Preservation promotes prosperity in communities across Iowa, according to a recently released economic impact study commissioned by Smart Growth Development, an Iowa bi-partisan non-profit coalition which advocates for policies promoting smart growth practices and historic rehabilitation.
Heritage Works, a Dubuque-based nonprofit organization, specializing as a comprehensive resource for those engaged in preservation and redevelopment projects, provided critical assistance in data collection for the study. The Historic Tax Credit Economic Impact Study for the State of Iowa was conducted by Baker Tilly, an advisory and accounting firm located in Madison, Wis.
The economic impact study conducted in Iowa reveals critical data demonstrating a significant return on investment for Iowa communities.
Since 2002, the Iowa State Historic Preservation and Cultural and Entertainment District Tax Credit Program has provided a fully refundable and transferable tax benefit for up to 25 percent of the qualified rehabilitation expenses for the sensitive rehabilitation of historic buildings. The program ensures that character-defining historic features and spaces of buildings are retained — saving iconic structures and creating innovative spaces. The program revitalizes Iowa’s main streets and rural communities by growing jobs, thus increasing the need for residential and retail growth to support those jobs. Job growth creates economic vibrancy across the state.
Baker Tilly analyzed Iowa’s State Historic Tax Credit program impacts on employment, economic output, taxes, and assessed property values by examining Iowa State Historic Tax Credit Projects between 2011 and 2013. The 117 Iowa projects analyzed during that period yielded more than $8.2 million in state and local construction taxes, more than $18.4 million annually in direct state and local taxes from operations, and they are estimated to have created more than $86.8 million in new assessed property value, or an increase of 284 percent.
Additionally, more than 10,700 jobs are estimated to have been created through construction and operations, and more than $559 million in economic output is estimated to have been created from project construction periods and the first year of annual operations. Based on direct economic impacts alone, the State of Iowa’s return on investment in the Historic Tax Credit Program is 5:1 by year 3, almost 20:1 by year 10 and 32:1 by year 15.
“This study demonstrates to lawmakers, community leaders, and tax payers that the historic tax credit is not a government handout, but an economic driver, especially for rural areas and main streets in our state,” said John Gronen, of Gronen Development. “It is a powerful tool vital to the State of Iowa. More leaders from across the country are finding that a younger, qualified workforce wants to reconnect to its heritage and live in communities with a sense of place.”
Smart Growth Development has been leading Iowa on recent national advocacy efforts to preserve the Federal Historic Tax Credit as Congress is conducting tax reform.