Federal historic tax credits at risk?
Published 12:37 am Friday, December 23, 2016
NATCHEZ — With tax reform anticipated to be an immediate priority during President-elect Donald Trump’s first 100 days of office, Natchez could be impacted by one potential cut — the federal historic tax credit.
The possible tax reform is based on Speaker of the U.S. House of Representatives Paul Ryan’s “A Better Way” blue print plan.
From 2002 to 2015, Natchez has had 22 projects completed using the federal historic tax credit, which statewide is only behind Jackson’s 25. Qualified rehabilitation expenditures has totaled approximately $7.21 million of a total of $268 million spent on the state level, a National Park Service study reported.
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Historic Natchez Foundation Deputy Director Trevor Brown said the majority of the project funding for historic rehabilitation ends up staying in the community.
“You have got a building already here that is sitting vacant or possibly underutilized,” Brown said. “You can get it back on the tax rolls. Also, during the rehabilitation itself, you are using local craftspeople and materials that you purchase locally.
“That money ends up in the local grocery stores, gas stations and so on.”
Natchez Mayor Darryl Grennell said with Natchez having more antebellum structures than any city in the country and many other historic buildings, losing the tax credit would be a big blow.
“I would urge residents to contact their senator and congressmen to see if we could maintain that for Mississippi cities, especially Natchez,” he said. “That’s a very important program to Natchez.”
Brown said the biggest project that could be impacted locally right now is the former Eola Hotel, which is vacant but developers are looking to create a senior apartments facility.
When combining state and federal historic tax credits, a developer could get 45 percent of qualified expenditures back, Brown said.
“You don’t have to be a mathematician to figure out that is a pretty big incentive to come in and use that,” he said. “I know the developers were looking to take advantage of the tax credits, so (a change in the tax credit) would definitely give them something to think about.”
Brown said the state tax credit is not in danger, but the state credit can only be used toward income-producing properties.
Brown said the package is an incentive for investment in downtown Natchez.
“There are obviously a number of empty buildings downtown that these tax credits could help in rehabilitation,” he said. “You would have not only the charm of the architecture, but the overall vibe it gives you to have a walkable city.
“It is good for tourists, but it is good for locals as well. The quality of life of a compact, walkable downtown, it is hard to put a qualifier on that.”
A total of 202 projects have been completed from 2002 to 2015 in Mississippi, the National Park Service reported. Around the state, 6,390 jobs were created as a result of the rehabilitation project and 3,254 have been permanent. Total taxes generated have been $68,380,000.
Other tax credits that could be impacted include the new markets tax credit and the low income housing tax credit.
Rep. Gregg Harper (R-Jackson) represents the third district, which includes Natchez. A Harper representative can be reached at firstname.lastname@example.org.