Protecting the Missouri Historic Preservation Tax Credit Crucial in 2015

Protecting the Missouri Historic Preservation Tax Credit Crucial in 2015

The start of the 2015 Missouri Legislative Session is coming up on January 7 and there is an important message that our legislators need hear a lot in the coming months:

NO CUT to the Missouri Historic Preservation Tax Credit!

Whether conscious of it or not, we are surrounded by the tremendous impact of this program. Buildings older than 50 years have the potential to utilize MoHTC, which provides state tax credits up to 25% of rehabilitation expenses. By encouraging investment in our historic resources, which is one positive thing Missouri is RICH with, MoHTC has attracted local and out of state private investment. Missouri’s urban cores, main streets, residential neighborhoods and small towns have used the credit to revitalize and create jobs. Pause for a moment and reflect on the redevelopment projects that have transformed downtown St. Louis and struggling neighborhoods since 1998 when the credit became available. Then envision what it felt like to walk down those streets before. The top image is just a hint of the work MoHTC has yet to do in Missouri.

In 2009, members of our State Legislature instituted a cap of $140M on the credit, and have been attempting to weaken it further every year since. Any cut will cost Missouri communities dearly at this point, because for the first time since it was introduced, MoHTC authorizations reached the cap in fiscal year 2014 and demand is on pace to exceed the cap in the current year. As of October 1, authorizations had reached $50M according to the Department of Economic Development, with NINE months left in FY2015. This means ANY reduction to the cap will cause projects delays of undetermined length, which will ultimately prevent many from going forward at all.

Opportunities to revitalize communities with state Historic Preservation Tax Credits have already been limited by the cap, and any cut will further diminish private investment across the state. Preserving the historic identity of Missouri towns and cities is only the beginning of the profound effect MoHTC projects have on communities. Quality of life, jobs, and revitalization opportunities increase where there are MoHTC projects. It is the most effective incentive we have in Missouri for widespread economic growth.

In a political climate where every candidate offers vague promises of new jobs, MoHTC projects have been proven to deliver: 43,000 jobs have been created across Missouri since the implementation of the credit in 1998 through 2010.(1) Locally there are over 150 full-time construction workers employed by the Arcade Building renovation downtown, while the project also provides work for countless other professionals, such as architects, accountants, and financiers among others. Even with other incentives, the Arcade Building redevelopment would not be possible without Historic Tax Credits.

the Arcade Building under Construction (left) and the Railway Exchange Building (right)
{the Arcade Building under Construction (left) and the Railway Exchange Building (right)}

Without reinvestment, the Arcade Building would continue on its former path of deterioration and decay in the heart of downtown. That outcome would have resulted in a negative affect on the surrounding area and perception of the City. On our current path of revitalization, the building will be teeming with Webster University staff and students, residents, other businesses and visitors come 2016. While the revitalization of The Arcade Building is critical for downtown’s continued success, there are also many other buildings of similar importance which require substantial renovations to be economically viable: from the Chemical Building across the street to the elephant down the street, The Railway Exchange Building.

The Railway Exchange Building is twice as large as the Arcade Building, and therefore the stakes are amplified. You may have recently heard about design students from Washington University partnering with Downtown STL Inc. to brainstorm future ideas for the building. What was never mentioned were the incentives that will be necessary to make ANY redevelopment of the behemoth building feasible for the owner. If Historic Preservation Tax Credits are cut by ANY amount, the chances of redevelopment for the Railway Exchange Building drop significantly. What we’ll be saying about the Railway Exchange Building in ten years depends on saving MoHTC now!

the new $80M Washington University Loop Living project
{the new $80M Washington University Loop Living project}

MoHTC projects are often catalysts for adjacent new development as well, stabilizing neighborhoods and establishing a market for new investment. For example, there is the new $80M Washington University Loop Living project, formerly a vacant lot in the heart of the Loop. There are nine MoHTC projects totaling over $12.5M in private investment within one third mile, including the Pin-Up Bowl. These projects have reinforced the efforts of visionaries and risk-takers to strengthen the market and make new construction projects viable. MoHTC projects have played similar roles in communities across the state, and others are counting on their availability to emulate this success.

Missouri towns that have utilized MoHTC so far
{Missouri towns that have utilized MoHTC so far}

MoHTC works beautifully as a diverse and far-reaching economic development tool, as opposed to many incentives which are specific to one project or circumstance. The impacts have been just as profound in small cities and towns as they have in St. Louis, because the program works at many scales. A single project can have the same impact on a small-town Main Street that many large historic warehouse redevelopments have had on Washington Avenue locally and in downtown Kansas City and Springfield as well. Over 80 individual communities have used MoHTC to bring underutilized buildings in their downtowns and main streets back to productive, tax generating use. The most important point, however, is the work that’s left to do. State Historic Preservation Tax Credits are an indispensable part of the long-term development strategies for towns like Lexington, Ste. Genevieve, Hannibal, Monett, St. Louis, West Plains, Cape Girardeau, St. Joseph, Excelsior Springs, and many, many more. Countless towns will lose out on economic opportunities if there is any cut to the tax credit.

Why is this program consistently targeted for cuts if it works so well? The high utilization numbers would seem to speak to its success, however, this attracts the attention of cut-hungry politicians. Some legislators are more concerned with short term savings of a few million dollars a year than continuing on the MoHTC path that has leveraged $7.5 Billion in private investment (in just the 15 years it has existed). A vocal minority has characterized the program unfairly as a handout for rich homeowners, developers and middlemen, while ignoring the edge it gives our communities in attracting businesses and investment. It is simply irresponsible to use this flawed narrative to garner support for a cut that will have enduring consequences for Missouri communities. A reduction to the cap puts the brakes on a program that is doing widespread good in economies statewide.

There is extensive support and need for MoHTC, and our task is make sure voices supporting a strong MoHTC become a vocal majority.

DO NOT count on other people to do this for you, it’s too important to our state’s future!

Please engage our elected leaders early and often this session. Make sure they know a strong Missouri Historic Preservation Tax Credit is a critical priority to you, and it should be for them too! No Cuts to the Credit!

Missouri Legislature Speaker of the House John Diehl, St. Louis County
Capitol Office
Phone: 573-751-1544
Email: [email protected] or [email protected]
Web: 100 Great Ideas for Missouri
Twitter: @johndiehljr

Mayor Francis G. Slay
The local successes of MoHTC have helped define his administration.
Email: [email protected]
Phones: 314-622-3723 and 314-534-2009
Twitter: @MayorSlay

Representative Anne Zerr, of St. Charles. Chair of the Economic Development Committee
Email: [email protected]
Phone: 573-751-3717

President Pro Tem of the State Senate, Senator Tom Dempsey, St. Charles
Email: [email protected]
Phone: 573 751-1141

Find your House and Senate Members:
Missouri House member lookup
Missouri Senate member lookup

(1) Missouri Growth Association. Coffin, Sarah L, Ph.D., McCall, Ben, and Ryan, Rob, MAUA, An Evaluation of the Missouri Historic Preservation Tax Credit Programs Impact on Job Creation and Economic Activity Across the State.Saint Louis University, 2010.


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