Summer 2018 PA Historic Tax Credit Update

After a chaotic winter where one of the federal government’s most successful historic preservation programs over the past 40 years – the Historic Preservation Tax Credit – was almost eliminated during federal tax reform, there is a lot to catch up on relating to both the federal and Pennsylvania historic tax credit programs.

Federal HTC Update

If you were not following federal tax reform at the end of 2017 and its impact on the federal historic tax credit program, you can find a complete overview of changes to the program in this story by Novogadac & Company. Many thanks go out to all individuals and organizations that worked to save this vital historic preservation program but special thanks go out to the National Trust for Historic Preservation and Historic Tax Credit Coalition at the federal level and Preservation Pennsylvania at the state level.

Pennsylvania HTC Updates

$3 Million in FY 2017-2018 Historic Preservation Tax Credits (HPTC)

The second major update is that Department of Community and Economic Development Secretary Dennis Davin, and Pennsylvania Historical and Museum Commission Executive Director Andrea Lowery recently announced the latest recipients of the 2017 Historic Preservation Tax Credits.

State investment by this important program will help create over an estimated $257 Million in rehabilitation expenditures for projects that preserve historic buildings, revitalize communities, and promote local economic development.

Selected projects range from a historic silk mill in Kutztown, Berks County that is being converted into a toothbrush manufacturing facility to a vacant downtown commercial building converted into mixed use apartment building in downtown Philipsburg, Centre County to the revival of the landmark Yorktowne Hotel in York, York County.

The twenty-one projects that are allocated the $3 million in tax credits will leverage with an estimated $257 million in construction projects. In all, 73 applicants had sought over $17 million in tax credits for construction projects totaling more than $693 million in estimated costs. Please see the full list of FY 2017-2018 projects below:

• 521 Armandale Street, Pittsburgh, Allegheny County – Rehabilitation of historic rowhouse in the Mexican War Streets Historic District into an affordable housing. $86,303 tax credit allocation, $345,211 in estimated construction expenditures
• 1010 Morrison Street, Pittsburgh, Allegheny County – Rehabilitation of historic rowhouse in the Old Allegheny Rows Historic District into an affordable housing. $43,697 tax credit allocation, $182,855 in estimated construction expenditures
• Arrott Building – Pittsburgh, Allegheny County – Rehabilitation of historic office building in the Fourth Avenue Historic District into a hotel. $200,000 tax credit allocation, $43,218,472 in estimated construction expenditures

• Bayard School – Pittsburgh, Allegheny County – Rehabilitation of National Register listed school into apartments. $150,000 tax credit allocation, $3,224,807 in estimated construction expenditures
• Bonn Building – Pittsburgh, Allegheny County – Rehabilitation of historic office building in the Penn-Liberty Historic District into commercial market rate apartments. $200,000 tax credit allocation, $6,774,267 in estimated construction expenditures

• Rogers School – Pittsburgh, Allegheny County – Rehabilitation of National Register listed historic school into a charter school. $200,000 tax credit allocation, $13,520,000 in estimated construction expenditures
• Kutztown Silk Mill – Kutztown, Berks County – Rehabilitation of National Register eligible historic silk mill complex into a toothbrush manufacturing facility. $150,000 tax credit allocation, $2,795,157 in estimated construction expenditures
• Hoffer Building, Philipsburg, Centre County – Rehabilitation of historic commercial and office building in Philipsburg Historic District into commercial use and apartments. $75,000 tax credit allocation, $350,000 in estimated construction expenditures

• Awl House, Harrisburg, Dauphin County – Rehabilitation of townhouse in Harrisburg Historic District into office use. $25,000 tax credit allocation, $313,388 in estimated construction expenditures
• 349 N. Market Street – Lancaster, Lancaster County – Rehabilitation of historic tobacco storage building in Lancaster City Historic District into apartments. $150,000 tax credit allocation, $1,870,327 in estimated construction expenditures
• Samter Building – Scranton, Lackawanna County – Rehabilitation of historic department store into a mixed used commercial and residential building. $150,000 tax credit allocation, $803,382 in estimated construction expenditures
• Welles Mansion, Wilkes-Barre, Luzerne County – Rehabilitation of historic mansion in River Street Historic District into a boutique hotel/bed and breakfast. $10,000 tax credit allocation, $99,500 in estimated construction expenditures
• Lehigh Valley Cold Storage – Bethlehem, Northampton County – Rehabilitation of historic egg warehouse in South Bethlehem Downtown Historic District in the Lackawanna Avenue Commercial Historic District into apartments adjacent to Lehigh University. $200,000 tax credit allocation, $8,163,494 in estimated construction expenditures
• R&H Simon Silk Mill – Easton, Northampton County – Rehabilitation of National Register listed silk mill complex into multi-purpose complex of housing, offices, restaurants, and other commercial spaces. $200,000 tax credit allocation, $7,615,799 in estimated construction expenditures

• 257 N. 3^rd Street, Philadelphia – Rehabilitation of historic commercial row building in Old City Historic District into commercial use and apartments. $60,000 tax credit allocation, $1,750,000 in estimated construction expenditures
• Beury Building – Philadelphia – Rehabilitation of National Register listed bank and office building into affordable and market rate apartments. $200,000 tax credit allocation, $38,109,804 in estimated construction expenditures
• Max Levy Autograph Building – Philadelphia – Rehabilitation of historic industrial building in the Wayne Junction Historic District into apartments. $200,000 tax credit allocation, $4,223,916 in estimated construction expenditures

• Meckey Company Building – Philadelphia – Rehabilitation of National Register listed industrial building into a charter school. $150,000 tax credit allocation, $39,189,127 in estimated construction expenditures
• Penn Wynn House – Philadelphia – Rehabilitation of National Register listed mid-century modern apartment building into market rate apartments. $200,000 tax credit allocation, $47,388,000 in estimated construction expenditures
• Washington Trust Building, Washington, Washington County – Rehabilitation of National Register listed bank and office building into commercial use and affordable housing. $100,000 tax credit allocation, $1,279,242 in estimated construction expenditures
• Yorktowne Hotel – York, York County – Rehabilitation of downtown landmark hotel in York Historic District into 21^st century venue. $250,000 tax credit allocation, $36,519,123 in estimated construction expenditures

FY 2018-2019 Historic Preservation Tax Credits Application opening date

Please note that the opening application date for Fiscal Year 2018-2019 is November 1, 2018. For more information about the program please visit DCED’s website at https://dced.pa.gov/hptc.

The Historic Preservation Tax Credit program, administered by the Department of Community and Economic Development and Pennsylvania Historical and Museum Commission since 2013, has invested more than $15 million to rehabilitate 81 historic buildings leveraging an estimated $1.3 billion in construction expenditures.

Pennsylvania Historic Preservation Tax Outreach Efforts

I wanted to end the Summer 2018 update by highlighting two major efforts that are focused on improving the Pennsylvania HPTC program.

First, if you are not aware, the PA HTC program sunsets in FY 2019-2020.

In an effort to understand the impact of the PA HTC program since its inception in 2012 and analyze ways to improve the program, Preservation Pennsylvania is working with PlaceEconomics, an internationally recognized consulting firm with experience in downtown and neighborhood commercial district revitalization and analysis of preservation’s economic impacts, to prepare an economic analysis report.  PlaceEconomic’s staff recently completed site visits to six Pennsylvania communities – Philadelphia, West Chester, Easton, York, Harrisburg and Pittsburgh – to meet with developers who have successfully used the PA HTC program.

PlaceEconomics’ Donovan Rypkema will be presenting their key findings at the annual 2018 Pennsylvania Historic Preservation Awards program in Harrisburg on Thursday, September 27.  If you are interested in attending, please visit www.preservationpa.org for more information.  This will be the first chance to hear the results of this study that will be used to support the reauthorization and expansion of the Pennsylvania Historic Tax Credit program, a key priority of Preservation Pennsylvania in the coming months.

Second, under the leadership of Senator David Argall, R-Mahanoy City, the Pennsylvania Senate Republican Majority Policy Committee and the Senate Urban Affairs and Housing Committee put together a joint workshop to study how the state could make use of such tax credits and encourage the revitalization of lagging communities. This is the first step in the Senate re-drafting the PA HTC legislation for possible re-authorization in the next legislative cycle. Here is a link to a recap of the workshop.

Get in Touch!

If you are interested in historic tax credit programs, please contact me (Scott Doyle, 717 783-6012 or midoyle@pa.gov) or Shawn Massey (717 783-9920 or shmassey@pa.gov) to discuss your project or schedule a site visit. We are also available to provide workshops on the historic tax credit program in your community!