Tax credit available for historic properties

Owners of older properties on the National Register of Historic Places may be eligible for a 25 percent state tax credit to help fund restoration efforts.

Unfortunately, according to Paula Ringer, vice chair and midtown representative for the Landmarks Board, not enough people are aware of the state program.

"It's just monies that are available for older properties. It's just a great economic boon if people would realize it," she said.

Ringer said there are about 600 properties in Springfield that may be eligible for the state tax credit.

Mark Miles, assistant director of Missouri's Historic Preservation Program, said while Missouri isn't the only state to offer a tax credit for historic preservation properties, the amount is unusual.

"I don't know the exact number of states that now have tax credit programs. We have one of the largest tax credits at 25 percent. Some of the others are smaller than that," Miles said.

The state tax credit for historic properties parallels a 20 percent federal tax credit that also is available, he added.

"The federal program is restricted to income-producing properties. The state credit is also available to income-producing properties, but (it) is also available to historic property owners' individual residences, if that property is listed on the national register," Miles said.

"Some of the criteria are the same for both the federal and the state tax credits in terms of the eligibility of the projects being historically significant and being listed on the National Register," Miles added.

He said among the criteria is the requirement that projects receiving federal or state historic tax credits must meet the standards set forth by the secretary of the interior.

Bob McCroskey, owner of Bob McCroskey Real Estate, said he's worked with people from as far away as the East Coast who came to Missouri because of the tax credit.

"They weren't just looking at Springfield in particular. They were looking at all of Missouri because of the tax credits, but they hit the major towns looking for structures," McCroskey said.

He said for property owners looking to rehabilitate older buildings, meeting the Secretary of the Interior's standards is not out of the question.

"If you're going to take an old building and redo it to code, you're undergoing a fairly extensive deal anyway. If you're going to use city money ... you have to bring it up to code, and if you're doing an old shell of a building that hasn't been restored recently, then you're going to have to do something extensive," McCroskey said.

The tax credit, Miles said, is 25 percent of allowable expenses.

"Construction work on the building itself, architectural fees, things of that nature. Mechanical systems, new roof, wiring ... those are also allowable expenditures, and development," he said.

"Things that are not allowable expenses are generally furniture and fixtures, site work, things like parking lot construction," Miles added.

Both federal and state tax credit applications are reviewed at the state level, but Miles said the tax credits aren't received until the structure is returned to service.

"The final part of the application is submitted for verification that they essentially did what they said they were going to do," he said.

Ringer said it's important that people understand that the process of gaining tax credits for historic properties has been streamlined, and it can be easier if owners stay in contact with the state.

"There's a myth out there that it's red tape, it's horrible, a very daunting task to get it done ... if you step through the process right and involve the state early on ... as long as you keep the state involved, then it's a great program to utilize," she said.

Those involved with the Seville Hotel renovation project at 220 E. Walnut plan to utilize the state tax credit.

Tim Rosenbury, with Sam Freeman and Phill Burgess, owns the building, and said the restoration of the structure already has been certified as eligible for the state tax credit. He agreed with Ringer that working closely with state officials is important.

"Their requirements are not onerous, they just make good sense, but they need to be kept apprised of the project process because they're the ones that have to certify the rehabilitation," Rosenbury said.

"What's nice about the way Missouri's (tax credits) are written is that you don't have to do any more, or for that matter, any less, than what the federal government requires, and the review personnel are the same," he added.

The Seville is being restored for use as a hotel in downtown Springfield.

"Our product is going to be a little bit different than what the Seville was. But we're respecting the architecture that is there. We are not trying to create a past that didn't exist. The new will be new, and that which is original will be preserved or restored," he said.

Miles said the state tax credit option is an important tool in stimulating investment in Missouri's historic resources, and Paula Ringer said when that happens, the communities where those properties are located reap the benefits.

"You bring local jobs by local people doing the work, they buy local supplies. It gets back on the tax base on property taxes. Everybody benefits from getting a building back into use," Ringer said.

"It's like a domino effect ... it's just incremental. Historic preservation is always incremental. It happens building by building, but it's tremendous what can happen," she added.

Information about Missouri's historic preservation tax credit may be found online at www.ecodev.state.mo.us.

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