Historic properties may qualify for tax incentives

by Jan K. Allen

SBJ Contributing Writer

Interested Springfieldians gathered May 3 at City Council Chambers to hear about financial incentives for historic preservation projects.

Ann Perry, incentive specialist with the Missouri Department of Economic Development, and Mark Miles, historic preservation revolving fund specialist from the state Historic Preservation Program, explained how individuals, business partnerships and municipalities can qualify for tax credits or grant money on preservation projects, said Brendan Griesemer, principal planner in the Springfield Planning and Development Department.

The Missouri Historic Tax Credit Program was approved by the Missouri General Assembly in September 1997 and became effective Jan. 1, 1998, Perry stated.

The state tax credit is equal to 25 percent of the total costs and expenses of rehabilitation incurred on projects started after the effective date. The state law requires that rehab expenditures exceed 50 percent of the total basis in the property.

In a summary pamphlet, the Historic Preservation Program states a property must be located in Missouri and offered for commercial or residential use. It also must be listed individually on the National Register of Historic Places, or be certified by the Missouri Department of Natural Resources as contributing to the historical significance of a historic district on the Historic Register or a historic district that has been certified by the U.S. Department of the Interior.

Tax credits differ from tax deductions in that a dollar in tax credits reduces the tax owed by one dollar, according to the Historic Preservation Program.

Federal credits are equal to 20 percent of the rehabilitation costs and are also administered by the program, Miles said.

Eligibility is basically the same as with the state program, which was patterned after the federal program, established in the late 1970s to begin in 1980.

The two programs differ in that property which is the taxpayer's residence would not qualify for federal credits, but is eligible for state credits. In both the state and federal programs, nonprofit entities are ineligible.

The program pamphlet also said building owners can seek listing in the National Register while in the process of applying for the tax credits in part I of the application. Part II of the application calls for a detailed outline of the proposed rehabilitation.

Application fees are assessed by the National Park Service, which reviews the application, and these fees are based on the cost of the project. Fees can range from $500 to $2,500.

To access federal grant money allocated to the state each year, it can be helpful to enlist the aid of the Historic Preservation Program from the early stages of a planned project, Miles said.

"Where grant money is concerned, realistically, if we've had some involvement in planning and development and have some first-hand knowledge of the project, it can help their chances, since we're already familiar with the property," he said.

Although representatives of the state do not have to visit the property, they often do make on-site inspections when time allows. Expense approval can also be gained through detailed reports, receipts and photos of the property, Miles said.

Missouri's share of the federal grant money for historic preservation is $700,000 per year. After administrative costs, $200,000 is available to be divided statewide among qualifying projects.

Although there hasn't been an increase in the allocation since the grant program was initiated, at least it hasn't been cut, Miles said.

"It is always good to check with us, even if a group or property does not qualify for tax credits," Perry said. "We might be able to direct you."

A newly organized local group, Preservation Springfield, took advantage of the visit to learn of ways the organization can benefit from state and federal grant money for future projects.

According to Richard Burton, executive director of Preservation Springfield, the organization, founded in April of this year, is looking at a number of local properties worthy of renovation.

"It's important to get federal money into the city for worthwhile projects," Burton said.

Additional information relating to federal credits can be obtained through the Historic Preservation Program, Missouri Department of Natural Resources, PO Box 176, Jefferson City 65102, phone 573-751-7860.

Information on state credits is available from Community Development Division, Missouri Department of Economic Development, PO Box 118, Jefferson City 65102, phone 573-751-5981.

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