Advocacy is one of the three parts of the Preserve Arkansas’s mission. As the only statewide nonprofit organization dedicated to saving Arkansas’s architectural and cultural heritage, Preserve Arkansas is often in the thick of the battle. From saving historic buildings such as Carnall Hall and the Donaghey Building to promoting preservation-friendly legislation locally and at the State Capitol, Preserve Arkansas works diligently to promote preservation efforts across the state.
Arkansas’s Historic Rehabilitation Tax Credit is an economic development tool and one of the few financial tools to leverage private investment in those places that make Arkansas communities unique. Since Act 495 of 2009 was signed into law, $11.6 million in state tax credit has leveraged over $94.5 million in private and public investment in across Arkansas in downtown districts, neighborhoods and rural communities.
As the result of investment incentivized by the 25% Rehabilitation Tax Credit, over 260 distinctive historic buildings, many of which were previously vacant or underutilized, have been rehabilitated and placed back into active use as homes for Arkansas families, offices, restaurants, schools, museums, churches and other integral pieces of the vibrant culture and economy of our communities and state.
But the State Rehabilitation Tax Credit needs to be expanded to be improved by expanding per-project and overall aggregate caps and here’s why:
The current program is only an effective incentive for small and medium-sized projects.
The maximum credit available per project is $125,000. Changes to the program during the last legislative session limited the number of credits that can be earned to one per building in a 24 month period. While this change was necessary to ensure that the credits remain accessible to property owners throughout the state, the change made clear the need for expanded per project cap to incentivize rehabilitation of large projects. There are a limited number of very large buildings in the state, but these are often the most iconic buildings in a given community and their rehabilitation has potential for the greatest impact. These are also the places have been vacant or under-utilized the longest and that face the biggest challenges for redevelopment. A stronger incentive is needed to turn these places from liabilities to assets.
Arkansas has the lowest tax credit caps in the region.
Arkansas’s current annual allocation and per-project cap are not competitive with surrounding states. With such a low cap, the financial benefit to a very large project is minimal and often not worth using credits due to administrative costs and time. This creates an incentive for historic rehabilitation investment dollars to go to projects in other states.
Click here to contribute to the Tax Credit Advocacy Fund and/or to join the statewide coalition to strengthen the Arkansas Historic Rehabilitation Tax Credit.
The Historic Tax Credit Improvement Act (H.R.3856/S.2655) makes long overdue changes to the Historic Tax Credit (IRC § 47) to further encourage building reuse and redevelopment in small, midsize, and rural communities. It also makes the rehabilitation of community projects like theaters, libraries, and schools easier while maximizing the impact of state historic tax credits. Finally, the bill would make more historic properties eligible to use the credit by updating program requirements to reflect current industry practices. These reforms would be the first major changes to the Historic Tax Credit (HTC) since the Tax Reform Act of 1986.
Since 2012, Preserve Arkansas has worked to advocate for increased funding for historic county courthouses throughout the state through the dedicated funding source of the Arkansas Natural and Cultural Resources Council.
Preserve Arkansas adds a statewide voice to local advocacy efforts throughout Arkansas. Some of the issues in which we are involved in promoting (and you can get involved too!)–
William E. Woodruff House, Little Rock
White River Bridge, Clarendon
Downtown Hot Springs