OUR VIEW: Rehab tax an option to the EID
Criticism of La Grande Main Street was obvious in 2013 as downtown property owners objected to implementing an Economic Improvement District. The assessment was intended to bring stable funding to the Main Street program, the nonprofit organization dedicated to reviving the downtown area.
Since the EID was voted down by remonstrance, LGMS officials have wondered how the organization can stay afloat. According to a recent study released by Restore Oregon, La Grande isn’t the only one.
Restore Oregon’s report on “Revitalizing Main Street” says 34 states across the country are considering a State Rehabilitation Tax Credit to be used to “re-activate historic downtown as centers of business incubation, housing, shopping, and heritage tourism.”
“It’s time Oregon did the same,” according to Restore Oregon Executive Director Peggy Moretti. “Preserva-tion and reuse has been a state priority since the 1960s, but our current financial toolkit is incomplete, leaving millions of dollars on the table, hundreds of rehab pro-jects undone and thousands of workers unhired. In many cases, a state rehabilita-tion tax credit would make the difference and bring historic buildings back to life.”
The organization notes that many of Oregon’s traditional downtowns are at a tipping point, including La Grande’s. For decades, big box stores, strip malls and sprawl have drawn customers away, leaving build-ings in a downward spiral of disinvest-ment and demolition-by-neglect. Today, historic buildings are being rediscovered as hip and authentic places to live and work. But the cost of restoration, code up-grades and seismic reinforcement often creates a “devel-opment gap,” placing rehabilitation out of reach, especially for small-town property owners.
La Grande Main Street officials have been working hard to bring a beer festival to the area, but perhaps some sort of tax credit would be a more stable funding source, a state income tax credit provided based on a percentage of rehabilitation costs — usually between 20 and 25 percent. This has been proven to stimulate private investment and can be taken direct-ly by the property owner or transferred to a finan-cial partner who provides funds for the rehabili-tation work, according to the report. As proposed by Restore Oregon, approximately 2,600 historic commercial buildings in at least 75 communities statewide could benefit, including retail stores, apartment buildings, warehouses, office buildings and barns. The vast majority are in traditional downtowns.
There are no easy solutions in reviving historic downtowns, but there are ideas worth discussing. Perhaps a rehabilitation tax credit is one that should be on the minds of state — and local —