A Fresh Look: Interior Secretary Calls for Review of Historic Tax Credit Program

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U.S. Department of Interior Secretary Ken Salazar has asked the National Park Service to conduct an internal review of the 20% federal historic rehabilitation tax credit program and report its findings to him by March 1, a step that has sparked positive reactions from some program participants.

According to a National Park Service news release, Salazar has asked the Park Service to review the “highly successful” historic preservation tax incentives program “to ensure that it is maximizing opportunities to use historic preservation to promote economic development and revitalization of communities, especially in urban areas.”

Salazar made the request in conjunction with a “stakeholder meeting” he convened in Detroit on January 25 that was attended by U.S. Sen. Carl Levin (D-Mich.), HUD Assistant Secretary for Housing/Federal Housing Commissioner Carol Galante, NPS officials, real estate developers, and others. Salazar invited attendees to send him comment letters for the program review.

“Preserving and restoring historic buildings has the potential to breathe life into local communities and their economies,” Salazar said. “The Federal Historic Preservation Tax Incentives Program is the largest and most effective federal program specifically supporting historic preservation, and we want to make sure that we are doing everything we can to work in partnership with local communities, developers, and other stakeholders to provide guidance and promote restoration efforts.”

The program, administered by the National Park Service and Internal Revenue Service in partnership with State Historic Preservation Offices, provides a 20% tax credit to developers for the substantial rehabilitation of certified historic structures.

The news release said National Park Service officials have been asked “to examine the program with a review to strengthen partnerships with local communities and State Historic Preservation Offices. The review will also look at ways the National Park Service can better promote the program to broad the public’s understanding of its benefits and eligibility requirements.”

Several historic tax credit program participants welcomed the review of the historic tax credit program.

“It’s a positive development and the Park Service is anxious to get responses from the industry,” said John Leith-Tetrault, President & CEO of the National Trust Community Investment Corporation, the tax credit syndication arm of the National Trust for Historic Preservation, and Chairman of the Historic Tax Credit Coalition. He expected the Coalition to submit a comment letter to the Park Service shortly.

Washington, D.C. attorney Jerry Breed, a partner at Bryan Cave LLP, said, “Is it a good sign? Sure? Is it an opportunity? Yes, absolutely.”

The Interior Department declined to provide further details about the review or say what will happen after the report is completed. Salazar is resigning as Interior Secretary by the end of March. Sally Jewell, CEO of an outdoor gear company, has been nominated as the next Secretary of the Interior but had not been confirmed as of mid-February.