Investment Tax Credits
J. Christopher Frey
I regularly provide architectural and material consultation to Architects
and Developers who wish to obtain certified rehabilitation tax credits for
their properties. Generally, the buildings we work on range from small,
dilapidated rowhouses to large apartment buildings and old schools - with
budgets ranging accordingly. Our clients have found that their investments
can be maximized by rehabilitating these buildings and establishing them as
low-income housing units.
Just curious whether you see similar projects in your communities, or
whether you have a wider range of programs that use the tax credits.
--
J. Christopher Frey
Associate, Noble Preservation Services
http://www.noblepreservation.com
Blue Ox Mill
We are in northern California and are currently working on a project where
we are bringing buildings from the 1870's to the 1910's to a location next
to our mill site and will he creating an Historic Park using these
buildings. We are going to have a meeting with the State Architect to get
this "village" site designated A Point Of Historic Interest. This will
entitle us to the tax credits you spoke of. The outsides of the buildings we
are going to restore 100% but the insides we are going to open up and make
shops out of . These shops will house craftsmen performing various
traditional trades using traditional equipment. You can see our idea at
www.blueoxmill.com . Am I correct in assuming that if we are successful in
obtaining our credits, these would be calculated from the retail cost of the
items needed to restore the buildings not our cost? Eric
J. Christopher Frey wrote in message ...
J. Christopher Frey
Blue Ox Mill <blu...@humboldt1.com> wrote in message
news:sgcj45k...@corp.supernews.com...
> Am I correct in assuming that if we are successful in
> obtaining our credits, these would be calculated from the retail cost of
the
> items needed to restore the buildings not our cost? Eric
My understanding of the federal tax credit program is that there is a 20%
investment tax credit available on the overall cost of the project
specifically as relates to the rehabilitation (not landscaping, etc). This
includes your actual design fees, labor, materials, etc. - but would not
include any mark-up on the fruits of your efforts. Therefore, your property
will be worth more in the end, but the credits are applicable only to the
money you put into the project.
The National Park Service requires that, upon completion of the work, that
you submit a ("Part 3") Request for Certification of Completed Work, which
will include photographs documenting the nature and quality of work you
completed, and will also request financial information which is then
forwarded to the Internal Revenue Service. (That's where your costs are
entered and the amount of credits are determined). Additionally, should the
completed work differ from the work that was proposed and accepted in your
Part 2 Application (such as plan changes, design changes, etc.), you will
also need to submit an Amendment form describing the changes and the reasons
changes were made.
When we work on such projects, we keep in constant contact with the
Contractor, the Architect, the SHPO and the National Park Service to
determine whether any changes in the project will cause problems come
certification time. Usually, this is the best way to avoid headaches in the
long run.
Blue Ox Mill
our work. In other words a double hung casement window complete would leave
my shop at say $700 if sold to a customer, but it only cost me "X" to make
that window . So if I read what you've said correctly than maybe it will be
better for the park Nonprofit to stay separate from the millwork shop so a
straight retail billing can pass between the two entities. Dose that sound
right?
I think you can see the first three buildings and the architect drawing for
the village on our web sit at www.blueoxmill.com
...........................Eric
J. Christopher Frey wrote in message ...
J. Christopher Frey
In my opinion, since this is a product that you regularly manufacture, with
an established price tag, I can't see any reason why you couldn't charge
retail for that portion of the work. To tell you the truth, I haven't
worked in a situation where the building owner has acted as the lead on a
rehab and also functions as a craftsperson/tradesperson that manufactures
units to be used in the rehab.
My confusion on the issue resulted from my mis-reading of your previous
post, where I thought you were suggesting taking the credits on the market
value of the building after rehab rather than the costs associated with
rehabbing it. Sorry about that.
Let me know what the decision is - I'd be interested to learn more.
DRypkema
knowledge is rarely valuable. That having been said two issues leap forward
regarding your project and the use of the Federal Rehabilitation Tax Credits.
1) Very very rarely will historic buildings moved from the site of their
original context be eligible for listing on the National Register thereby
making them eligible for the tax credits. It isn't that it has never happened
but it is very very rare. 2) If the "developer" of the park is a nonprofit, how
is it going to use the tax credits? For the credits to be useful there has to
be a tax liability.
Best advice at the moment -- pick up the phone, NOW, and talk to the SHPO. You
have more than a few issues to resolve there before you start making any other
decisions.
Donovan D. Rypkema
Blue Ox Mill
Thanks for your input Donovan your insight is very valuable and these are
the questions that we are going to have to have answers for before our
meeting with the SHPO. We knew that the moving of these buildings was going
to be a stumbling point and we have a president in California to call on.
Also our argument is that we are only moving buildings that are scheduled
(and permitted) to be demolished, thus this is the only way to save them.
Second the Architect from Sacramento that is helping us with this project
has said that the tax credits are transferable. So the Non-profit, having no
tax liability itself, could use these credits to marshal grant funds from
corporate sponsors that could use the credits.
This project of ours does not hinge on the positive outcome of this status
with the SHPO which puts us in a nice position, but we hope we will prevail.
DRypkema wrote in message <20000428080441...@ng-ch1.aol.com>...