A recent PBN article (“Textile mill renovations now paying dividends,” June 25) highlighted five mill-conversion projects in Rhode Island, former massive and abandoned industrial sites that are now contributing to our red-hot residential real estate market. Some of the projects aren’t even fully completed and yet there are waiting lists for tenants. This is a boon for our state’s economy – and our quality of place.
What do 4 out of 5 of these multimillion-dollar renovations have in common? The R.I. State Historic Tax Credit. From 2001 to 2008, this program had been one of the strongest state incentive programs in the country, designed to spur the redevelopment and repurposing of historic commercial buildings, from large abandoned industrial sites to small “Main Street” properties – and everything in between. The program ceased being capitalized in 2008 but had a reprieve in 2013 with a modest recapitalization, which has been long since spent down. And despite the hiatus in state funding for this program, this tax credit since its inception has pumped just under $2 billion of private investment into our state’s economy.
The R.I. State Historic Tax Credit is also a powerful lever that attracts significant investments from federal programs, including the federal Historic Tax Credit, Low Income Housing Tax Credit and the New Markets Tax Credit, as well as from banks and other private lenders and investors.
And, at a time when our shortage of affordable and workforce housing is at a crisis point, it is noteworthy that the R.I. State Historic Tax Credit has rehabbed buildings across the state that provide over 6,000 units of affordable housing.
According to a Place Economics study, prepared in 2018 for my colleagues Val Talmage at Preserve Rhode Island and Trudy Coxe at the Preservation Society of Newport County, the state’s historic tax credit has spurred rehabilitation of 326 historic buildings in 26 of Rhode Island’s 39 municipalities since 2001. Other key positive impacts of the tax credit documented in the study include:
• Since 2001, tax credit rehabilitation projects have generated an average 965 direct jobs and an additional 739 indirect and induced jobs each year.
We suspect there is significantly higher demand than this infusion will meet.
• The rehabilitation of historic buildings using the tax credit has generated direct salaries and wages of $50 million, plus an additional $35 million in indirect and induced wages annually on average.
• For every $1 the state invests in a tax credit project, $10.53 of economic activity is produced in Rhode Island.
• The state of Rhode Island receives back nearly half of its historic tax credit financial commitments before the credits are even awarded.
There are even more benefits of the R.I. State Historic Tax Credit. The projects cited in the PBN article show how housing and retail and other commercial activities benefit. But think about this: Based on property valuation data from three Rhode Island communities, the assessed value of historic buildings rehabbed through the historic tax credit typically increases by 600% and sometimes by more than 1,000%. This is key to revitalizing communities and strengthening municipalities’ financial stability.
Additionally, many historic tax credit projects address major brownfields cleanup. Repurposing abandoned structures and putting them back into active use also reduces pressure on public-safety agencies. Farmland and forestland are protected from development as housing and commercial alternatives are provided in existing buildings in already built-up neighborhoods. Downtowns see more activity because more people are living in these communities.
Kudos also to the General Assembly for passing a budget that includes $20 million in new funding for the R.I. State Historic Tax Credit program. We suspect there is significantly higher demand than this infusion will meet, but it’s an important reboot of a program that has paid dividends to our state for two decades, in the form of housing, community revitalization and breathing new life into vacant buildings that have served our economy and our communities for many generations.
For both revitalizing our state’s economy and protecting the state’s beautiful soul, the R.I. State Historic Tax Credit is a star.
Scott Wolf is executive director of Grow Smart Rhode Island.
