News

Lawmakers want to promote renovation of vacant or abandoned buildings

February 19, 2012

Two state lawmakers are proposing legislation to provide incentives for major renovations on long-standing vacant and abandoned buildings.

Spartanburg city officials say if the plan is approved, it could have a major economic impact and provide local redevelopment opportunities for a number of properties. The bill is modeled after the S.C. Textile Communities Revitalization Act passed in 2004.

Rep. James Smith (D-Richland) and Sen. Creighton Coleman (D-Fairfield) will introduce the measure Tuesday to provide a 25 percent tax credit to owners of buildings that have been vacant for at least five years provided the new investment is at least $500,000.

The tax credit — spread during a five-year period beginning in the final year of construction — is applied against real property taxes or income taxes. For example, a $500,000 project would have a tax credit of $125,000, and the owner would realize a $25,000 annual credit for five years.

“The reuse of older structures is more complex and much more challenging from the city's perspective, but it's terribly important when you have under-utilized or vacant buildings,” said Spartanburg Assistant City Manager Chris Story.

Story also said existing buildings already have infrastructure — such as roads, water and sewer lines — so it's good public policy to incentivize private investment for significant rehabilitation projects.

“(The legislation) is great for us in our situation with the challenges we face within the city, but there are literally hundreds if not thousands of buildings through the Upstate that would qualify,” he said.

A similar bill, which would have provided tax credits for abandoned government buildings, narrowly failed last year on the third reading. Smith said he wanted to expand the tax credits this year for all abandoned buildings that had been vacant for a period of time provided the owner had committed a sizeable investment.

“We wanted to target projects that would not otherwise make sense economically,” he said. “It spins off jobs and opportunities and adds value and tax revenue.”

Smith said the textile revitalization bill, which was approved in 2004, has provided tax credits for those who reinvest in textile mills. That measure, he said, has been extremely popular and tipped significant investment in old mills.

Sen. Lee Bright (R-Spartanburg) said he would support the bill in its current form, but he worries that after it comes out of committees and sub-committees, it could have unrelated amendments tacked on.

“I always support tax relief,” Bright said. “I wish it was a reform on the entire tax system, but it's a start.”

Bright said the bill is a Band Aid fix to serious problems with the state's tax code, but he will watch it closely as the legislative session continues.

“I've seen bills that I've ardently supported and by the time it gets to a vote, it's a totally different bill,” he said. “I don't want this to turn into a special interest bill and I will watch it carefully. Just on the outset, it sounds like a great idea.”

Ben Hines, president of Spencer/Hines Properties, specializes in commercial real estate and said he welcomes any state incentive to attract positive development.

The bill currently states that the “taxpayer” would qualify for the tax credit, but Hines said he hopes legislators will consider expanding it to developers, leaseholders or anyone who makes the specified investment in a building.

“From our standpoint, we support anything the state can do to help attract potential investors,” Hines said. “It sounds great, from what I've heard, and I hope it moves quickly.”

Spartanburg architect Donnie Love, who serves on the board of directors for the Palmetto Trust for Historic Preservation, also supports the legislation.

“We have so many buildings that are vacant that have been sitting around for a lot of different reasons,” Love said. “We think this is positive for the city and county because it brings tenants back.”

Love said he thinks the bill, in its current form, will attract renovation of vacant “big box” stores and empty shopping centers as well as older buildings downtown.

“The only drawback I see is that the threshold is so high — it has to be a pretty big project to trigger the tax credit,” he said. “We have a lot of little buildings that could use a tenant, too. If the threshold was a little lower, it could encourage some investment.”

Carter Smith, executive director of the Economic Futures Group, said manufacturing companies often need more modern buildings, but tax credits could persuade some companies to give existing buildings serious consideration.

“If there's an opportunity to encourage companies to recycle or revitalize existing buildings for a productive use, that's a key ingredient to the economic success to this community,” Smith said.

Originally posted in the Spartanburg Herald/GoUpstate.com
By Lynne P. Shackleford

Website by TheRackesGroup. Powered by CoD Donor Database.