by Ron Gregory
CHARLESTON — “Why put a cap on economic growth?”
That was the editorial question raised by The (Huntington) Herald-Dispatch a few days ago relative to efforts to increase West Virginia’s tax credit for rehabilitating historic commercial buildings.
A group of Huntingtonians agree and the city’s legislative representatives appear to be siding with them. At issue during the regular session of the legislature was whether to increase the tax credit to 25 percent of costs. It is now 10 percent, which developers say puts West Virginia at an unfair disadvantage in relation to other states. Although the state senate approved the measure, the house of delegates amended the bill to allow for a statewide credit on $5 million in investments.
“Huntington has seen a great deal of historic restoration in recent years and there’s lots more to do,” said John Hankins, one of those urging the legislature to raise the percentage and remove the cap. “Charleston has numerous historic properties that could be restored as do most of the other cities in the state.”
Hankins, along with Bob Childers, Alex Vence and Jeff Barnes formed a group called Retire Huntington earlier this year. The reference, according to Hankins, is to a hope that “500 retirees would relocate to Huntington over five years.” That would happen, he says, if the group’s plans to renovate such buildings as the Prichard, Coal Exchange, West Virginia Building and The Frederick, came to fruition.
Hankins and other supporters see the issue as a “win-win” situation but that was disputed by at least one legislative leader, Kanawha County Republican Delegate Eric Nelson. Nelson, as chair of the house finance committee, “kept Senate Bill 238 tied up” in his committee, according to a fellow delegate.
“It’s true we couldn’t get it out of house finance without changes we and the senate could not live with,” said Hankins. After the state senate approved the bill, the house added the $5 million statewide cap to the amount of expenditures for which it would extend credit.
“That amount could be easily spent on one project,” said Hankins. “That was just not suitable.” The senate refused to agree to the house plan and the legislation died.
However, Senate Finance Chair Mike Hall, a Putnam County Republican, said the issue would be “resurrected” during the special budget session convening this week. “It will be part of the negotiations,” said Hall. “It will likely be a part of our (senate) budget.”
Cabell Republican house members Carol Miller and Kelli Sobonya offered support for “the concept.”
Miller said, “I’m a historian. I want to see all historic buildings renovated and saved. I just need to be reassured it is fiscally responsible.”
Sobonya said generally the same thing. “It’s a concept I certainly support,” said the delegate. “I admire all the people who are putting these plans together and I hope, financially, we can afford to do it.”
Hankins and others think there are misconceptions about the state financing issue. “A property owner does not get one dime until the project is inspected by historic renovation officials and certified as historically correct,” he said. “So the state will not be asked for a penny until the project is done and the state will have reaped the benefits of on-going economic development in a state that desperately needs it.”
Hankins cited the benefits to the state of having people employed to do the actual work, of payroll taxes and income taxes received prior to the completion of a project.
“Plus the workers will be going out to eat, buying in West Virginia stores, buying West Virginia gasoline …. It’s a plus for everyone,” he insisted.
Meanwhile, some legislators blame Nelson for “misinformation” about the credit. “I believed we were going to have to pay out money all during the building process,” said Lincoln County Democrat Delegate Jeff Eldridge. “I thought that was what we were told. It sounded like, with an economic crisis on our hands in state government, we were going to be expected to pay out money long before the project was complete. I later found out that was not true.”
The two Cabell delegates — Miller and Sobonya — expressed similar concerns regarding finances. “We may not be able to afford payments before the project is done,” Miller said.
In explaining the goal of his group, Hankins explained that historic buildings “must be renovated on the exterior to historic standards.” That’s why, he says, renovating Huntington historic structures into new residential space for seniors is possible. “We can design them inside to accommodate a growing clientele,” hHankins and others say they will be watching the legislature closely. “Bringing our credit to the same level as neighboring states will make a big difference,” he said. The federal government already provides a 20 percent tax credit for historic preservation.