Capitol Hill is the unofficial birthplace of Denver's preservation movement. Following the 1970s demolition of the Moffat Mansion (at 8th and Grant) Historic Denver, Inc. was created by concerned citizens in time to save another of our city's precious historic homes, that of the "unsinkable" Margaret Brown.
Colorado Job Creation & Main Street Revitalization Program
On Wednesday, May 14, 2014 Governor John Hickenlooper signed HB-1311, the Colorado Job Creation & Main Street Revitalization Act at a meeting of economic development organizations in Pueblo. Historic Denver advocated for this legislation along with our preservation partners, History Colorado, Colorado Preservation, Inc., the National Trust for Historic Preservation and Downtown Colorado, Inc.
Details on the new COMMERCIAL credit can be found here.
Details on the new RESIDENTIAL credit can be found here.
Co-sponsored in the House by Representatives Leroy Garcia and Tim Dore and in the Senate by Senators Pat Steadman and Larry Crowder, the bill improves Colorado’s existing state tax credit by increasing the project cap from $50,000 to $1 million for commercial projects and by making the commercial credits transferable. Fewer changes were made to the way the tax credit applies to single-family homes, although it can now be “re-used” more than once per property, which makes long-term stewardship more viable. To be eligible to use the credits, a building must be locally designated or listed on either the State Register or National Register of Historic Places.
Highlights of HB-1311
Commercial projects under $2 million will be eligible for a 25% state tax credit
Commercial projects over $2 million will be eligible for a 20% state tax credit
Properties in state and/or federal disaster areas will qualify for an additional state tax credit of 5%
Tax credit is transferable, capped at $1 million per project
Single-family homes can continue to participate and earn up to $50,000 in credits
These changes make the new legislation significantly more robust and accessible than the pre-existing credit, and will be particularly significant for mid-size and smaller buildings found in historic, centralized commercial downtowns or neighborhood business districts. Funding will kick in beginning in fiscal year 2015 and deliver $35 million in tax credits over a four-year period. State agencies have already begun the process of developing the specific processes and rules needed to implement the legislation so that projects can begin to apply mid-2015.
Historic Denver hopes this legislation will spur increased preservation and rehabilitation of buildings in our smaller scale business districts, from Colfax Avenue to the Welton Street corridor, Brighton Boulevard to Old South Gaylord, while continuing to support rehabilitation work in our 52 historic districts.
Beyond the preservation stakeholders additional support for the bill came from Commerce Bank and a coalition of partners, including Colorado Municipal League; Colorado Counties, Inc.; Colorado Competitive Council (C3); Pueblo Chamber of Commerce; Action 22; Progressive 15; Colorado Realtors Association; Urban Renewal Authority; Historic Pueblo, Inc.; Downtown Denver Partnership; American Institute of Architects-CO; Independent Bankers of Colorado; and the Alliance for Sustainable Colorado.
Colorado State Rehabilitation Tax Credit
While the Colorado Job Creation and Main Street Revitalization Act was passed in mid-2014, the existing State tax credit also remains in place for the time-being. The State tax credit covers 20% of qualified rehabilitation expenses, up to a maximum $50,000 credit, for properties listed on the National Register of Historic Places, the Colorado State Register, or designated by a Certified Local Government, such as Denver. An attached provision suspends the tax credit in years in which the state’s economy does not grow at least 6%, however, the suspended tax credit can be taken (in full) in subsequent years where the state’s economy does exceed 6%. In order to qualify for the tax credit your property must meet specific guidelines. To learn more about the program as administered through the City of Denver and to determine if your property qualifies, visit the Denver Landmark Preservation Commission’s webpage here.
The state tax credit is one of the few incentives available to private, residential property owners. You can use the credit to off-set costs associated with a new roof, better insulation, masonry or foundation work, necessary interior renovations and more. The credit is also available for commercial properties.
Be sure to wait until your preliminary application is approved before you begin rehabilitation work!
Federal Historic Preservation Income Tax Credit
For income-producing properties, such as commercial or rental residential buildings, the Federal Historic Preservation Income Tax Credit is another option to recoup up to 20% of qualifying rehabilitation expenses. Eligible properties must be on the National Register of Historic Places and the rehabilitation project must be approved by the Colorado State Historic Preservation Office and certified by the National Park Service. To learn more about the Federal tax credit, visit the NPS’ website here.
Credit for Buildings Built before 1936
A 10% federal tax credit is available for the rehabilitation of non-historic buildings placed in service before 1936. The building must be rehabilitated for non-residential use. In order to qualify for the tax credit, the rehabilitation must meet three criteria: at least 50% of the existing external walls must remain in place as external walls, at least 75% of the existing external walls must remain in place as either external or internal walls, and at least 75% of the internal structural framework must remain in place. There is no formal review process for rehabilitation of non-historic buildings. Learn more about this credit on the NPS website here.
View a complete brochure on federal tax incentives for preservation here.