Government & Politics

Measure would jump-start stalled historic projects

TOPEKA — Historic tax credits have helped restore empty Main streets and put vacant buildings back on the tax rolls, but they've been jeopardized by what was intended to be a minor cut, the program's supporters told lawmakers Thursday.

"It creates jobs that cannot be outsourced and preserves buildings that cannot be replaced," said Christy Davis of Davis Preservation, which works on projects across the state.

Late in the 2009 session, lawmakers passed a 10 percent cut to tax credit programs in the state. The move has halted or delayed restoration projects because developers are no longer sure they will have access to needed funds, they told the Senate Assessment and Taxation Committee.

Senate Bill 378 would remove the cap for fiscal year 2011, which starts July 1. The program is currently capped at $3.75 million. The cut last year reduced the amount of credits available for the entire program.

Since the program started in 2002, the average annual cost to the state has been about $5.8 million, said Jennie Chinn, executive director of the Kansas State Historical Society, which administers the program.

Because the cuts affected programs already in progress, it actually created more work and confusion for the society, she said. There are applications for fewer projects but it takes more time.

The program had allowed a private developer to tap into tax credits for up to 25 percent of the project's worth. Developers cannot use the tax credits until the restoration project is completed and approved, but they can leverage the potential credits to access money for construction.

Since 2002, the $66.4 million in state historic tax credits have brought in $264 million in private money, Davis said.

Restoring the program is one of Wichita's top legislative goals this year.

"This is a statewide program, it has benefits far beyond south-central Kansas and Wichita," city lobbyist Dale Goter told the committee.

Capping the tax credit program put the restoration of the Broadview Hotel in Wichita on hold, Goter said. The restored hotel would double its assessed value, helping both city and state coffers, he said.

As Wichita is working on developing a downtown plan, its historic buildings were part of that plan, said Jeff Fluhr, president of the Wichita Downtown Development Corp.

The city had a great supply of partially or unused historic buildings that could be redeveloped into residential projects, he said.

"But the market demand may remain untapped," he said.

A similar bill has been introduced in the House by Rep. Arlen Siegfreid, R-Olathe.

Senators on the committee Thursday seemed generally supportive of the proposal. Many noted the projects returned more money to the state than was spent.

"All of these projects are returning a lot more revenue to the state," said Committee Chairman Sen. Les Donovan, R-Wichita.