NPS RELEASES 2010 TAX INCENTIVE REPORT: AMIDST DOWNTURN, HISTORIC REHAB INVESTMENT HOLDING ITS OWN IN WASHINGTON AND NATION

The National Park Service (NPS) Technical Preservation Services recently released its annual Statistical Report and Analysis for Fiscal Year 2010 summarizing performance of the Federal Tax Incentives for Rehabilitating Historic Buildings, commonly referred to as the ITC (for Investment Tax Credits). The ITC is the federal tax incentive program providing for a 20% credit for investment in “certified” rehabilitation projects of income-producing buildings that are listed in the National Register of Historic Places. For the ITC program, “certified” means that the rehabilitation work was determined by DAHP and NPS to meet the Secretary of the Interiors Standards for Rehabilitation. If the rehab work is found not to meet the Standards, the project is not qualified for receiving the federal tax credit, an important point to keep in mind. In the midst of the current nationwide economic downturn, the document reports good news for the ITC program as a lucrative incentive for investment in historic rehab projects. National totals indicate an investment of $3.43 billion in the rehabilitation of 951 historic buildings and creating 41,641 new jobs. More good news shows that historic rehab projects have resulted in 5,514 low and moderate income housing units and 13,273 housing units created or renovated overall across the nation.   Drilling down into the data to see how the ITC has been utilized in Washington state, generally speaking, here at home in 2010 we maintained our past trend of falling in the upper middle of the pack of the 50 states plus territories in: the number of certified historic rehab projects, total dollars invested, and average investment. For example, Washington ranked 18 overall in terms of “certified” rehab investments at nearly $61 million and just behind Oregon at $64 million. However, Washington achieved greater investment than many of its “peer” states (other states of comparable population, economics, and demographics) such as Colorado ($3.4M), Minnesota ($11M), and Georgia ($12.8M). In terms of actual numbers of rehab projects that were “certified” in 2010, Washington ranked 22 amongst all the states with 6 certified projects and well behind Oregon with 13 and other states such as Georgia (18), Kentucky (27), and Wisconsin (12) but ahead of other peer states such as Colorado and Minnesota at 2 projects each. But when looking at average investment, Washington (at $10.1M) again did well in 2010 being competitive even with much larger states such as California ($11.4M), New York ($11.8M), and TX at $10.3M. As has been the trend for several years, Missouri comes out on top in 2010 amongst all the states in utilization of the federal tax incentives where 118 projects were certified representing an investment of $482M. Finally of note, the report acknowledges that nearly 50% of rehab projects taking advantage of the ITC program also utilized income or property tax incentives implemented at the state level, including Washington’s Special Valuation for Historic Properties tax incentive program. Clearly, availability of a state authorized incentive package is a great tool for leveraging ITC investment projects as has been demonstrated in Washington since the 1980s (Washington's Special Valuation projects represent nearly $380M in the last 5 years alone). For more information about the ITC program go to the National Park Service website. A copy of the 2010 report (which features pictures of several rehab projects including Bellingham’s National Bank Building) is not yet posted, although the 2009 edition can be downloaded from this site.