BANKING/BUSINESS/TAXES/TRUMP AS PRESIDENT: “The new U.S. tax law has eroded the value of an incentive that developers have long used to help finance renovations of historic buildings around the country, raising worries about the prospects for future projects.
The law, signed by President Donald Trump last month, changed the federal historic tax credit, which provides reimbursement for 20% of certain costs on such rehabilitations. That payback is now spread over five years instead of one, which developers, preservationists and banks say reduces its value.
Property developers use the credits to attract investors like big banks and other corporations, and the credit is used as repayment. The program has helped turn old factories, department stores and banks into apartments, hotels and offices, while helping inject life into sagging main streets…
In both cases, the initial impetus was fear that Congress might eliminate the credit altogether. But Mr. Williams said the weakened version could have threatened a carefully constructed financing plan that includes multiple tax incentives…
Some states are pushing efforts to offset the federal changes. In Maryland, state Sen. Bill Ferguson, a Baltimore Democrat, said he plans to introduce legislation bolstering a state-level historic credit program. Preservationists in New York are also hoping to shore up the state’s historic credit, and in Michigan, the state House is considering a Senate-passed bill to revive a credit program there.”
-Scott Calvert and Jon Kamp, “Tax Law Erodes Historic-Building Credit, Threatening Some Projects,” The Wall Street Journal online, Jan. 19, 2018 10:37am