For the fourth fiscal year in a row, the use of historic tax credits stayed nearly flat in Missouri.
State officials authorized $93.9 million worth of the credits in the 12 months ending June 30. That’s down a bit from the $98.6 million in the same period last year, and the fourth straight year that fewer than $100 million were approved.
The credits, which reimburse one-fourth the cost of rehabilitating historic buildings, have been a boon to redevelopment in St. Louis during the last decade, helping fund conversions of downtown buildings and renovations in neighborhoods across south St. Louis. They’ve also sparked fierce debate in Jefferson City among their supporters and budget hawks who say the program has grown too big and needs to be reined in.
In the last few legislative sessions, those debates have centered around capping the program in the neighborhood of $90 million annually (it’s limited to $140 million now). Historic credit supporters have succeeded in fending off those cuts. But in practice, that’s the ballpark the program has been in lately anyway. Remove smaller projects that are exempt from the cap, and the state authorized $85.4 million in credits last year — less than the cap in the bill that died on the last day of the General Assembly in May.
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As usual, much of the money flowed to St. Louis.
Of the $93.9 million in authorizations, $65.5 million went to projects in the city, including the three largest rehabs and seven of the top 10. Those include $14.9 million to turn an old telephone factory on Duncan Avenue into lab space, $9.3 million for rehabs to Union Station and $7.4 million for the Chemical Building on Olive Street. Out of 164 projects statewide, 120 were in St. Louis, 20 in Jackson County, four in St. Louis County and the rest sprinkled in ones, twos and threes across the rest of Missouri.
These figures are just authorizations — if the work is not completed, the credits will not be awarded. But authorization is a crucial first step. Typically developers use the authorization to get financing, complete the project and then receive and cash in credits a few years later.
That process also means the cost to the state for historic properties likely is trending down. Authorizations regularly ran north of $125 million in the mid-2000s and peaked at $212 million in 2009. Those credits have been cashed in over the last few years as big projects have been completed. Now there should be fewer outstanding, though figures on redemptions in fiscal 2013 were not immediately available.
