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Thursday, 03 October 2013 21:18

New Bill Creates Incentives for Development Featured

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On Tuesday June 11, Governor Haley signed into law the Abandoned Buildings Revitalization Act (ABRA) creating tremendous opportunity for towns, cities and counties in the state that have been blighted by empty and under utilized buildings.

Here is how ABRA works.


Any commercial building that has at least 66% vacancy for more than 5 years qualifies for a 25% state income tax credit earned against the costs of rehabilitation.

 
The benefits of ABRA impact both rural and the larger cities and counties with a stepped approach to qualifying redevelopment projects. For those abandoned places in towns/cities/counties with:

1)  less than 1000 persons, the minimum project investment that triggers the tax credit is only $75,000.

2) 1,000 to 25,000 populations, the minimum project size must be $150,000.

3) above 25,000, the project minimum is $250,000.

       ABRA applies to any abandoned building site. It covers anything from old strip malls to manufacturing facilities as well as historic buildings.  The 66% abandoned formula was developed so as to capture the hundreds of three storied buildings that have a ground floor retail space but empty on the second and third floor (or basement). These local “white elephants” are all over the state in small towns and have been too risky in the past for local developers and property owners to invest in. This tax credit will help close that gap and help attract the investment capital it requires to make these places work.  
      

      In traveling thousands of miles across South Carolina, we at the Palmetto Trust have seen many places stand empty and seemingly forgotten. Towns that were once thriving and full of commerce two generations ago are now faced with dilapidated buildings and empty storefronts with the inevitability of lower tax revenue. It is impossible to save historic buildings unless there is economic incentive to invest, and it is evident that all the passionate advocacy in the world cannot change the tide of capital draining away from South Carolina’s cash strapped communities.

     The Abandoned Buildings Revitalization Act was developed out of a meeting over three years ago between the Palmetto Trust for Historic Preservation and Representative James Smith of Columbia. Representative Smith soon built a bipartisan coalition of support for the bill in the House, while Senator Creighton Coleman led the charge in the Senate. Through the efforts of focused legislative leadership, statewide support from the grassroots level, assistance from organized advocacy groups and our partner organizations, the bipartisan bill finally passed both sides of the State House: 111-2 in the House and a unanimous vote in the Senate. It was that bill that the Governor signed by our side on June 11th.

      Though it isn’t aimed at “historic” sites, they will benefit tremendously. In fact, the 25% tax credit allowed by ABRA can be utilized alongside the 30% Historic Preservation tax credit if the building qualifies for the National Register of Historic Places. This will allow up to 55% of rehabilitation costs to be recaptured through tax credits; a game changer for hundreds of historic downtowns.

      The effects of ABRA will deliver far more impact to the states economy than just the revitalization of empty buildings.  
In order to determine the impact of ABRA’s 25% SC income tax credit on the state’s budget, the Palmetto Trust for Historic Preservation commissioned a fiscal impact study three years ago with Clemson’s Strom Thurmond Institute. The Institute’s Regional Dynamics & Economic Modeling Laboratory confirmed that this act will create more wealth in SC.  It found that every dollar of tax credit spent will generate and additional $19-$21 additional dollars in South Carolina’s economic output. For every $500,000 of tax credits earned by developers, they will create between 100 to 150 new jobs.
 

      The Abandoned Buildings Revitalization Act will create the type of opportunities that will deliver more capital into the places of the state that need it the most.

Read 4787 times Last modified on Tuesday, 08 October 2013 13:47
Mike Bedenbaugh

Mike is Executive DIrector of the Palmetto Trust for Historic Preservation. 
oldhouse@palmettotrust.org
803-896-6234

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