Raleigh, N.C. — A proposal for a new tax credit for redeveloping old houses, factories and warehouses into new office and residential space passed the House last week, but House members held a news conference Tuesday morning to continue to press the matter as the legislation moves to the Senate.
Senators have been openly disdainful toward efforts to tinker with the overhaul of the state tax code passed two years ago, but a bipartisan group of House members and Secretary of Cultural Resources Susan Kluttz tried to emphasize in the news conference that the credit helps push the tax reform effort forward.
"This tax credit is entirely consistent with our desire to create jobs and foster economic development," said Rep. David Lewis, R-Harnett. "The purpose of tax reform is to spur economic development."
The old historic preservation tax credit expired on Jan. 1 as part of the tax reform effort, and Gov. Pat McCrory's administration and local officials from across North Carolina have been trying to revive it, calling it a vital economic development tool for both urban centers and rural communities.
Although Rep. Stephen Ross, R-Alamance, called the credit "a net benefit to the state" because of the private investment it has generated over the years, the House proposal narrowed the scope of the program in trying to reinstate it.
The new tax credit would be capped at $4.5 million for income-producing structures, such as old factory buildings that are converted into offices or condominiums. The credit for non-income-producing properties, such as historic single-family homes, would be capped at $22,500. The previous credit had no cap.
Developers could obtain higher credits up to the cap if a project is in an economically distressed county.
Total cost for the new program, which would expire in 2021, is estimated to top out at $8 million per year.
"This is one of the really great things the state has done," said House Speaker Tim Moore, citing various downtown revitalization efforts that have been kick-started by projects that likely wouldn't have been undertaken with any tax credits.
"There's a place for new construction, but there's also a side to go in and preserve what we have," Moore said. "It's incredible to see an area that has fallen into disrepair – buildings that were succumbing to age and time – now being brought back to life and being used."
Preserving old tobacco warehouses and textile mills enhances North Carolina's history for the future, Kluttz said, urging state residents to call senators and lobby for passage of the tax credit.
"This tells the North Carolina story," she said. "We've got a rich history, and North Carolinians value that history."