Restore Oregon Calls for a Rehabilitation Tax Credit to Create Jobs and Revitalize Oregon’s Main Streets
January 23, 2014– After four years of research and public workshops aimed at addressing the physical and economic deterioration of Oregon’s historic downtowns, Restore Oregon today released a special report on Revitalizing Main Street that calls for a State Rehabilitation Tax Credit to spur economic development and job creation.
The organization notes that many of Oregon’s traditional downtowns are at a tipping point. For decades, big box stores, strip malls, and sprawl have drawn customers away, leaving buildings in a downward spiral of disinvestment and demolition-by-neglect. Today historic buildings are being rediscovered as hip and authentic places to live and work. But the cost of restoration, code upgrades, and seismic reinforcement often creates a “development gap,” placing rehabilitation out of reach, especially for small town property owners.
Across the country there is a growing movement to turn this around. Thirty-four states are attracting investment in their Main Streets by offering a State Rehabilitation Tax Credit. This has opened up opportunities to re-activate historic downtowns as centers of business incubation, housing, shopping, and heritage tourism.
“It’s time Oregon did the same!” according to Restore Oregon Executive Director, Peggy Moretti. “Preservation and reuse has been a State priority since the 1960s, but our current financial toolkit is incomplete, leaving millions of dollars on the table, hundreds of rehab projects undone, and thousands of workers un-hired. In many cases, a State Rehabilitation Tax Credit would make the difference and bring historic buildings back to life.”
How does it work? A state income tax credit is provided based on a percentage of rehabilitation costs – 20% to 25% is typical. This has been proven to stimulate private investment and can be taken directly by the property owner or transferred to a financial partner who provides funds for the rehabilitation work.
State rehab tax credits (sometimes known as historic tax credits) can be paired with Federal tax credits and local incentives to help cover the cost of refurbishing older buildings, bringing them up to code, and addressing seismic upgrades. The rehab work must retain historic character and make the building economically viable. As proposed by Restore Oregon, approximately 2600 historic commercial buildings in at least 75 communities statewide could benefit, including retail stores, apartment buildings, warehouses, office buildings, and barns. The vast majority are in traditional downtowns.
Acknowledging that tax credits have come under scrutiny of late, Restore Oregon notes that state rehabilitation tax credits have received bipartisan support nation-wide because they work, creating a significant ripple effect in local economies. In Ohio, each rehab tax credit dollar leverages $6.25 in investment. In Minnesota, every tax credit dollar creates $8.32 in economic activity. And in North Carolina, every tax credit dollar generates $12.51 in economic benefit. The Federal Rehabilitation Tax Credit produces a net gain of over 20% in Federal tax revenues.
Early response to this recommendation has been enthusiastic and Restore Oregon is working to advance legislation to enact a Rehab Tax Credit during the 2015 legislative session. Revitalizing Main Street is available online at www.RestoreOregon.org/rehab-tax-credit.
About Restore Oregon:
The mission of Restore Oregon is to Preserve, Reuse, and Pass Forward Oregon’s Historic Resources to Ensure Livable, Sustainable Communities. A 501(c)(3)non-profit originally founded in 1977 as the Historic Preservation League of Oregon, the organization provides educational programs, advocacy, and holds over 40 conservation easements on historic properties across the state, protecting them in perpetuity. They also work to save an annual list of Oregon’s Most Endangered Places.
Operating statewide, Restore Oregon is located in the historic White Stag Block, 24 NW First Avenue, Portland, OR 97209. 503 243-1923 www.RestoreOregon.org.