HB-1311 – Fact Sheet

COLORADO JOB CREATION & MAIN STREET REVITALIZATION ACT

HB-1311
Rep. Leroy Garcia, Rep. Tim Dore
Sen. Pat Steadman, Sen. Larry Crowder
( 34 bipartisan co-sponsors)

MAIN STREETS ACROSS COLORADO ARE IN CRITICAL NEED:

Many of Colorado’s traditional main streets are at a tipping point. Many buildings are vacant, their historic facades in decay and their local economies in desperate need of investment and revitalization. Colorado was one of the first states to create a Historic Preservation Tax Credit in 1990, but there is significant need to improve this tax credit so that Colorado remains competitive with neighboring states and that the credit can be better used to attract critical commercial reinvestment, rehabilitation and revitalization of main streets across our state.

The improved tax credit is modeled after successful, bipartisan legislation passed in other states that provide critical incentives to get languishing buildings back into viable use, while simultaneously spurring tremendous economic growth, job creation and historic preservation in rural and metro areas.

THE CHALLENGE:

• Create jobs and boost new economic development in communities across Colorado
• Attract private capital investment that is currently flowing into other states to revitalize historic main streets and commercial buildings, creating new business, housing, and shopping while generating local governments revenue
• Protect Colorado’s unique historic structures while increasing cultural heritage tourism

THE ANSWER:

• Modernize Colorado’s state income tax credit for the rehabilitation of historic commercial buildings & districts
• The tax credit (a percentage of rehabilitation costs) can be taken directly by the property owner or transferred to a financial partner who provides funds for the rehabilitation work
• State tax credits can be combined with additional federal incentives, driving new revenue into local communities and closing the “development gap” that arises from the high cost of rehabilitating historic structures
• All rehabilitation must meet strict standards and retain the historic character of the building

WHY A TAX CREDIT FOR HISTORIC COMMERCIAL PROPERTIES?

• Studies in other states have proven that transferable tax credits for historic commercial projects work.

o In Ohio, every dollar of state tax credit leverages $6.25 in investment. In Minnesota, every tax credit dollar creates $8.32 in economic activity and in North Carolina it generates $12.51 in economic benefit.
o In a 2008 study of Virginia’s tax credit over the last decade, $355M in tax credits (avg. $35M a yr) spurred the rehab of more than 1200 historic buildings, generated an economic impact of over $1.6B to and created more than 10,700 jobs and $444 million in wages and salaries

• An effective tax credit will increase the use of the federal rehabilitation tax credit, bringing more federal dollars into the state to help revitalize local communities and preserve Colorado’s unique rural and cultural heritage
• Keeps Colorado competitive and attracts private capital to the state that is being invested in neighboring states
• Allows non-profits to take advantage of the tax credit if they invest in rehabilitation of historic buildings
• The tax credit reinforces the goals of both political parties to build a business-friendly environment, retain, grow and recruit companies to communities across the state and increase access to capital

WHO WOULD BENEFIT?

• Cities and towns across Colorado – especially those damaged in recent disasters – seeking to create new jobs, reactivate historic buildings with new businesses, add housing, preserve their cultural heritage and attract tourism
• Local leaders who need their property values and tax revenues to rise to pay for local services
• Property owners who can’t afford to rehabilitate store fronts or bring their property up to code
• Small businesses & non-profits seeking an attractive and convenient space to start or expand their operations
• The State of Colorado by spurring economic growth and tax revenue from new jobs and tourism

HOW THE BILL WORKS:

The bill is modeled after successful bipartisan legislation in other states and establishes two eligibility pools for the commercial tax credit, one pool for smaller projects and one for larger projects. The tax credit would not go into effect until FY16-17 and the total amount of tax credits would be capped at $5 million in FY16-17 and capped at $10M each year for years FY17-20 and then sunset. Although many states do not have any caps, this program would allow Colorado to begin competing with other states.

• Smaller Historic Rehabilitation Projects: One pool is set aside for smaller historic preservation projects with Qualified Rehabilitation Expenses (QREs) of less than $2 million.

o Minimum expenditure to equal 25% of original purchase price, less land value
o All projects must be certified by the State Historic Preservation Office
o Projects below $2M of QREs will receive a 25% state tax credit. All credits are transferable and can be taken directly by the property owner or transferred to a financial partner who provides funds for rehabilitation work
o Projects located in state and/or federal disaster designations will qualify for an additional state tax credit of 5% of QREs if placed in service up to 8 years following such designation.

• Large Historic Rehabilitation Projects: The second pool is set aside for larger historic commercial projects with significant capital investment with projected QREs in excess of $2 million.

o All projects must be certified by the State Historic Preservation Office
o Minimum expenditure to equal 25% of original purchase price, less land value
o These projects will receive a 20% state tax credit for all QREs and credits are transferable with a maximum tax credit per of $1 million.
o Large projects located in state and/or federal disaster designations will qualify for a state tax credit of 25% of QREs if placed in service up to 8 years following such designation.

• Strict Safeguards with Predictable Funding Structure:

o The program is strictly structured so that the State approves applications up front but no tax credit is realized until projects are completed and all construction investments have been made.
o Only rehabilitation projects that begin on or after 1/1/15 are eligible for the tax credit and no credit will be issued until FY16.
o Only properties designated historic at the local, state or national level are eligible and a minimum expenditure is required equal to 25% of the original purchase price of the property.
o Third party audits are required on projects with anticipated tax credits over $250k
o A report will be made to the General Assembly in FY17 regarding the program’s impact on job creation and economic development.

 LEAVE A LEGACY BY SUPPORTING HB-1311:

Coloradans from all walks of life and every corner of the state would benefit from the Colorado Job Creation and Main Street Revitalization Act and its impact will be felt for generations. The following Colorado’s economic development organizations and historic preservation groups are just some of the organizations asking you to support HB-1311:

-Colorado Municipal League – Colorado Counties Inc. – Colorado Competitive Council (C3)
-Pueblo Chamber of Commerce – Action 22 – Progressive 15
-History Colorado – Colorado Realtors Assoc. – Colorado Preservation Inc.
-Urban Renewal Authority – Historic Pueblo Inc. – Nat’l Trust for Historic Preservation
-Downtown Denver Partnership – Historic Denver – American Institute of Architects-CO
-Independent Bankers of Colorado – Alliance for Sustainable CO – Downtown Colorado Inc.

 

This entry was posted in News. Bookmark the permalink. Trackbacks are closed, but you can post a comment.

2 Comments

  1. Frankie Black
    Posted September 8, 2014 at 12:06 pm | Permalink

    WE ARE LOOKING AT A HISTORICAL BUILDING LOCATED IN PITKIN COUNTY WHICH WE WOULD LIKE TO RENOVATE AND TURN INTO A COMERCIAL BAKERY/COFFEE SHOP. WE WOULD RESTORE THE BUILDING TO ITS ORIGINAL DETAIL. TELL ME WHAT THE REQUIREMENTS ARE AND THE BENEFITS ARE. THE BUILDING WAS COMPLETED IN THE 1890’s. MY FAMILY IS A LONG TIME RESIDENT OF THE VALLEY AND I WOULD LIKE TO CONTINUE THE TRAITS.

  2. Posted April 15, 2014 at 9:32 pm | Permalink

    This sounds like a great bill, which will help the owners of our historic sites. Please vote for HB 1311

Post a Comment

Your email is never published nor shared. Required fields are marked *

You may use these HTML tags and attributes <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

*
*

*

Donate to CPI

We hope you will extend your appreciation for Colorado's past into an investment in its future by making a tax-deductible gift today.

Featured Project

4 Bar 4 Ranch

Homesteaded in 1895 by Dick McQueary to provide a stop for the Georgetown Stage Line, the 320-acre 4 Bar 4 Ranch has strong ties to Grand County and Colorado's heritage. The Georgetown Stage Line traveled on the road through the 4 Bar 4 Ranch from Idaho Springs to Hot Sulphur Springs over Berthoud Pass. In 1895 a roadhouse and stage stop were constructed on the ranch. The hotel and barn were constructed using trees from the Ranch property, and the hotel remained open for travelers coming over Berthoud Pass by horseback and wagon until 1913. With the coming of the automobile, the roadway over Berthoud Pass and through the 4 Bar 4 Ranch was considered an integral part of the Trans-Continental “Midland Trail” highway. Following the closing of the stage line, the ranch continued to host travelers until 1912 or 1913 when it was purchased and converted into a Ford Motor Company . Ford vehicles were sold here until 1917, when Harry Larkin purchased the ranch site. Today emergency efforts are underway to ensure it survives through the winter. Donations are in need. To learn more, contact Jennifer Orrigo Charles at jorrigocharlges@coloradopreservation.org.

Join our Email List