Profiting from the Past: The Economic Impact of Historic Preservation in Georgia
Leithe, Joni, Tigue, Patricia, Government Finance Review
In addition to preserving an area's culture, historic preservation can be an economic powerhouse for state and local governments by creating jobs, bringing tourist dollars into a community, creating resources for investment in homes and small businesses, and revitalizing small town business districts.
One of the challenges facing state and local governments in the years ahead will be to keep their economies growing while mitigating some of the possible side effects of growth, such as urban sprawl and environmental harm. Historic preservation offers communities an alternative to sprawl and saves public dollars by avoiding the need to build the infrastructure necessary to service new developments. The role played by historic preservation programs in Georgia--promoting property investments, attracting tourist dollars, and helping reduce the need for costly infrastructure investments--makes historic preservation an indispensable economic development tool for the State of Georgia and others.
Partnership for Revitalization
Historic preservation is more than simply rehabilitating deteriorating buildings. It is a proven partner in developing local economies. Through the revitalization of deteriorating downtown areas and residential neighborhoods, historic preservation:
* spurs job creation;
* generates commerce and tourism;
* enhances property values; and
* expands the tax base.
In addition, historic preservation helps conserve scarce economic resources by promoting reuse of existing buildings and infrastructure. Urban sprawl has become a serious economic illness, draining scarce resources such as fuel and land. By creating desirable residential and commercial space in in-town areas, historic preservation encourages relocation of households and businesses to existing neighborhoods, as well as the rehabilitation and continued use of existing buildings.
Georgia has been a leader in historic preservation activities, and its accomplishments are recognized across the nation. Together with partners at the federal and local levels of government, Georgia has used scarce public dollars through a variety of programs to attract private investment in historic buildings.
Using Tax Incentives
The largest federal program designed to promote historic preservation is the Rehabilitation Investment Tax Credit. The program is administered in Georgia by the Historic Preservation Division (HPD) of the Georgia Department of Natural Resources in partnership with the National Park Service. A 20 percent tax credit is offered for certified historic rehabilitation project expenditures related to income-producing properties, such as apartment and office buildings.
In just five years (federal fiscal years 1992-1996), more than $85 million of private investment was generated in 228 properties throughout the state. This record puts Georgia in the top five states in terms of the number of projects receiving final certification for meeting the Secretary of the Interior's Standards for Rehabilitation. In 1995 and 1996, Georgia ranked number one.
The Historic Preservation Division also administers Georgia's Historic Preservation State Tax Incentive Program. Authorized by the voters through a constitutional amendment and created by the Georgia General Assembly in 1989, the program provides owners with an eight-year freeze on property tax assessments on certified historic properties that have undergone substantial rehabilitation. The state tax incentive program benefits owners of both income-producing and residential property. In state fiscal years 1992 through 1996, approximately $16 million of private monies were invested in projects qualifying only for this incentive. This figure excludes investment qualifying for both the federal and state tax credit, which is captured in the federal amount.
Together, the federal and state programs have spurred $101 million in private investment in Georgia's historic properties over five years. …