“The National Trust for Historic Preservation envisions a future where leaders who make decisions impacting our built environment consider the reuse of historic buildings as an essential strategy to create more inclusive, prosperous, and resilient communities. No policy better supports adaptive reuse of historic buildings than state and federal historic tax credits.” -State Historic Tax Credits: Maximizing Preservation, Community Revitalization, and Economic Impact, prepared by the National Trust for Historic Preservation, November 2018
The federal historic tax credit is an excellent example of how all levels of government can work together to improve our communities. Tax incentives for historic preservation protect not only culturally important spaces for future generations, but also generates significant economic returns on investment for the community.
The federal historic tax credit is a valuable tool to use to redevelop and to renew architectural treasures across the country. According to Robert Ivy, FAIA, CEO of the American Institute of Architects, tax credits are “an investment in our future, a commitment to honoring our collective history, and above all, a measure of our compassion as a nation.” The federal historic tax credit provides a 20% federal tax credit to income-producing properties that complete historically appropriate renovation work. To best leverage the impact of the federal historic tax credit, developers often use federal and state historic tax incentives in tandem.
Unfortunately, New Jersey has yet to enact the Historic Property Reinvestment Act, our state historic tax credit, initially proposed more than a decade ago and New Jersey is missing out on attracting redevelopment to our great state. Often developers avoid New Jersey in favor of our neighbors because we lack a state tax credit to offset costs associated with historic preservation projects. To that end, the New Jersey Chapter of the American Institute of Architects has taken the lead in lobbying for this valuable tool. Together with Preservation New Jersey, The National Trust for Historic Preservation and our partners in the development community, we are encouraging New Jersey to adopt a state historic tax credit.
Our coalition is heartened by governor Murphy’s stated support of a state historic tax credit. The goal is to implement a state historic tax credit that mirrors the federal historic tax credit as closely as possible. This will streamline the review process, encouraging more and quicker redevelopment. We have offered comment and support for over a decade on this important issue. Most recently, we have collaborated to examine the revised proposals from the New Jersey Economic Development Authority (NJEDA) and subsequent proposed bill from the Governor’s office. We have provided comments and met with NJEDA and the Governor’s office to advance an incentive that attracts private investment while tailoring the legislation to address state priorities.
The current proposed legislation is packaged with other tax incentive programs, and, therefore, has yet to be introduced to the state legislature. Despite its wide appeal, the Governor’s office does not want to promote the Historic Preservation Tax Credit Program Act (as it is now known) before the other incentives. The legislation will be introduced once broad support for all incentives is established. We remain hopeful that New Jersey will enact a state historic tax credit in the near future and encourage the administration and legislature to consider this important incentive on its own merits.
Michael J. Hanrahan, AIA is a Preservation NJ Board Member. He specializes in numerous project types, including historic preservation and the adaptive re-use of historic structures. In over twenty years with Clarke Caton Hintz, he has led the design teams for a number of historically and architecturally significant buildings. In addition, Michael volunteers his time to the profession, having served AIA NJ in a variety of capacities, culminating with his Presidency in 2011. Beyond serving on the Board of Directors for Preservation New Jersey, he also serves on the Board of Directors of Architect’s Housing in Trenton, NJ. Michael also is an active alumni of NJIT where he serves on the Board of Visitors for the Albert Dorman Honors College. Michael has been recognized for his historic preservation efforts wit the 2012 AIA Young Architect Award.