A training session on West Virginia’s Historic Rehabilitation Tax Credit program is being presented next month.
The Wheeling Historic Landmark Commission is hosting the event at Wheeling City Council Chambers on Jan. 4 at 5:30 p.m., and the session is free and open to the public.
The West Virginia State Historic Preservation Office will give a presentation on changes to the tax credit program passed by the state Legislature in October, including an increase in the Commercial Historic Rehabilitation Tax Credit. The changes become effective in January.
The State Historic Preservation Office tax credit coordinator, Jennifer Brennan, said the changes will be important for people considering using it in historic rehabilitation, especially for commercial applications.
During a special session of the West Virginia Legislature in October, lawmakers passed a bill that makes redeveloping historic buildings in the state more viable, financially. The bill had widespread support from both sides of the aisle, but some are concerned it doesn’t go far enough.
The state historic rehabilitation tax credit was put in place as an incentive for individuals, developers, and property owners to take dilapidated, historic buildings and bring them back up to snuff — rehabilitating them into apartments, businesses, or community spaces…
Just like the Charles Washington Hall in Jefferson County.
What Rehabilitating Historic Buildings Could Look Like
The City of Charles Town took advantage of the state historic rehabilitation tax credit a few years ago to help rehabilitate the Charles Washington Hall in the city’s downtown area. At the time renovations began, a 10 percent tax credit was in place in West Virginia. The credit provides dollar-for-dollar reductions in income tax and corporate income tax liability for historic rehabilitation projects.
But the new legislation bumps that tax credit to 25 percent — though, it doesn’t go into effect until December 31.
Credit Liz McCormick / West Virginia Public Broadcasting
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West Virginia Public Broadcasting
A new auditorium space in the Charles Washington Hall in Charles Town, W.Va.
The Charles Washington Hall, originally built in 1874, is now home to an auditorium, a soon-to-open restaurant featuring Appalachian cuisine, and a small, organic, locally-sourced grocery store. Renovations were completed earlier this year.
The grocery, called Bushel & Peck, is the main presence at the location.
“It’s a beautiful building; wood floors and ceiling molding are really striking to me,” Abby Beavin, Assistant Manager at Bushel & Peck, said, “and all the beautiful wood detail. It has kind of its own challenges, like making a food safe facility in a historic building, but I think it’s a beautiful, beautiful space, with beautiful natural lighting.”
Bushel & Peck moved into the space at the beginning of October, so the market is still getting situated. Beavin hopes it will help revitalize downtown Charles Town and create a tighter community.
“It’s a difficult time to keep the main street businesses alive,” she noted, “You see a lot more of them boarded up in small towns than you do opening a new business. So, it’s a risk, but, you know, we’re out here and we’re gonna see what happens and see what works and what this will mean for Charles Town.”
Credit Liz McCormick / West Virginia Public Broadcasting
Last year, the Hub traveled the state to bring awareness to community members and lawmakers about the benefits of increasing the historic rehabilitation tax credit.
Jake Dougherty, Executive Director of Wheeling Heritage, was heavily involved in that campaign.
“We’ve seen people and developers choose Winchester, Virginia, over Martinsburg; Saint Clairsville, Ohio, over Wheeling; Ashland over Huntington; Waynesburg over Morgantown; it’s happening all across the state, and that’s revenues and that’s a stronger tax base, and that’s more jobs that aren’t happening in West Virginia, and they’re right across the border,” Dougherty explained.
A couple versions of a bill to increase that credit were introduced during the regular 2017 state Legislative session, but it wasn’t until a special session in October that advocates like Dougherty got their wish.
House Bill 203 increased the state’s historic rehabilitation tax credit from 10 to 25 percent, making the credit more competitive with West Virginia’s bordering neighbors like Virginia, Ohio, and Pennsylvania — BUT the bill also has a $10 million cap, or limit, per project and an annual, overall statewide cap of $25 million — unlike some neighboring states like Virginia, which have uncapped incentive plans.
Credit Will Price / West Virginia Legislative Photography
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West Virginia Legislative Photography
Sen. Glenn Jeffries, D-Putnam.
Democratic Senator Glenn Jeffries, of Putnam County, was the lead sponsor of a Senate version of the bill during the 2017 regular session.
He said, while he’s relieved something finally passed, he’s concerned the caps will discourage developers — especially the annual $25 million cap.
“I don’t want to see us hinder potential investors to come to West Virginia, invest their dollars, and [then] take it somewhere else,” Jeffries said, “If you keep the cap on it, that just pushes your application, and it’s first come first serve; somebody walks in there on day one, and the first three application takes up that $25 million, you gotta wait until the following year.”
Jefferies said he understands the reason for the limits — uncapped incentives could become a financial juggernaut in an already tight state budget if too many developers take advantage of the program all at once. But Jeffries argued it’s a long, step-by-step process to get approved and complete a renovation, so it wouldn’t hit the state in the way opponents fear. He plans to introduce amendments to the bill during the 2018 session.
The National Register of Historic Places has just over 700 historic buildings registered in West Virginia — like the Charles Washington Hall. To-date, 175 in-state projects have used the 10-percent historic rehabilitation tax credit.
West Virginia’s historic rehabilitation tax credit was put in place to encourage developers and property owners to take some of the state’s crumbling, historic structures and get them back into working order. The credit is also supposed to encourage the creation of local jobs while repurposing the underutilized buildings.
But the state’s tax credit is 10 percent, and a coalition of architects, economic developers, and others say that’s not enough to encourage the community development they’d like to see. That same group is now traveling the state looking for support as they prepare to ask state lawmakers to increase the tax credit.
Here at the old Shenandoah Hotel, which first opened in downtown Martinsburg in 1926, a group of community members – interested residents, city and county officials, and some state lawmakers from the area have gathered to hear about the potential benefits of increasing West Virginia’s historic rehabilitation tax credit.
The credit provides a 10 percent dollar-for-dollar reduction in income tax liability for renovation projects on buildings registered with the National Register of Historic Places. The owner is then responsible for the rest of the project costs.
Dall’Olio says an increase to the credit could mean an increase in the number of tourists who visit the state, looking for charm inherent in old buildings. But it could also mean an increase in state and local tax revenues.
“This is a perfect example of how tax credits, an increased tax credits could make somebody jump and do this project,” she said.
Dall’Olio and the Abandoned Properties Coalition would like to see state lawmakers bump the credit from 10 to 25 percent during the upcoming session to match neighboring states.
Nicole Marrocco is the Abandoned Properties Coalition coordinator for the West Virginia Community Development Hub.
“We’re in the Eastern Panhandle; we’re wedged between Maryland and Virginia, which are two states that have a higher tax credit, so we have the 20 percent tax credit in Maryland, the 25 percent tax credit in Virginia, and both states are seeing more development than we are here in the Eastern Panhandle,” Marrocco explained.
The National Trust for Historic Preservation tracked state tax dollars brought in by a similar federal tax credit between 2002 and 2015. Tax revenues in Virginia, where the state tax credit is 25 percent, were significantly higher during that time than in West Virginia—some $103 million compared to West Virginia’s $5 million. While those numbers are based on the study of a federal credit’s impact, Marrocco believes the state tax credit played a part in those revenues too. And West Virginia could see more money flowing into its coffers if lawmakers increased the rate.
Berkeley County Delegate Saira Blair attended the forum and says she sees it’s potential.
“It’s gonna be something that’s put on the table, I can guarantee that,” Blair said, “I don’t know if it’ll go through this year, because we’re looking at thousands of other things; our Finance committee is gonna be swamped, but one more thing to put out there is great for our state.”
Newly elected Senator Patricia Rucker, a Republican from Jefferson County, says she’s excited about the prospect of what increasing the historic tax credit could do for the state.
“We have historic areas all over the state, and actually, there are parts of our state which are so beautiful, people don’t even know,” she noted, “It’d be wonderful to increase our tourism dollars by letting this revitalization help all the areas of the state.”
Rucker says she would back legislation increasing the tax credit if it came before the legislature.
Abandoned Properties Coalition Meetings:
Wheeling Wednesday, January 25, 8:30 – 10:30 a.m. The Stone Center REGISTER
Fairmont Thursday, January 26, 1 – 3 p.m. The Gatherings REGISTER
Huntington Wednesday, February 1, 4 – 6 p.m. The Keith-Albee Theatre REGISTER
Charleston Thursday, February 2, 5 – 7 p.m. The Art Store REGISTER
