WHAT’S OLD IS NEW AGAIN
How historic tax credits contribute to revitalization and growth. BY RACHEL PATTON
BRIAN CHILSON
The Waters Hotel, Hot Springs
H
istoric tax credits are an important tool for the revitalization of downtowns and neighborhoods throughout Arkansas. Since 1976 the Federal Historic Tax Credit program provided a 20% federal tax credit to people who undertake the substantial rehabilitation of a certified historic building for income-producing use. The federal historic tax credit was nearly eliminated during tax reform in 2017. But thanks to coordinated advocacy efforts the tax credit is still in place, with a provision that the 20% credit be taken over a five-year period. Arkansas is one of 39 states with a state historic tax credit program that can be used in conjunction with the Federal Historic Tax Credit. The Arkansas Historic Rehabilitation Tax Credit is a 25% credit on the costs of rehabilitating a certified historic building within designated per-project caps — a maximum of $400,000 in credits for an income-producing property and a maximum of $25,000 in credits on an owner-occupied building. On April 22, Governor 10 | BLOCK, STREET & BUILDING VOLUME 7 | 2021
Hutchinson signed Act 840 into law. This legislation improved the state historic tax credit by increasing the annual statewide cap from $4 million to $8 million per fiscal year, extending the program sunset to 2037 and supporting the personnel who administer the program. The expansion of the annual cap represents years of advocacy efforts and the first increase since the state historic tax credit program was created in 2009. Historic tax credits are often a critical piece of project financing, making the availability of more credits per year essential to keep projects moving. One or two successful historic rehabilitation projects can spur the revitalization of an entire downtown or neighborhood. Located at 340 Central Ave. in downtown Hot Springs, the 1913 Thompson Building was designed by architect George R. Mann to house a pharmacy and physicians’ offices. As the years went by, the first floor stayed in use as retail while the upper floors sat vacant and deteriorated. The building was included on Preserve Arkansas’s Most Endangered Places list in 2014, along with all of downtown
