddings, grab dinner downtown or drink the local Aviator beer he has on tap at his inn. As more businesses like his pop up in historic districts, he said, they all benefit.

“It’s not about my little B&B. ... It’s about the whole community, the whole area, bringing people to that shop, that shop, that shop,” Byrne said, pointing down Main Street at restaurants and antique stores.

And many more buildings in Fuquay-Varina, Byrne said, could still benefit from work funded through tax credits if the program were to be restored.

“You need to attract investors ... and the tax credits are one of the tools that’s been used,” Byrne said.

Roth and Byrne said they’ve been talking to local representatives about changing the law, and both said they’re cautiously optimistic.

“From what we sense, the House looks good, the Senate is a little more cautious,” Roth said. “The governor is supportive. But it’s hard to say.”

Byrne said the vote to get rid of the credits was a political statement, but now that the statement has been made, there’s room for debate.

“I think it doesn’t matter if you’re a Democrat or a Republican, people want to make statements,” Byrne said. “And I think the statement has been made, taking away the tax credits.

“I think they will make adjustments,” Byrne added. “I think they will figure it out.”

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