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Danville City Council voted unanimously Thursday night to adopt a resolution urging President Donald Trump and Congress to keep the Federal Historic Tax Credit Program, which encourages the redevelopment of historic and abandoned buildings.
In Danville alone, 20 properties have successfully applied for and received the credits since 2005. These projects have channeled $93.5 million of private investment in historic properties, resulting in 17 new businesses, seven business expansions and 443 new residential units.
These credits have been the main driver of redevelopment in the River District.
“As you are aware, most if not all of the projects in the River District would not have happened if not for the federal and state Historic Tax Credit Program,” City Manager Ken Larking said Thursday. “It is a great tool for reducing blight and encouraging reinvestment in historic cities like ours.”
Larking continued, saying, “Without this program, and based on the market rates that we get, it will be very difficult to get developers to take the risk to redevelop our several remaining historic buildings and they will, eventually, become blighted.”
Rick Barker, owner of the Danville-based real estate company that is renovating buildings in the 500 block of Craghead Street, agreed, saying Thursday, “The Federal Historic Tax Credit Program is the single most important economic development tool leveraged to revitalize Virginia’s historic downtowns. The program preserves our most important architecture and the wonderful histories that go with it. …. If the program is abolished, it would deal a significant blow to the momentum created in the River District in recent years.”
The program, enacted by the Reagan administration in 1981, is on the chopping block under the tax reform plan rolled out last week by U.S. House GOP leadership.
The City Council resolution says federal historic tax credits leverage four private dollars for every dollar of federal support, with the transactions having a 99 percent success rate.
In addition, the resolution says the historic tax credit projects are catalytic, building neighborhood confidence and generating follow-on projects for blocks around.
Prior to development, the 20 properties that have received the tax credits since 2005 generated $42,371 in annual real estate tax revenue. Today, they generate nearly $362,000 in annual real estate tax revenue. Additionally, these projects yield a positive impact on sales tax and meals tax revenues, annual payroll, business license fees collected and business personal property tax.
Local entrepreneur Steve DelGiorno, who most recently collaborated with Barker in opening Crema & Vine in the Old West End neighborhood, called the tax credits a vital component.
“As a small business operator and real estate developer, we see the historic tax credits as a vital component in, not only restoring the beautiful and historic real estate in Danville, but also as an impetus for new business development,” DelGiorno said Thursday. “We fear the loss of these credits will no longer make restoration and business expansion feasible in an area which is prime for such growth.”
Stephen Staats, a Richmond-based developer who has renovated the former Smith Seeds building on Lynn Street, agreed with DelGiorno.
“I have completed historic projects in Pennsylvania and Richmond. When I submitted my Part I for my first project in Danville, Audrey Tepper, who was in charge of the Federal Tax Credit Program, called me to thank me for taking on a project in Danville. She told me it is so good to see developers, such as myself, using the Federal Tax Credit Program to work in small towns, since without the use of the credits these historic buildings would most likely either stay vacant and/or fall into a state of disrepair.”