Tax credit used to preserve historic buildings could go away

Published 9:17 pm Wednesday, April 27, 2016

The Alabama Senate is voting this week on whether to extend a program that could have a significant impact on the revitalization of historic buildings in Selma.

A three-year program that provides state tax break for restoring historic buildings expires next month, but there is a push to extend the program seven more years. The Senate will vote this week to determine whether to extend the program statewide, giving Selma an opportunity to renovate its historic buildings at a cheaper price.

The vote for a seven-year extension has already passed in the Alabama House of Representatives by 32 of the state’s 35 representatives.

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A.C. Reeves, a real estate agent at Real Estate Gallery, said if a state tax break was renewed, it could lower the cost of renovating a building on Broad Street to provide residence and retail space.

Reeves said if she had federal and state historic tax credit approved for a renovation, she would receive 45 cents back for every dollar.

Reeves said she has already used the federal historic tax credit to help with previous renovation projects, but the state tax credit would help with her latest project.

“We would not be able to complete any of those had we not had federal historic tax credit,” Reeves said.

David Schneider with Schneider Historic Preservation, LLC in Anniston said the state historic tax credit was set up by the Ronald Reagan administration, and provides a 25 percent tax break.

Schneider believes Selma could benefit from an extension of the three-year program.

“They need that kind of incentive,” Schneider said. “Sadly, the economy in Selma has not been such that people can really afford to renovate buildings with the kind of rent that would sustain the level of investment, so these credits are absolutely crucial, especially in a town like Selma where everything is historic.”

While Selma hasn’t used the state tax credit yet, the three-year program has revitalized many historic buildings since it was approved in 2013.

The program has given up to $20 million in tax credits each year, revitalizing historic buildings around the state.

Schneider said the bigger cities in Alabama, such as Birmingham, have really benefited from the state tax credit, but he believes it will catch on to the smaller cities like Selma if the program is extended.

“It took two or three four years for federal [tax credit] to spread into the smaller communities, just like anything it requires knowledge on the developer’s part to know how to use it,” Schneider said.

Schneider said that he was less optimistic on Friday the program would be extended, but he feels more confident now that it will go through.

Still, there has been some opposition in the Senate from Republican leaders that suggests the program could be in danger of expiring next month.

“With the level of support its had in the House and the Senate, I hope it’s not going away,” Schneider said.

About Justin Fedich

Staff writer for The Selma Times-Journal.

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