Greater Baltimore Committee president Donald C. Fry Feb. 15 urged state legislators to pass legislation that would increase total annual funding for the state’s historic commercial rehab tax credit and that would not exclude projects in any jurisdiction from access to available credits.
Fry testified before the Senate Budget and Taxation Committee in support of SB 223, an administration bill that would increase the tax credit’s available funding to $30 million and eliminate the existing 50 percent cap on the amount of available funds that can be used by projects in any one jurisdiction.
Changing the historic commercial rehab tax credit law is a high priority on the GBC’s 2006 legislative agenda.
The 50 percent cap, which was put into place by the 2004 General Assembly, effectively limited to $10 million the amount of funds available to historic revitalization projects in Baltimore City last year. Because of the limit, more than $325,000 in available tax credit funding went unused last year after all projects elsewhere in the state had received their requested tax credits and Baltimore City projects had reached their $10 million cumulative maximum. Forty-three additional projects in Baltimore City that had applied in 2005 for credits were unsuccessful in gaining them.
“Baltimore City was the only jurisdiction in the state where viable, eligible projects were denied this tax credit,” Fry said in testimony to the Budget and Taxation Committee. “The tax credit is an effective tool to promote private, commercial investment, but the consequence of the manner in which the law is written is that, in effect, it singles out one jurisdiction where investment is stifled.”
Fry noted that a “true measure” of the program is “its ability to return unused and abandoned properties to the tax rolls of the state and its local jurisdictions.” For instance, prior to Tide Point’s redevelopment in South Baltimore through use of the tax credit, the city collected approximately $75,000 per year in property taxes for the site. The redeveloped site will yield $1.3 million per year in property taxes after 10 years, when the historic rehab tax credits will have been completely used, said Fry.
There are “literally dozens” of similar projects in the Baltimore region, including a number of buildings and properties being revitalized on Baltimore’s west side, said Fry. “The value of commercial investment in these areas cannot be underestimated.”