by Chris Travis, Chief Operating Officer for Capstone Building Corporation
A short drive through the grid of downtown Birmingham three years ago was a far cry from idyllic – crumbling walls, empty hotels, and long-forgotten office buildings greeted you around every corner. Today there is a much different atmosphere in downtown Birmingham, the city is starting to live and breathe again. From the brand-new lights of the Lyric Theatre to the gilded walls of the Florentine and the iconic Redmont Hotel, the city is transforming. Downtown Birmingham is introducing a new generation of citizens to its once-abandoned treasures.
It’s a scene also materializing in Mobile, Anniston, Tuscaloosa and other metros of Alabama. The catalyst for the transformation of these Alabama landmarks was the 2013 creation of a historic preservation income tax credit by the Alabama State Legislature. The program allotted $20 million each year from 2013 to 2015 for owners to restore income-producing residential or commercial properties across the state.
Alabama became one of 34 states to implement a historic tax credit program. These past three years served as a test-run to gauge the program’s potential; it has surpassed expectation. The Alabama Historical Commission released a study earlier this year stating that the historic tax credit program has been responsible for more than $384 million in private investment in the state since implementation. Additionally, the study laid out how every dollar the state invested in program will be compounded for a $3.90 return over a 20-year period. This means the state would break even on its investment of $60 million for the first round of the program by 2019.
This year, the legislature is tasked with either extending the program for seven additional years, or halting the incredible architectural and design work our state has recently enjoyed. Currently, 39 historic renovations have begun or been completed with the help of historic tax credits. An additional 13 projects are already on the waiting list, and are dependent upon the extension of the credit.
The bill to extend the program passed the House by a wide margin and has now moved to the Senate, where a vote is likely next week. The passaged of the bill, and its subsequent signage by Governor Bentley, is vital for the continued rejuvenation of Alabama.
Capstone Building Corporation is slated to handle construction for an upcoming project in downtown Birmingham that was awarded historic tax credits. The building has sat empty for many years, albeit for the left behind belongings of its former tenants. The building needs work, a great deal of it, and restoration is only financially feasible because of the historic tax credit program. The program will enable the building to become useful and profitable again.
Critics have argued that the state should not be offering developers a leg up incentive, and worry that people would become too dependent on the credit. The jumpstart the program has given, specifically, the city of Birmingham is undeniable. Birmingham is growing and becoming vibrant again, maintaining its southern charm while nurturing a cosmopolitan mentality. With an extension of the historic tax credit, the program will be able to spread its reach and provide benefits for landmarks outside the metro areas.
The revitalization of historic properties allows for a city to move forward into the future while embracing and honoring its past. Citizens have heralded the finished projects, and are eager to support and help them succeed. The program has fostered an intense appreciation in the craftsmanship and history of Alabama’s historic landmarks. That emergence of hope should be encouraged and continued through the historic preservation income tax credit.