PAWTUCKET – Since taking effect in 2002, the R.I. State Historic Preservation Investment Tax Credit has brought about $2.5 billion in growth and jobs to the state, according to a report released today by Grow Smart Rhode Island.
Scott Wolf, the nonprofit’s executive director, said the program returns $5.35 in economic output for each $1 invested and is the single most important engine for historic development in the state.
With its rate of 30 percent of eligible expenses, it’s also one of the most expensive programs of its kind in the country. Many states, including Connecticut, offer a 25-percent credit.
Still, Lance Robbins, principal of Urban Smart Growth LLC – a Los Angeles-based developer that has four projects, totaling 2 million square feet, in progress across Rhode Island – told today’s gathering at Hope Artiste Village that he wouldn’t have undertaken the mill overhaul without the state credit. The $30 million project, transforming the former Hope Webbing manufacturing complex into a mixed-use development, is expected to be competed in 2009.
The tax-credit program came under fire in the R.I. General Assembly during its last legislative session. Sen. Stephen D. Alves, D-West Warwick, endorsed a bill that would have pared the state historic tax credit to 20 percent – the same amount the federal government offers – but the measure didn’t make it out of the Senate Finance Committee.
But putting restrictions on the number or amount of projects allowed under the program, or reducing the tax credit would be detrimental to the state, Edward Sanderson, the deputy state historic preservation officer and the executive director of the R.I. Historical Preservation & Heritage Commission, said today. Rhode Island’s percentage rate on the tax credit is a draw for developers – especially those who might not initialize plans if they’re unsure whether the credit will be available to them, Sanderson said.
Wolf agreed that slashing the tax credit would be harmful. “I think it would reduce the number of projects that could be completed, and it would be burdensome to both for-profit and nonprofit developers,” he said.
In Rhode Island so far, about 90 percent of the credits have been used in neighborhoods where average household incomes are below the state-wide median, Wolf noted. “Without any conscious targeting of this program, it is going almost entirely to the areas in the state where the economic need is the greatest.”
The Grow Smart report – compiled by Lipman Frizzell & Mitchell LLC of Maryland – found that the 150 projects completed in the state so far under the historic tax-credit program have totaled $535,247,020, while state and federal credits to the developers have totaled $160,574,106.
The 127 projects in progress or pending across the state represent an estimated investment of $998,631,472 and estimated state and federal tax credits of $299,589,441, the report said.
Grow Smart Rhode Island is a nonprofit alliance of leaders from the business, labor, academic, environmental, housing, development and other sectors that seeks to promote sustainable and prosperous growth and development. Additional information is available at www.growsmartri.com.
