Monday, May 21, 2007
Governor Culver Signs Historic Preservation Tax Credit Bill
DES MOINES – Governor Chet Culver today signed Senate File 566, a bill that increases funding for the state
historic tax credit program to promote preservation of historic buildings and serves as an economic stimulus
for communities.
The bill, signed during the State Historical Society of Iowa’s “Celebrate Community History” awards event, increases historic preservation tax credits from the current $6.4 million to $10 million next year and to a maximum of $20 million a year by 2010 for historic buildings. The bill also establishes a fund for small projects under $500,000 in qualified costs, and for projects located in Certified Cultural and Entertainment Districts and Great Places communities.
“I am very pleased to sign this bill into law today,” Culver said. “This legislation will invest more than $45 million over the next three years into historic building preservation. These dollars will help preserve Iowa’s main streets and return the historic buildings that surround them to their original glory.
“And through their preservation, these structures will, once again, become productive pieces of Iowa’s economy, attracting new companies, better jobs, and additional investment to our communities.”
The tax credits are 25 percent of a preservation project’s qualified rehabilitation cost and can be used to secure loans or be sold to investors to pay for costs affiliated with rehabilitating historic buildings. Investors have used the tax credit program to preserve and rehabilitate a number of historic buildings in small and large communities throughout the state, including the Masonic Temple in Des Moines, the Plymouth Block Building in Sioux City and the Van Allen Building in Clinton.
“Since 2000, this program has leveraged $236 million by private investors who are preserving and rehabilitating Iowa’s historic buildings, and increasing the funding could eventually leverage $80 million or more each year,” said Cyndi Pederson, director of the Iowa Department of Cultural Affairs.
“These and other historic properties are being rehabilitated for reasons far beyond the sake of preservation. They are being rehabilitated for adaptive reuse by new enterprises that add to the local property tax base and to the state’s sales and income tax revenues.”
The program is also being used to leverage investments in Iowa through the 20 percent federal rehabilitation tax credit program for commercial buildings.
Since its inception in 2000, and again after an additional $4 million was authorized for historic buildings located within certified Cultural and Entertainment Districts (CED) in 2005, SHSI staff observed sharp increases in companion applications for the federal historic tax credit program.
“The link between the state and federal programs suggests there is an indirect benefit from the tax credit program in the form of additional federal support for rehabilitation efforts in Iowa,” Pederson said. “With today’s signing, we expect a sharp increase in historic preservation activity in Iowa.”