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NEW REPORT: HISTO FOR LOUISIAN TAX CREDITS CAN BE A TOUCHY SUBJECT. Tax credits are financial incentives that allow individuals or businesses to recoup expenses deemed worthy by the state or federal government. In Loui- siana, tax credits in recent years have refunded dollars to individuals utiliz- ing renewable energy sources, companies looking to film movies or televi- sion shows in the state, and developers who are ready to rehabilitate a historic building, to name just a few examples. For some, tax credits have a bad rap. Many fiscal conservatives, especially those in state and federal leadership positions, see them as a waste, an unnecessary draw from the coffers. And perhaps some are — but not all tax credits are created equal. As many developers, political leaders and preservationists already know, state and federal historic rehabilitation tax credits have proven, for decades now, their ability to pay for themselves many times over — while simultane- ously revitalizing historic buildings and neighborhoods, and preserving the unique culture of a place. And for a state like Louisiana, which is filled with culturally rich towns and enviable historic built environments that give an undeniable authenticity and uniqueness, these credits have more than pulled their weight. Not only have countless buildings and neighborhoods been revitalized, but jobs have been created, tourism has surged, and local businesses have been bolstered thanks to the state and federal historic tax credits. (The federal credit, administered through the National Park Service, refunds developers up to 20 percent of quali- fying expenditures, and the state credit, managed by the State Historic Preserva- tion Office, awards another 25 percent of expenses back to developers.) Now, a new report commissioned and released this past summer by Loui- siana Lt. Governor Billy Nungesser titled, “The Historic Tax Credit: Building the Future in Louisiana,” proves unequivocally that utilization of historic re- hab tax credits within Louisiana have an incredible catalytic impact on towns across the state. The report analyzes use of the federal and state credit in the past 10 years to draw its conclusions. “We are in challenging fiscal times in Louisiana,” Lt. Gov. Nungesser wrote. “What we have learned from this report is that far from being a drain on the short-term budget, the historic tax credit pays long-term dividends, not just in paychecks and tax revenues, but in people, in culture, and in community.” The study reports that nearly $2.7 billion has been invested in Louisiana’s 28 PRESERVATION IN PRINT • www.prcno.org historic buildings in the past 10 years thanks to the Louisiana historic tax credit. Every $1 that the state of Louisiana provided for the state commercial rehab credit spurs $8.67 in additional economic activity. And the tax credit is only awarded after the project is complete and has been approved — but taxes are collected throughout the rehab process, meaning the state earns back $0.42 of every $1 tax credit awarded before the developer can even use the credit. Were it not for the state historic tax credit, the report finds, Louisiana’s towns would have lost out on an additional $1,273,000,000 in investment in the past 10 years — as well as nearly 1,500 new jobs, more than $78 million less in labor income, and almost $11 million less in state tax income. “We always refer to the state and federal historic tax credits as “but for;” i.e., but for these credits, the development projects that we have executed since Hurricane Katrina would not have happened,” said local architect and devel- oper Marcel Wisznia. “What the public does not realize is that oftentimes, it is more expensive to rehab an historic building than tearing it down and replac- ing it with new construction. The state and federal historic tax credits level that playing field, and allow designers and developers to keep the existing urban fabric. The tax credits bridge the gap between cost and value.” The report was written by PlaceEconomics, a Washington, D.C.-based con- sulting firm led by storied economist Donovan Rypkema. The firm has extensive experience in downtown and neighborhood commercial district revitalization, reuse of historic buildings, and rigorous analysis of preservation’s economic im- pacts; its staff of five all contributed to “The Historic Tax Credit: Building the Future in Louisiana” over seven months of research and visits across the state. One of the report’s more surprising findings was that half of all projects that utilized Louisiana’s historic rehab tax credit cost less than $500,000. Thus, the authors concluded, “the historic tax credit is fundamentally a small business incentive.” “While the tax credit is often thought of as a tool of big league de- velopers (and it is, and successfully so), half of all the tax credit projects were less than $500,000. This means it really serves as an effective “mom and pop” economic development tool,” Rypkema said. “Then in a place like Slidell — there are small scale projects, a local small business person who figures out how the tax credits work, who then becomes a mentor to other small business people for their own projects — it creates a wonderful small business-to-small business, neighbor-helping-neighbor story.” SEPTEMBER 2017