Late in the day on February 20th, both Senate Bill SB 668 and Assembly Bill AB 793 passed with bipartisan support to increase the cap for the historic tax credit from $500,000 to $3.5M per project. The Senate bill with a count of 29-3 and the Assembly bill wit a count of 95-0. This will now go to the Governor for signature. The last budget included a per-project cap of $500,000. This has been a long-fought process that has garnered widespread interest and Statewide involvement. A strong coalition of preservationists, economic development groups and real estate organizations advocated for the increase. Click HERE for the issues brief that was distributed at the Commercial Real Estate and Government Day. During this process of changes to the State program, as a result of tax reform, the federal Historic Rehabilitation Tax Credit program was also changed (click HERE for more information).
Big thanks to Senator Darling for introducing the bill in a very compact session, and for legislative leaders, for taking up the measure. Members and volunteers spent hours contacting legislators, meeting with partners, and collecting information that ultimately led to a successful outcome. Those contacts matter greatly, and we hear from legislators when a Call To Action is acted upon.
The following points were used to advocate for the new legislation.
Wisconsin’s Historic Tax Credit Program is a proven low risk – high return on investment program that helps to create jobs across our state and support important economic development projects in Wisconsin communities both large and small. The value of the credits offered through this program are fully repaid to the state after just four years and over a ten year period the state gets an $8 to $1 return on this investment.
Top reasons to support the Wisconsin Historic Tax Credit Program
- It’s a low risk–high return program. The credit may not be claimed until the project is complete. If the project fails, the state does not pay out its credit. No project, no credit.
- The credit is a job creator. Nearly 11,000 full-time construction jobs will be generated on projects started between 2014-16, and nearly 5,000 full-time jobs created once those projects are operational after construction.
- The credit is fully repaid by the end of the fourth year after construction is completed, and over a 10-year period the state gets an $8 to $1 return on investment.
- Communities small and large are benefitting from development supported by the credit. In fact, there’s an emerging trend of more small communities benefitting from historic tax credit projects. In 2016, 67 percent of all such projects were in smaller communities, up from 46 percent in 2015 and 39 percent in 2014.
- Smaller communities benefitting from the credit, include Plymouth, Superior, Fond du Lac, Evansville, Platteville, Darlington, Waupaca, Wausau, Prairie du Chien, La Crosse, Manitowoc, Watertown, De Pere, Oshkosh, Neenah, and Kenosha. In 2016, 38 projects received approvals to proceed, 30 of which were in cities other than Madison or Milwaukee.
- The state benefits immediately. While a credit is not paid until a project is completed, tax revenue is generated immediately during the construction period. Credits issued to development projects between 2014 and 2016 are projected to generate more than $600 million in economic output, more than $90 million in new state tax revenue, while generating more than 10,000 new construction jobs.
- The credit stimulates an increase in property values. Reviewing tax records and mill rates for 118 projects using the credit between 2014-16, more than $3 million in various state and local property taxes were paid on properties assessed at a total of more than $113.1 million at the start of their redevelopment. Upon completion, it is estimated the properties will have a cumulative property tax assessment value of approximately $687.1 million and will pay more than $19.1 million in state and local property taxes.
- The credit is playing a significant role in reducing blight and opening the door for new utilization of older buildings in communities. In 2014, 60% of all projects using the credit were vacant more than 20 years. These projects would not occur without the historic tax credits and the buildings will continue to blight their communities.
- The credit is stimulating development throughout the state. Since 2014, when the credit was elevated from 5 percent to 20 percent of expenditures on qualified rehabilitation projects of historic buildings, Wisconsin has experienced a 67 percent increase in redevelopment of such properties.
Brown County Trust for Historic Preservation
CARW – Commercial Association of REALTORS® of Wisconsin;
Coakley Brothers/Brothers Business Interiors, Milwaukee, WI
Madison Trust for Historic Preservation;
Milwaukee Preservation Alliance;
National Trust for Historic Preservation;
The Kubala Washatko Architects, Cedarburg, WI;
UW Milwaukee Historic Preservation Institute;
Waukesha Preservation Alliance;
WEDA – WI Economic Development Association;
Wisconsin Bankers Association;
Wisconsin Homebuilders Association;
Wisconsin League of Municipalities;
Wisconsin REALTORS® Association;
Wisconsin State Council of Carpenters;
Wisconsin State Historical Society