Historic Tax Credit Committee Grades Five Properties
January 8, 2019
On December 19, 2018, the Historic Tax Credit Evaluating Committee (“the Committee”) met to discuss and rank five applications for the historic tax credit. Committee members present were Representative Rod Scott, Senator Clyde Chambliss, Representative Victor Gaston, Secretary Greg Canfield (Ala. Dept. of Commerce), Senator Bobby Singleton, and Director Nichelle Nix (Governor’s Office of Minority Affairs). The meeting was attended by the Alabama REALTORS® Public Policy team.
The five applications were for properties in Mobile (two properties), Thomasville, Birmingham (Highland Park), and Decatur. All five projects were approved (grading unavailable). The two rural projects are scheduled to receive the allocation in 2019, while the three non-rural will not receive the allocation until 2021. Here is some additional information on the properties:
|Thomasville||Bedsole Furniture Co. Bldg.||33 W. Front Street||$875,000||Rural|
|Decatur||Pride and Mason Confectionaries||716 Bank Street, NE||$9,000||Rural|
|Mobile||ZMP Inge House||911 Government Street||$80,645||Non-rural|
|Mobile||55 N. Ann Street||55 N. Ann Street||$40,000||Non-rural|
|Birmingham||JW Cunningham House||3218 Cliff Road||$50,000||Non-rural|
The Historic Tax Credit was re-established in 2017, with applications first accepted in 2018. Applications are first sent to the Historical Commission, which then determines if the project meets initial criteria. If an application receives initial approval, the Commission refers the application to the Committee for approval and grading. The Committee grades projects based on factors set out in the Alabama Code.[i] These factors include the relative value of the proposed project to the particular community, the possible return on investment for the community, the geographic distribution of projects, and the strength of local support. The statute does not differentiate between residential or commercial use, although the factors usually favor commercial projects due to the larger overall benefit.[ii]
The Tax Credit is capped at $20 million per year for five years and must be split 40% to rural counties and 60% to non-rural counties. The Committee has approved and graded 45 properties, 11 in rural counties and 34 in non-rural. Currently, the annual non-rural allocation ($12 million) has been allocated through 2020, while the annual rural allocation has roughly $3.7 million of the 2019 allocation remaining. No credits have been allocated for 2022, the last year of the five-year program. The Legislature will need to revisit the Historic Tax Credit to extend it beyond 2022.
[i] Ala. Code § 40-9F-38.
[ii] To be considered, a property must be listed or eligible for listing in the National Register of Historic Places and be at least 60 years old.