Policy Position Statement on Historic Tax Credits (Senate Bill 1150)

BACKGROUND:

The Lancaster Chamber is committed to doing all it can to improve the business climate throughout Lancaster. It is with that commitment in mind that the Board of Directors chose to get actively involved in local and statewide initiatives aimed at ensuring sustainable cities and boroughs in our County and throughout the Commonwealth.

Our involvement includes supporting positions aimed at reducing costly state mandates, amending Act 111 and pension requirements, encouraging regional cooperation and incentivizing economic development –all further defined in "Prosper or Perish," a report issued by a Task Force of the Mayor and affirmed by the Board of Directors of The Lancaster Chamber earlier this year.

In line with our commitment to encourage urban economic development, Senate Bill 1150, introduced by Senator Lloyd Smucker with bipartisan co-sponsorship, aims to offer tax credits to commercial property holders who redevelop and/or renovate eligible buildings within a municipality's designated historic district. The program would provide an incentive to reinvest and renovate historically significant structures throughout our oldest communities.

The bill establishes a tax credit in the amount of 25% for qualified rehabilitation expenditures of commercial projects within historic districts. Applications would be administered by the Department of Community and Economic Development (DCED) and reviewed by the Pennsylvania Historical and Museum Commission to ensure the historic integrity of the project. DCED would not grant more than $10 million in tax credit certificates in a single fiscal year and a specific project may not exceed $500,000 in a single fiscal year.

Bills such as this that apply to the adaptive reuse of existing structures have been successfully used by other states to boost economic development and revitalization of cities by encouraging private investment in the city. For example, in eight years the Commonwealth of Virginia's tax credit program was credited with spurring private investment of approximately $1.5 billion in the rehabilitation of more than 1,200 landmark buildings. This investment in turn has generated an economic impact of nearly $1.6 billion in the Commonwealth and created more than 10,700 jobs and $444 million in associated wages and salaries.

POLICY POSITION:

The Board of Directors of The Lancaster Chamber of Commerce & Industry supports Senate Bill 1150, the Historic Rehabilitation Investment Incentive Act, and encourages its quick passage.

Historic tax credits would not only offer a great boost to economic development in the County of Lancaster, they would also aide in taking pressure off of suburban sprawl by making urban redevelopment more affordable, while aiding in the preservation of open space and farmland.