LIZ SWAINE EXECUTIVE DIRECTOR DOWNTOWN DEVELOPMENT AUTHORITY DOWNTOWN SHREVEPORT DEVELOPMENT CORPORATION
Everyone has a favorite tool. My father favored a butter knife, the heel of a handy shoe and some salty language when his homemade fix inevitably did not work.
The tool of choice for downtown Shreveport is something called Historic Tax Credits, or HTCs. I have long called this the most important tool in our toolbelt because without it, a number of historic buildings downtown that have been rehabbed or are in the process of being brought back to life, would not be.
Downtown Shreveport has an inventory of old buildings that tell the stories of days past. These are beautiful spaces that in many cases could not be replicated today because the materials used to build them are simply not available. These are buildings that can become vibrant, exciting spaces and create opportunities and jobs and foot traffic.
We have seen this happen multiple times with buildings like the old Sears Department Store that became a mixed use development for apartments, businesses and a popular Rhino Coffee shop in a former vacant furniture store that became Artspace and the Parish Taceaux restaurant, and at a two-story building that was losing its roof before it was converted to Robinson Film Center and Abby Singer’s Bistro. When old buildings are saved, so much is possible.
Almost every year, people around the state rally to fight for the continuation of Louisiana HTCs, and this year was no different. There was overwhelming support in the justconcluded special session, where lawmakers understood the long-term gain to local municipalities and to the state from the projects HTCs enable.
We are currently advocating at the federal level for an expansion of Federal Historic Tax Credits. We are asking people to send emails of support to Senators John Kennedy and Bill Cassidy asking that they temporarily expand Federal Historic Tax Credits to help jumpstart the economy so damaged by COVID-19. The ventures that these tax credits help are important to our community as a whole.
They are projects such as the Andress Artist and Entrepreneur Center at 717 Crockett St. Local businessman Jim Malsch believed that the building, vacant for more than 30 years, would be a perfect location for office and artist/entrepreneur space and a retail store, but Shreveport is not Baton Rouge; we are not New Orleans.
Returns on real estate investments in Shreveport take longer, much longer than in other cities. When you factor in the lower rental per square foot in Shreveport and the fact that construction costs here are just as much as elsewhere, you can see the challenge, but the challenge doesn’t end there. Factor in extra expenses you are bound to encounter when rehabbing a historic building and the fact that working capital may be tougher to come by, and it adds up to risk.
Malsch understands risk and has been willing to take smart chances as an investor in multiple Shreveport businesses. He wants to be a part of downtown’s resurgence and has fallen in love with a remarkable old building that needs a lot of love. But even with all that going for him, the dollars and cents of the project were not making common sense.
“Had the tax credit portion not been there,” he told me, “I couldn’t have charged enough per square foot (for rental) to pay the cost of the $2.5m rehab and $400,000 soft costs.” The tax credits also helped attract investors and a partner bank. “The building would not have been feasible without the credit,” says Malsch.
The way the credits work is remarkably smart for the state. Property developers get zero credit until the project is completed to rigorous specifications set by the state and federal government.
Unlike other tax credits in which businesses can take their investment and leave Louisiana, the rehabbed historic buildings aren’t going anywhere. They continue creating opportunities for the community for years to come.
There is also a “catalytic” effect created by a rehabbed building. For example, in the 600- 700 blocks of Texas Street downtown, seven buildings have used some form of Historic Tax Credit, but 17 buildings have been renovated during the same time, specifically because of all the interest generated.
The fight to continue Historic Tax Credits is one that we should all be interested in supporting. It helps our downtowns, it gives our important historic properties a new lease on life and it means jobs, opportunities and a stronger tax base for us all.
Please consider emailing Senators Bill Cassidy and John Kennedy and asking them to support upcoming HR2 and specifically, the HTC-GO enhancements.
THIS ARTICLE WAS PUBLISHED IN THE July 10 ISSUE OF FOCUS SB - THE INQUISITOR.