Designation of the Pabst Brewery site as an historic district may make it easier for building purchasers to obtain grants to finance renovation of the structures.But related restrictions designed to protect the outward appearance of the buildings could make it difficult for developers to create new windows and undertake other work that could make the structures more usable.
According to Brian McCormick of the Wisconsin Historical Society (WHS), companies that redevelop the older, more historic, buildings in the Pabst redevelopment district may be eligible for an income tax credit equal to 25% of project cost.
"There is a district there that our office believes is eligible for the register of historic places," McCormick said. "They would not need to be listed before taking advantage of the tax credit. But they would need to show through the application you are eligible (for listing on the Register of Historic Places) individually or as part of a district."
McCormick explained that the tax credit program provides for a credit of 30 months to get listed on the national register. That allows the WHS and the U.S. National Park Service to rapidly process the application for the tax credit program while the slower process of being listed on the register takes place concurrently. The turnaround time for the tax credit approval is typically 60 days, according to McCormick. The applicant is then allowed 30 months to become listed in the register.
Tax credits are primarily aimed at income-generating properties. In the case of a $5 million project to renovate an historic property, the developer could write off $1 million of the income generated by that property. The credit can be applied in multiple years – up to 10 years – if it takes that long to liquidate the investment.
Some approvals tough
According to Engberg Anderson Design Partnership’s Chuck Engberg, the type of work that qualifies for the tax credits has changed over time.
"When it first came out, it had to do with preservation of the exterior," Engberg said. "But as people have made inquiries and so forth, the clarification has been that certain external building system costs are also deductible – HVAC, plumbing, fire protection."
In some situations, it may be difficult to get approval from the city to make changes to buildings necessary to make them marketable.
"New windows would be difficult to approve," McCormick said. "Some of the buildings have windows that have been bricked up. Certainly opening those up again would be acceptable or encouraged. But buildings with few no windows … those are going to be very problematic for someone to redevelop if they can’t come up with a new use that does not involve opening windows on a primary façade. Maybe they can put new windows on a secondary façade that does not face the street."
April 26, 2002 Small Business Times, Milwaukee
