State historic preservation tax credit program passes Michigan Senate and House of Representatives

Copper Country

LANSING, Mich. (WJMN) – Senate Bill 54 passed the Senate and House of Representatives and was passed on to Governor Whitmer on December 22.

The bill reinstates the Michigan historic preservation tax credit program that was repealed in 2011 with some changes. It allocates five million dollars annually to tax credits for property owners preserving historic properties. The tax credits can be used during income tax filing for up to 10 years or until the credits are used up, if it is not used in the first year it’s claimed.

Christopher Green is a resident of Calumet who used the previous tax credit program on a residential property, he is also the chairperson for Calumet’s Historic District Commission. Green says he learned about the state historic preservation tax credit through the Keweenaw National Historical Park.

“We were very intrigued with the program and got on board because they make a difference between restoration and rehabilitation and so under this program they expect you to take a contributing historic building and do a faithful restoration of the original architectural features on the exterior of the building,” said Green. “But on the interior of the building, they expect a rehabilitation and rehabilitation meaning that the building will change on the interior in order for it to be useful in today’s society.”

Green says the state program is available for residential properties, as opposed to the Federal Historic Preservation Tax Incentives Program which is only available for non-residential historic resources.

“The state program is available to residential buildings that are in a local historic district and you can get a 25% income tax credit on all approved expenses,” said Green.

The tax credit comes back to eligible taxpayers when they file their income taxes for the year. If it isn’t used in the first year after they complete their restoration, it can be used up to ten years. Green says the incentive was enough to impact whether he chose new shingles with a longer lifespan or not.

To be qualified for the tax credit program, the owner of the historic resource must submit an application and rehabilitation plan to the state historic preservation office. The property being rehabilitated must be one of the following:

  • Individually listed on the National register of historic places or on the State register of historic places.
  • A contributing resource within a historic district listed on the National register of historic places or on the State register of historic places.
  • A contributing resource within a historic district designated locally under the local historic districts act.

Leah Polzien, Executive Director of Main Street Calumet, says preserving the buildings in Calumet is important because of their role in shaping the nation during the copper boom. She says it’s also important because their historic buildings are what is attractive about Calumet.

“When those buildings go from within a block so we have say four real blocks on fifth and sixth street and where those buildings go down it really it makes it hard, the continuity from block to block seems gone and it’s harder for businesses and properties that exist in those blocks where there’s missing properties, they struggle,” said Polzien. “It’s harder to attract customers to those areas so it creates a challenge every time a building goes to continue to have life and vitality in that area.”

Polzien says the bill could help business owners in Calumet make important improvements because its another tool to leverage their money for a return on investment.

“We have a huge stock of beautiful buildings, however, improvements are very expensive and as it is across the entire u.p. you know your return on investment for making those improvements might not be that great,” said Polzien. “So sometimes its hard to justify spending 40,000 dollars on a new roof and you know putting in a new boiler and replacing storefront windows that might cost ten, fifteen thousand dollars a piece for big storefront windows so being able to leverage any dollar that a property owner has is very important to make those investments possible.”

Senator Wayne Schmidt sponsored the bill. He says by appropriating $5 million a year toward tax credits for the preservation of historic buildings economic impacts will be made.

“We have seen that the past state credits caused approximately 1.4 billion dollars in new economic activity but many times the monies weren’t set aside and the credits would go on forever,” said Schmidt. “By doing the new bill this way and it passed the house and the senate, it’s on the Governor’s desk awaiting signature that we’ve made sure we’ve set aside the money, the projects are clearly defined, the person the preservationist the owner whoever’s doing the work has to spend the money so that they’ve employed people, that they’ve bought the building materials, have done the right things for those buildings, then they get the credit.”

The bill designates amounts that will be allocated for specific types of resources. No less than two million dollars will be allocated each for both large and small non-residential historic resources and no less than one million dollars is designated for residential resources.

Certain conditions apply to the tax credit program, the full bill can be accessed online on the Michigan Legislature website.

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