The state’s historic preservation tax credit, which under new legislation was increased from 10 percent to 20 percent of eligible expenditures at the beginning of the year, has been so popular with developers this year that state officials have decided to temporarily suspend the program to examine its fiscal impact on the state.
The state’s Department of Revenue and the Wisconsin Historical Society projected that $4 million in historic preservation tax credits would be allocated this year. But roughly halfway through the year the state has already authorized more than $35 million in historic preservation tax credits.
“The utilization of this credit has far exceeded the original estimates,” said Wisconsin Economic Development Corp. Secretary and CEO Reed Hall in a letter to the co-chairs of the Legislature’s Joint Finance Committee. “The impact of this program is further evidenced by the variety of applications that have been submitted, with projects encompassing everything from rural communities to urban city-centers. WEDC has seen a large influx of projects come through that will provide a considerable boost to their respective communities.”
If fully realized, the amount of historic preservation tax credits allocated this year could result in $180 million in additional economic development in the state, Hall said. However, the large amont of tax credits allocated demonstrates that need to examine the program’s fiscal impact on the state budget, he said.
“We’re weighing the economic benefit of continuing the tax credits against the budget impact,” said Kelly Lietz, spokesman for the Wisconsin Economic Development Corp. “We did get to a point that the buget impact (of the tax credits) needs to be considered.”
It is yet to be determined how long the moratorium on the historic preservation tax credits will last.
“That’s hard to say,” Lietz said. “We don’t have a sense of that right now.”
Fifteen projects in southeastern Wisconsin have received state historic tax credits this year, according to the WEDC. Those projects are:
– Rehabilitation of the Machinery Row Building as part of the Rootworks Project in Racine, $9 million tax credit
– Rehabilitation of the Posner Building in Milwaukee, $4.2 million tax credit
– Rehabilitation of the Pritzlaff Building in Milwaukee, $4.1 million tax credit
– Rehabilitation of an 86-year-old office building in Milwaukee, $3.4 million tax credit
– Rehabilitation of the Milwaukee Paper Box building in Milwaukee, $2.7 million tax credit
– Rehabilitation of a Pfister Vogel Tannery building in Milwaukee, $2.2 million tax credit
– Rehabilitation of the building at 700 W. Michigan St., Milwaukee, $1.3 million tax credit
– Rehabilitation of the former Juneau Theatre building on Mitchell Street in Milwaukee, $335,600 tax credit
– Rehabilitation of a building in the North Third Street Historic District by 1818 MLK Drive LLC in Milwaukee, $262,119 tax credit
– Rehabilitation of the Mitchell Building at 207 E. Michigan St. in Milwaukee, $240,000 tax credit
– Rehabilitation of the Best Place building in the former Pabst Brewery complex in Milwaukee, $100,000 tax credit
– Rehabilitation of the Dr. Volney L. Morre house in Waukesha, $26,000 tax credit
– Rehabilitation of the Kelleher-Weber House in Waukesha, $18,000 tax credit
– Rehabilitation of a 112-year-old Johnson Controls office building in Milwaukee, $16,000 tax credit
– Rehabilitation of the Southside Historict District in Racine, $12,493 tax credit