Schock introduces local jobs and economic development legislation

Scully Building project an example of positive effects

[July 15, 2011]  WASHINGTON -- U.S. Rep. Aaron Schock, R-Ill., has introduced legislation called the Creating American Prosperity through Preservation Act, or the CAPP Act, that would provide a boost to local economic development through the restoration and reuse of historic buildings. Schock, a member of the House Ways and Means Committee, the chief tax-writing committee, introduced H.R. 2479 to strengthen the historic rehabilitation tax credit already in place, and the bill is seen as a boost for the continued development of the warehouse district in Peoria.

"Historic preservation is an important cause in and of itself, but it also has demonstrated time and again that it can be a significant catalyst for economic growth," Schock said. "This legislation is an additional way to incentivize private-sector job creation by renovating and invigorating downtown areas -- most especially Peoria's Warehouse District."

Schock's legislation will strengthen the current tax credit and make it more usable by targeting it to the rebuilding of historic downtown main streets, while also encouraging every rehabilitation to become more energy-efficient. The historic preservation credit is a permanent part of the tax code, and according to the National Trust for Historic Preservation, historic rehabilitation has created thousands of local, high-paying, high-skilled jobs yearly. In 2009 and 2010, historic rehabilitation created over 145,000 new jobs. In Illinois, 3,188 jobs were created from historic rehabilitation tax credit investment between fiscal 2009 and 2010, according to the Historic Tax Credit Association

"The primary purpose of my legislation is to enhance the ability of smaller renovations to benefit for the tax credit. This includes buildings in the warehouse district," said Schock. "The historic rehabilitation tax incentive has already been in use. For example, the former YMCA building here in Peoria is a direct beneficiary of HTC tax credit."

The CAPP Act strengthens the economic development impact of the tax credit, which has been in existence since 1981 and has led to the rehabilitation of over 37,000 vacant or underutilized historic buildings, created over 2 million jobs, and leveraged over $90 billion in private investment. Specifically, the legislation will help smaller projects by increasing the credit from 20 percent to 30 percent for projects with $5 million or less in qualified rehabilitation expenditures. The CAPP Act also updates the date of construction timeline for the 20 percent tax credit and the 10 percent credit for non-historic older buildings. Thirty states have also enacted state tax credits to encourage the development of historic properties. Schock's legislation would eliminate the federal taxation of the proceeds of state credits transferred through partnerships and sold as state tax certificates.

The CAPP legislation will ensure that rural and smaller communities will benefit to a much larger extent. By strengthening the historic tax credit, it will help the credit adapt to the constantly changing economy and needs of communities. The legislation also promotes energy-efficiency and cost-savings by encouraging developers to use energy-efficient technology. A provision in the legislation would also facilitate the reuse of older buildings by nonprofits for projects of high community benefit while creating jobs and stimulating the local economy in low-income, underserved areas. The National Trust for Historic Preservation reports that since 2002, about two-thirds of all historic tax credit projects have been located in neighborhoods with family incomes at or below 80 percent of the area median.

In Lincoln, the effects of historic tax credits have already resulted in a major reclamation of downtown history with the restoration of the Scully Building.

The Scully Building was originally built in 1907 for the purpose of housing the Scully Estate offices that managed the land leases at the time. More recently the building became the home of the Abe's Carmelcorn Shoppe candy store and housed other local businesses.

In 2001, the apartments on the second floor of the building caught fire and much of the building was damaged. Work to repair the building began in 2009, and it was put back into service in September 2010. The building is part of the Lincoln's Courthouse Square Historic District and was built to comply with the guidelines set forth by the National Trust for Historic Preservation. When the project was completed, 20 local companies had worked together to restore the Scully Building.

During the spring of 2010, congressman Schock visited the project site to tour the building and receive an update on the progress of the renovation.

"The historic tax credits were a vital incentive for the project," said Patrick Doolin, owner of the Scully Building. "The project was 100 percent privately funded, and the historic tax credits played a huge role in making the project financially feasible. Without them we would have not taken on the project, and the building would most likely still be vacant and in disrepair. As I told the congressman when he toured the building, we were working to create our own, small, local, privately funded economic stimulus project. This economic development project for downtown Lincoln really boosted the morale of the local downtown and business community in a time of economic uncertainty."

[Text from U.S. Rep. Aaron Schock; LDN]