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Historic Tax Credits News Briefs - June 2023

Arkansas Gov. Sarah Huckabee Sanders signed into law two bills April 13 that extend the state’s historic rehabilitation tax credit (HTC) for five years and change the tax credit percentage depending on locale. S.B. 461 changes the tax credit percentage from 25% to 40% for properties in cities with fewer than 10,000 residents, 35% for cities with populations of 10,000 to 50,000 and 30% for properties in cities with more than 50,000 residents. S.B. 462 extends the sunset date for the state’s HTC from June 30, 2025, to June 30, 2030.

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Multiple amendments to Texas’ state HTC took effect April 30. A slate of adopted rules issued in April by the Texas Historical Commission aimed to better align Texas’ HTC with the federal HTC. Five sections saw revisions to combine, clarify and amend information.

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A bill introduced in March in the Louisiana legislature would extend the state HTC and make eligible for the state HTC historic structures that are either individually listed or deemed as a contributing element within a National Register Historic District as well as historic structures in rural areas. H.B. 483 would extend the sunset date for the credit from Jan. 1, 2026, to Jan. 1, 2029, and also defines “rural area,” as a parish with a population of less than 100,000, a municipality with a population of less than 35,000 or an unincorporated area of a parish with a population of 100,000 or more. Under the bill, properties in rural areas would be eligible for a 30% state credit, while all other recipients would receive a 20% credit.

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Minnesota’s state HTC developments in fiscal year 2022 are expected to generate nearly $350 million of economic activity, according to a report released in April by the University of Minnesota Extension. “Economic Impact of Projects Leveraged by the Minnesota Historic Rehabilitation Tax Credit: Fiscal Year 2022” found that, from 2011 through 2022, Minnesota’s state HTC generated more than $5.8 billion in economic activity. Minnesota’s HTC, enacted in 2010, expired June 30, 2022.

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The $32 million rehabilitation of the Edward Wren Building in Springfield, Ohio, was awarded $4.5 million in HTCs. The site previously hosted a department store and a bank and was once slated for demolition. Developer Dillin LLC is working with local nonprofit The Turner Foundation to revive the property into a mixed-use site with 89 apartments and more than 13,000 square feet of retail space on the ground floor.

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The former Carnation Milk factory in Tupelo, Mississippi, is slated for conversion to a 33-apartment senior property. Intervest Corp.’s plans call for two market-rate apartments and the remainder to host residents ages 55 and older who earn as much as 30% to 60% of the area median income. Since closing in 1972, the factory has hosted the police department, city offices and a museum. Hunt Capital Partners provided $13.5 million in federal low-income housing tax credit and federal HTC equity as well as $2.5 million in Mississippi HTC equity financing.

Journal Category:

Historic Tax Credits

Authors:

Novogradac

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