Since its inception in 1998 the Missouri Historic Tax Credit has been responsible for massive revitalization throughout Missouri’s urban cores and small towns. The program offers a credit equal to 25% of eligible rehabilitation costs and it is the incentive that has spurred a complete transformation of downtown areas in St. Louis and Kansas City, but has also uplifted depressed historic districts like Ste. Genevieve, Fayette, Moberly, St. Joseph, and De Soto. The recent ever-growing mix of innovation, artistic and creative companies, excitement for the future of Missouri’s cities and towns, and economic growth is critically tied to the re-use of Missouri’s historic buildings.
Yet the incentive responsible for these opportunities is currently under the gravest threat ever by state legislators, who propose to slash the cap on the Historic Tax Credit from $140 million (which is a reduction that has been in place for the past three years) to $45 million, a reduction which passed the Senate as part of SB120 last Wednesday. Such a devastating reduction would not merely reduce redevelopment opportunities, but would virtually eliminate any use of the credit. Why? Because it will remove the widespread availability of the credit, which is what allows homeowners and developers to count the credit as an essential part of their projects’ financing. This predictability of the credit is why the majority of redeveloped historic buildings in underused and depressed neighborhoods have been transformed into hubs of economic development. The KC Business Journal reported that some major developments in Kansas City would not be completed with the advent of this reduction.
Since it became law, the Missouri Historic Tax Credit has produced over 43,000 jobs, which is more than any other economic development program in the state’s history. Redeveloping an existing building or home requires more labor, and therefore creates more employment for skilled construction workers, architects, contractors, and financiers, jobs that can’t be shipped over seas. As business activity replaces vacant buildings, the total benefits amount to an economic boost in Missouri of over $1 billion every year. The Historic Tax Credit has leveraged over $6 billion in private investment.
The Historic Tax Credit makes money for the state. For every $1 issued through the Historic Tax Credit $1.50 is returned in state and local taxes as workers pay sales taxes, developers pay sales taxes, and owners pay property taxes. Yes, the Historic Tax Credit generates a net benefit to the state.
The Missouri Historic Tax Credit incentivizes essential investments in our towns and cities, benefits the state, creates jobs, restores our historical identity, promotes heritage tourism, and serves to be the biggest positive economic development force in Missouri. There is no economic justification to reduce the Missouri Historic Tax Credit.
Take a moment to email and call your state representatives, urging them not to reduce the cap on the Missouri Historic Tax Credit. The future of Missouri’s towns and cities is what’s at stake.