Much of what happens on the South Bend housing front in the years to come could depend on what happens in Washington, D.C. in the weeks to come.
The Historic Rehabilitation Tax Credit would be eliminated in the House passed version of the Tax Cuts and Jobs Act, and watered down in the U.S. Senate version.
“We have a housing proposal in the pipeline right now to renovate the old South Bend Brewery on Lincolnway West and we're pursuing historic tax credits,” said Marco Mariani, Executive Director of the South Bend Heritage Foundation.
The federal tax credits in question have been around since the 1980’s but only recently did they tip the scales on downtown South Bend renovation projects at the LaSalle Hotel and the Rushton Building.
“Well, this building sat vacant for at least 15 years, I think LaSalle probably the same number of years,“ said Mariani. “At this time when we're really seeing resurgence in our downtown, this kind of tax credit is hugely important.”
At the Rushton Building things like the main entryway, the wood frame windows, and even the doorknobs had to be true to the original design. “This building benefited from probably $400,000 in additional equity that was generated through the tax credits. That allowed us to complete the full historic preservation so it’s a local landmark, it’s a national registered landmark, and we needed every one of those dollars to help preserve all the interior items on this building and the exterior items.”
A tax credit program that helped to save so much history is now in danger of becoming history as final negotiations begin on a compromise version of the Tax Cuts and Jobs Act.
“Those projects are important that are completed because they are historic so they're preserving that legacy for communities across our country,” said Mariani. “The program has done what it's intended to do since 1984.”
It’s too early to tell what Congress intends to do, but the Historic Rehabilitation Tax Credit program was eliminated in the House version and weakened by the Senate (a tax credit that is now claimed all in one single year would instead be spread out over five years).