Park Service Outlines Proposals for Improving Historic Credit Program

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Stakeholders have reacted favorably to recommendations made by the National Park Service for promoting greater awareness, efficiency, and use of the federal historic rehabilitation tax credit program.

The proposals are laid out in a report submitted recently to the outgoing Secretary of the U.S. Department of the Interior, Ken Salazar, who requested it. Salazar has been succeeded as Interior Secretary by Sally Jewell, who was confirmed by the U.S. Senate.

The program provides developers a federal tax credit for 20% of the rehabilitation costs incurred in substantially rehabilitating certified historic buildings. Rehab plans must be approved by the Park Service and state historic preservation office (SHPO) and the work must conform to the Secretary’s Standards for Historic Rehabilitation.

Salazar asked the Park Service to review the historic tax credit program and focus on ways to promote greater public awareness of its benefits and eligibility requirements, increase its effectiveness and utilization, and strengthen program partnerships with SHPOs and local communities. He also asked for the review to seek ways to ensure that the program maximizes opportunities to promote economic development and revitalization, particularly in urban areas.

As part of its review, the Park Service considered comments and suggestions made by attendees at a Detroit meeting in late January and submitted afterwards by program stakeholders.

The report describes eight proposed action items outlining plans by the Park Service for additional Webinars and training sessions, discussions of tax code issues with the IRS and Treasury, additional guidance clarifying and interpreting the Secretary’s Standards, possible revision of its policy on functionally related historical buildings, the establishment of an historic tax credit inter-agency group, and other steps (see sidebar at bottom on Action Plan items).

The report also notes that the Park Service has entered into a cooperative agreement with the Rutgers University Center for Urban Policy to develop a report on job creation and other economic impacts of the historic tax credit program. The Park Service says it will also post additional content for the program on its Web site, release a new fillable PDF version of the certification application, and produce a special report highlighting how the program has benefited communities nationwide.

Jeff Huggett, a partner at Dominium, a Minneapolis-based company that develops multifamily housing projects, including a number that utilize federal historic tax credits, had a positive reaction to the Park Service’s proposals for enhancing the historic tax credit program. “Promoting greater use of it is a good idea,” he said. “Re-using existing buildings is a good thing to do.”

He was hopeful for additions to the Park Service’s Web site materials on the historic tax credit such as best practices and examples of specific projects and how the Park Service treated particular issues in those projects, such as windows. “Sometimes different building components get treated differently [by Park Service reviewers] in different regions of the country,” he said. “The more consistency you can get the better.”

“This effort has real potential to help developers involved in historic preservation transactions,” said Thom Amdur, Executive Director of the National Housing & Rehabilitation Association and its Historic Preservation Development Council. “I’m very encouraged by the initial steps taken by Stephanie Toothman and Brian Goeken in implementing the Interior Secretary’s recommendation. NH&RA looks forward to working with the National Park Service in the coming months to effect more positive change for the historic credit program.”

Washington, D.C. historic preservation consultant William MacRostie, principal of MacRostie Historic Advisors LLC, praised the Park Service’s “good faith effort” to review the historic tax credit program and its procedures and to address issues and concerns that have been raised by industry stakeholders.
(Park Service report: http://tinyurl.com/caq5gsm)

Action Plan Items

Action 1 – Additional Webinars and Training. Beginning in 2013, the National Park Service will offer a series of webinars in support of the tax incentives program for program users, State and local partners, and the general public, as well as (dependent upon budgetary and travel limitations) additional training and workshops. (January 2013 and continuing)

Action 2 – Strong Cities, Strong Communities Initiative. The National Park Service will partner with the White House Council on Strong Cities, Strong Communities and the Department of Housing and Urban Development on the tax incentives program as part of the Strong Cities, Strong Communities Initiative (SC2), beginning with an initial partnership effort along with the Michigan State Historic Preservation Office to promote greater use of the tax incentives program in Detroit as part of that city’s pilot SC2 Community Solutions Team. If effective, this initial partnership effort with SC2 could be repeated in other SC2 pilot communities, or in other economically depressed communities generally. This effort is anticipated to predominantly consist of webinars and training under Action 1, as well as additional technical assistance. One such workshop, jointly sponsored with the Michigan State Historic Preservation Office, was already held on January 25th in Detroit to coincide with the Secretary’s meeting. (Spring 2013 and continuing)

Action 3 – Tax Code Issues. The National Park Service will meet with the Department of the Treasury and the Internal Revenue Service to discuss the issues raised as part of the January 25th meeting, as well as in other forums, related to tax policies that may restrict appropriate usage of the historic preservation tax incentives. (Spring 2013)

Action 4 – HTC Federal Inter-Agency Group. The National Park Service will form a historic tax credit inter-agency group with the Department of Treasury, the Internal Revenue Service, the Department of Housing and Urban Development, the White House Council on Strong Cities, Strong Communities, the Department of Energy, and the Environmental Protection Agency to better coordinate, as necessary, on issues related to the tax incentives program. (Spring 2013 and continuing)

Action 5 – Certified Local Governments and Local Partners. The National Park Service will look for additional opportunities to strengthen its partnerships with State Historic Preservation Offices, local communities and the Main Street program and promote the tax incentives program in economically depressed areas, particularly through the Certified Local Government (CLG) Program. The National Park Service will also promote the program to local communities through its 50-state America’s Great Outdoors initiative. (2013 and continuing)

Action 6 – Clarification of Guidance in Interpreting and Applying the Secretary of the Interior’s Standards for Rehabilitation. The National Park Service, in consultation with the State Historic Preservation Offices, historic preservation partners, and other stakeholders, will reexamine and revise as appropriate its interpretation of the Standards with the goal of identifying additional opportunities to provide greater clarification and/or flexibility in addressing especially challenging projects in the following areas (December 2013):

  • Differentiating between levels of significance in interior spaces and making changes to secondary spaces
  • Making changes to certain types of assembly spaces as part of adaptive reuse projects
  • Applying Standard 1 in cases of continuing historic use, where modern needs may necessitate specific interior changes
  • Identifying changes to a historic building that have occurred over time and have acquired historic significance in their own right
  • Applying Standard 2 to interior spaces, features and materials in highly deteriorated condition

Action 7 – Policy on Buildings Functionally Related Historically. The National Park Service, in consultation with the Internal Revenue Service, State Historic Preservation Offices, historic preservation partners, and other stakeholders, will reexamine and revise as appropriate its policy, and possibly regulations, regarding the review of rehabilitation work within large, functionally-related multiple-building complexes in single ownership. (December 2013)

Action 8 – Administrative Guidance. The National Park Service, in consultation with the State Historic Preservation Offices, historic preservation partners, and stakeholder representatives, will reexamine and revise as appropriate the following policies and administrative guidance (December 2013):

  • Improving the preliminary consultation process
  • Reducing review times for routine project amendments