PAWTUCKET - Rhode Island's tax credit legislation is effectively redeveloping its historic buildings, increasing employment and generating subsidized housing in urban, suburban and rural areas, according to a study released Monday at the Hope Artiste Village in Pawtucket.
The study was released by Grow Smart Rhode Island, a public interest group that believes in "smart economic development by preserving buildings that were either vacant or underutilized," said Scott Wolf, executive director of the group, in public remarks at the study's release.
The group hired Lipman Frizzell & Mitchell LLC, a Maryland-based real estate consulting firm, to analyze the benefits of the Rhode Island Historic Preservation Investment Tax Credit program, which the state inagurated in January 2002.
The study states that the program has created over 17,000 construction jobs in the state, while permanent employment at renovated locations is anticipated to be over 7,200. The completed projects have produced 426 subsidized housing units for low-income families.
Every dollar of state tax credit spent, the report says, yields a total economic output - including wages and taxes - of $5.35.
Tax credits are calculated on the qualified rehabilitation expenditure - the cost of preserving the historic aspects, like windows, of old buildings - and not on other costs like purchasing costs, said Joseph Cronyn, partner at Lipman Frizzell & Mitchell and author of the study.
To qualify for the credit, a property's developer works with the Rhode Island Historical Preservation & Heritage Commission to determine which costs qualify as historical renovations. Once the renovations are complete, the state awards 30 percent of these costs to the developer as a tax credit.
Pawtucket Mayor James Doyle said at the event Monday that "when the state invests in cities and town, everyone wins."
Since the program's start in January 2002, a total of about $460 million has been spent on 150 completed and 127 ongoing projects.
The study also noted that during the first five years of the program, there was more investment in historical rehabilitation in the state than in the previous 25 years combined.
Lance Robbins, a Los Angeles-based real estate developer, said he was "brought to Rhode Island only by the tax credit program" two and a half years ago.
"When making hard economic decisions you've got to look at the risk-return ratio," he said, noting that the risk of investing in a rehabilitation project is very high.
The program also contributes to the environmental clean-up of dozens of contaminated sites or "brownfields," Wolf said. These abandoned sites, which previously held industrial or commerical uses, now contain low levels of hazardous waste or pollution. Tax credits provide developers with an incentive to clean up these sites.
One of Robbins' ongoing projects is to redevelop over 650,000 square feet of mill space at the Hope Artiste Village into a complex with live music, retail shops, restaurants and offices. The village already has over 20 community businesses and will soon begin renting office spaces.
"This place now breathes. When I walked in here it didn't," Robbins said.
He noted that an important feature of the complex is its location - just two miles from Brown and RISD.
"I think I've found a gold mine," he said.
Tenants at the village said they were happy that the tax credit program helps save old buildings across the state.
Kevin Bledsoe, owner of the Hive Gallery and Tattoo Studio at the village, said the building attracted him because of its typical New England feel.
"It's a great idea not to change its structure and keep the look," he said.
Gerra Harrigan, who owns a New Harvest Coffee wholesale shop next to the Hive, said she chose the village for her shop because the old skylights "give amazing light."
