RACINE — A proposed state tax credit could mean “tens of millions of dollars” in economic development for Racine, according to local legislators.
If passed, the Historic Tax Credit “has the potential bring a large project to Racine,” according to Speaker of the Assembly Robin Vos, R-Rochester.
“I don’t know, but I think tens of millions of dollars in economic development,” said Vos, saying he was first approached about the project several weeks ago by Racine County Executive Jim Ladwig.
Ladwig recently visited Madison to testify in support of the bill, which doubles a state tax credit used to redevelop historic buildings.
The Legislature already increased the credit once this year, increasing it from 5 percent to 10 percent of
qualified rehabilitation expenses. The latest measure, which passed the Assembly Thursday, doubles the credit to 20 percent, supplementing an existing federal tax credit for historic building redevelopment.
Elected leaders across party lines in the City of Racine, Racine County and state government have reportedly been pushing hard for the credit increase, hoping it will pave the way for the unnamed potential redevelopment and the economic implications it entails.
“If this bill becomes law, I think you could see some projects move forward that are larger than other projects we’ve seen in the city for more than a decade,” said state Rep. Cory Mason, D-Racine, who echoed Vos’ estimate on economic impact.
Ladwig confirmed, “There have been developers that have spoken in favor of the tax credits and have expressed an interest in potentially doing something in the county,” although that opportunity is contingent on developers and property sellers reaching a deal.
The credit could potentially impact redevelopment efforts around the state, but will especially serve cities with older, more historical buildings, such as Racine and Burlington, Vos said.
In Racine County, there are 1,436 nonresidential buildings listed on the national register that could take advantage of the tax credit, according to Jen Davel, a preservation architect with the Wisconsin Historical Society.
On that list, which Davel noted is not all-inclusive, 69 qualifying buildings are located in the City of Racine.
Area leaders’ full-court press cuts across party lines, and includes Racine Mayor John Dickert, Ladwig, Vos and Caledonia Republican Rep. Thomas Weatherston, Mason said.
“I wish we did this more often,” he commented, “have us all putting the interest of the community first.”
The nonpartisan Legislative Fiscal Bureau estimates the credit will cost the state $8.6 million over the next two years, but Vos and Mason both said that based on surrounding states’ results with similar credits, the resulting economic development will recoup those costs and more.
The state Senate is scheduled to take up the tax credit this November. Racine Democratic Sen. John Lehman is signed on as a bill co-sponsor in that house.
If passed by the Senate and signed into law by the governor this year, the tax credit would take effect in 2014.
THE HISTORIC TAX CREDIT
Under current law, a person can claim an income and franchise state tax credit for 5 percent of certain cost for rehabilitating certified historic structures. The credit supplements an existing 20 percent federal tax credit.
Under the bill passed Thursday in the state Assembly, the state credit increases to 20 percent. The bill also directs the state Department of Revenue and Wisconsin Historical Society to submit a report to the Joint Committee on Finance no later than June 30, 2018, describing the economic impact of the tax credits and making a recommendation as to whether the tax credits should continue.