The Vagabond: Historic tax credits available for area businesses

November 17, 2017 chris
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By Danny Crownover

The Vagabond recently did some historical research on some downtown Gadsden buildings and noted that many businesses in that area have not taken advantage of available tax credits for our designated historic downtowns of Gadsden, Alabama City and Attalla. Are you taking full tax advantage of your historic location? It is unbelievable how few business owners know about these credits.

The most recent business that did take advantage was the J.P. King Auction Company, which bought a building in the Downtown Gadsden Historic District at 414 Broad Street and was able to preserve it for its business.

“With this restoration, building owners Craig and Cindy King took advantage of the state ad valorem tax advantage for an income generating building in a National Register Historic District,” said Linda Nelson, a preservation and historic preservation tax credits consultant with FuturePast. “This economic incentive is working as it was intended – to promote modern business use in historic architecture and use the existing cityscape.”

Gadsden, Attalla and Alabama City are all listed on the Alabama Register of Landmarks and Heritage, as well as the National Register of Historic Places.

Gadsden’s Downtown Historic District represents the growth of downtown through its industrial heyday. The area features structures dating from the late 1870s up until the latter part of the World War II decade of the 1940s. Properties represented in the district are dated from 1878 to 1948, which include the date of the oldest significant masonry building (the opera house, which survived the 1883 fire) and the date of the razing of the old courthouse. The district was listed on the National Register of Historic Places in 1997.

Alabama City was founded in 1891, halfway between Gadsden and Attalla, with the intention of becoming the major industrial hub of Northeast Alabama.

In 1895, the town landed its first major concern, a cotton mill built by the Dwight Manufacturing Company of Chicopee, Mass. Its second major factory, the Alabama Steel and Wire Company, was opened in 1902.

By 1915, a thriving commercial district had grown up around Seventh Avenue, which became known as “Little Wall Street.” A fire in 1927 damaged or destroyed many structures along Wall Street and Meighan Boulevard. The city never recovered from the loss, especially as neighboring Gadsden flourished, and Alabama Ci-ty voted to merge into Gadsden in 1932. The district was listed on the National Register of Historic Places in 2002.

Attalla was founded in 1870 along the Alabama and Chattanooga Railroad. It quickly developed into a major iron ore export hub. After fires in 1887 and 1891, most of the frame buildings downtown were replaced with brick structures. The oldest buildings in the district date from the 1880s and 1890s. The district was listed on the Alabama Register of Landmarks and Heritage in 2011 and on the National Register of Historic Places in 2013.

All of these areas have an excellent collection of late 1800s to 1940s century historic buildings, many of which are undergoing rediscovery and rehabilitation.

Current building owners and those interested in opening, expanding or relocating as part of this downtown historical restoration economic development trend should not miss taking advantage of up to three different historic tax credits available to help with the costs of restoration.

First, there is the state ad valorem tax advantage for an income generating building in a National Register Historic District. This is a property tax reduction for every year of operation for the life of the building. Unless the historic appearance of the building is destroyed, this tax advantage stays with the building regardless of change of ownership or change of use. This is a decades old state economic incentive that is intended to promote business in historic architecture.

Second, and for 2017, the state of Alabama is assisting property owners with the cost of restoration by renewing the Alabama Hi-storic Rehabilitation Tax Credit Program. This provides a one-time 25 percent refundable tax credit against income tax owed for the year of project completion for private homeowners and owners of commercial properties who substantially rehabilitate historic properties listed in or eligible for the National Register of Hi-storic Places and are at least 60 years old.

Third, the Federal Historic Preservation Tax Incentives Program supports historic preservation and co-mmunity revitalization. This one-time incentive includes a 20 percent credit against federal income tax owed the year of project completion. To qualify for this credit, it is recommended to plan with this incentive criteria in mind at the beginning of a preservation effort.

One good example of a recent federal historic preservation tax credit project is Birmingham School of Law.

These three types of tax credits for historic buildings can mean a significant cost savings for a business while adding meaningful architectural character and curb appeal to a city.

To find out if your business is located in the Downtown Gadsden, Alabama City, or Attalla Historic Di-stricts or if you are interested in opening, expanding, or relocating in those areas, check at the Gadsden or Attalla city halls. Maps are available of these historic districts.

The Vagabond feels that all three historic districts have an excellent collection of 19th and 20th century historic buildings that are undergoing rediscovery and rehabilitation. All are encouraged, especially those who are interested in economic development, to take advantage of these assets and also to investigate the historic tax credits available for them.”

Further information can be obtained from Linda Nelson at futurepast44@gmail.com.