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2018 Alabama Historic Tax Credit list proves strong demand for investment

Last week, The Alabama Historical Rehabilitation Tax Credit Evaluating Committee approved requests for funds to be allocated to three historic renovation projects in Birmingham. These projects, as well as those projects that were approved for the wait list for 2019 allocation, prove the demand for historic rehabilitation is strong in Birmingham and Alabama.

The Historic tax credit continues to be an important tool for stimulating investment and job creation and improving the quality of life in towns and cities across the state.  Without the tax credit many of these projects would struggle to come to fruition.

The Committee reviewed requests for tax credits from 25 projects across Alabama that added up to a potential of $210 million in investment.  These projects applied for a total of $36 million in tax credits from Alabama.  While only $20 million is available annually, many of these projects are in line for the 2019 allocation.

These projects include:

The Alabama Historical Rehabilitation Tax Credit is a refundable tax credit available to those who substantially rehabilitate historic properties that are listed in or eligible for the National Register of Historic Places and are 60 years old or older. The tax credit provides jobs, increases the tax base, and revitalizes existing buildings and infrastructure, while preserving and rehabilitating Alabama’s historic properties.

“REV has long been an advocate for the historic tax credit — from utilization of the incentive to good policies supporting it,” said REV CEO David Fleming. “We were involved in the legislative process to get Alabama’s historic tax credit established and later renewed, and REV’s team is a good resource for developers on how HTC works and where it can work. We believe in historic preservation as a key public policy objective for revitalization — one that ultimately benefits the city to a greater degree than sometimes even new development does. REV is always eager to support the revitalization of Birmingham’s historic buildings both large and small.”

Changes to the incentive program were introduced for 2018, capping the total amount of allotted tax credit each year to $20 million. No single project can receive more than $5 million and a portion of the overall allotment must be reserved for projects in rural areas. This year, $8 million of the $20 million was set aside for non-city projects. In addition, applications for historic tax credit are now reviewed and ranked by the Evaluation Committee as opposed to the previous system of credits given on a first-come, first-serve basis.

According to AL.com, the Protective Life Building renovation will be conducted by Rhaglan Hospitality. The group will put their $5 million allocation toward turning the vacant 14-story tower into a full-service luxury hotel with a total of 96 guest rooms. This will not only create a new draw to downtown but will open nearly 100 new job opportunities.

According to Birmingham Business Journal, the Family Services Laundry Building transformation project received the requested $1.668 million allocation, and the Martin Building renovation was approved for $182,182 of its $3 million request, with the remainder waitlisted until the 2019 allocations.

“Historic tax credits help save the magic pieces of our city that no new construction would be able to bring back. Like Birmingham’s beautiful old terminal station – once it’s gone, it’s gone,” said Fleming. “I’m encouraged by the community’s interest in historic preservation and adaptive reuse as I see property owners, developers and partners across the city working together to breathe new life into old buildings – and I look forward to seeing the Protective Life Building, 2200 Magnolia Building, and the Martin Building projects rejuvenated this year.”

14 other projects made the waitlist, nine of which are in Birmingham. Included in these are the projects at the Swalley Building (also known as the Merchants & Manufacturers Warehouse) in Parkside, which is being transformed into a mixed-use concept called The Denham Building.

Other Birmingham projects on the waitlist include:

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