The Times-Picayune, July 17, 2014
The National Trust for Historic Preservation issued its annual list of America’s 11 Most Endangered Historic Places in late June. And while there were no sites from Louisiana on this year’s list, it did include a tax incentive that has been key to preserving hundreds of New Orleans’ beloved historic buildings.
It’s called the federal historic tax credit, and without it, New Orleans would be a much different place. Picture Canal Street without its restored historic buildings, or a still-dark Saenger Theater, or a defunct automobile dealership where Rouse’s grocery now bustles with activity. The long disinvestment on Oretha Castle Haley Boulevard/Dryades Street also is ending thanks to tax credit investments in the Museum of Southern Foods, the Jazz Market and the Myrtle Banks School, which sat for years as a burned out shell.
Without the federal historic tax credit, hundreds of newly restored historic buildings throughout the city would likely be languishing — badly in need of restoration but without a developer willing to take on the expensive job of rehabbing them. The program provides a tax credit equal to 20 percent of the qualifying rehabilitation costs and which can be transferred to investors in exchange for cash needed to fully finance the project. It’s a winning combination. The developer gets the financing to proceed, the community gets a carefully restored historic building in which to live, work or play and the economic benefits resulting from increases in tourism, property values, tax base, small businesses and jobs.
President Ronald Reagan signed the tax credit into law in 1981 to draw private investment to the rehabilitation of historic buildings and, in the process, help revitalize historic communities. By 1984 he was able to say, “Our historic tax credits have made the preservation of our older buildings not only a matter of respect for beauty and history, but of course for economic good sense.” In 2014, we can see how right he was, as the credit’s positive impact in New Orleans and the rest of Louisiana has been transformative.
Despite the federal historic tax credit’s impressive track record and history of bipartisan support over the past 33 years, it was named to the National Trust for Historic Preservation’s endangered list because of calls to eliminate it on Capitol Hill. A recent plan to reform the tax code repealed the historic tax credit entirely.
Eliminating the tax credit makes no sense. Over the history of the program, it has created 2.4 million good-paying jobs and generated almost $108 billion in private investment nationwide. Research from Rutgers University shows that the historic tax credit more than pays for itself: Every $1 of tax credits ultimately generates $1.26 in tax revenues for the federal government, as buildings that were once vacant and abandoned are returned to productive use. On top of that, as we can see here in New Orleans, the tax credit has helped to save irreplaceable historic buildings from the wrecking ball — preserving the unique historic charm that has helped make cities like ours magnets for tourists from around the world.
Mayor Mitch Landrieu has played an important role in securing a resolution by the U.S. Conference of Mayors in support of the historic tax credit. We need Louisiana’s congressional delegation to show that same leadership by being staunch champions of the federal historic tax credit during tax reform — for the sake of Louisiana’s economy, heritage and quality of life.
Camille Jones Strachan is New Orleans preservationist, attorney in private practice and trustee emeriti of the National Trust for Historic Preservation.