UPDATE: Wisconsin Lifts Moratorium on State Historic Preservation Tax Credit
Update: In a press release Monday, July 14, 2014, Wisconsin Governor Scott Walker announced that Wisconsin had partially lifted the temporary moratorium on their state Historic Preservation Tax Credit Program. During the moratorium, the Wisconsin Economic Development Corporation (WEDC, the state agency responsible for overseeing administration of the tax credit) reviewed the tax credit program and determined that the moratorium could be lifted for the Certified Historic Buildings program, but would remain in place for non-historic buildings constructed prior to 1936. Certified Historic Buildings are those listed in or eligible to be listed in the National Register of Historic Places.
This is good news for PVN's projects such as the Hotel Northland in Green Bay that planned to take advantage of the tax credit as part of their financing plan but had yet to submit their tax credit application. Governor Walker signed the original tax credit bill into law at the Hotel Northland last winter. The Hotel Northland project, which will rehabilitate the currently empty building into a boutique hotel, is a poster project for the tax credit. In his press release, Governor Walker acknowledged that projects funded by historic tax credits “help grow local economies and revitalize communities throughout [the] state.” The Hotel Northland, for example, expects to create 150 long term jobs and 182 full-time construction jobs.
Learn more about the Hotel Northland here.
On Monday, June 23, 2014, the State of Wisconsin placed a “temporary moratorium” on its state Historic Preservation Tax Credit program. The moratorium comes barely six months after the state legislature passed 2013 Wisconsin Act 62, legislation increasing the state's existing tax credit for rehabilitating historic buildings from 10% to 20%, in addition to enhanced state tax credits for non-historic rehabilitation. (Learn more about the details of the Wisconsin Historic Preservation Tax Credit by visiting our blog post on the topic.)
At the time that the increased tax credit legislation was passed, Wisconsin’s governor Scott Walker issued a statement explaining that “The passing of this legislation will revitalize downtown districts across the state, restoring these buildings will create a temporary and permanent economic increase for local and state economies.” It seems that the popularity of the increased tax credit was beyond what the Wisconsin legislature anticipated. A memo from Reed E. Hall, Secretary and CEO of the Wisconsin Economic Development Corporation (the state agency responsible for overseeing administration of the tax credit) to Senator Alberta Darling and Representative John Nygren, Co-Chairs of the Wisconsin joint Committee on Finance, and Wisconsin Senate Majority Leader Scott Fitzgerald states that project applications have been diverse and represent both rural and urban areas. The memo also states that $35 million in potential tax credits are currently waiting to be certified by the state; if fully realized these credits are anticipated to produce $180 million in additional economic development in communities throughout Wisconsin.
In Minnesota, which has a similar tax credit program, a 2011 study by the University of Minnesota Extension Center for Community Vitality found that for every dollar awarded through the state’s historic preservation tax credit program, $9.02 in economic activity is generated. A recent study by Jeffrey Oakman and Marvin Ward of the Office of the Chief Financial Officer of the District of Columbia offers empirical data showing that across the country, state tax credit programs increase use of federally funded historic tax credits, bringing otherwise un-used federal economic development resources into individual states.
The temporary moratorium is in place “until review can be completed,” with no guarantee that further tax credits will be available in Wisconsin this year or in the future.
The Oakman and Ward study can be found here.