McKinley, R-W.Va., said these credits incentivize private development, and they advocate for the restoration of dormant downtown districts.
He cited several local properties revived because of tax credits, and said these buildings now contribute to the revitalization of Wheeling.
“How a community treats its downtown is a manifestation of how it thinks about economic development,” McKinley said. “It hurts me every time I see another building come down because I know they could be restored.”
McKinley’s talk was the second installment in the West Virginia Division of Culture and History’s Betty Woods “Snookie” Nutting Lecture Series at West Virginia Independence Hall. The subject of historic rehabilitation credits is timely because surrounding states such as Ohio and Pennsylvania offer 25-percent credits, compared to 10 percent in West Virginia.
Some, such as Jake Dougherty of Wheeling Heritage and members of Wheeling City Council, believe a higher rate would change the rehabilitation game in Wheeling, enabling developers to take a fair shot at many of the city’s vacant structures.
Historic tax credits are available through West Virginia’s State Historic Preservation Office and the National Park Service. They may be applied to a developer’s annual income tax only after a restoration project is complete, either in the year of the project’s completion or a year prior. According to SHPO, they are a dollar-for-dollar reduction in income tax liability, meaning a tax credit of $1 reduces the amount of income tax owed by $1.
Properties either individually listed with the National Register of Historic Places, located within a national historic district or previously owned by someone of historic relevance may receive these credits.
McKinley said West Virginia’s current credit was once competitive, but has not been adjusted to meet modern demand. He recalled a movement in the mid-1990s to do away with West Virginia’s credit, although he said this idea was thwarted.
The federal credit — presently 20 percent — was once 25 percent, according to McKinley, until it was cut under the administration of President Ronald Reagan.
McKinley pointed to Winston-Salem, N.C. as an example of a city that used state and federal historic credits to push away from its past as a cigarette king to harness hubs of technological innovation. Locally, he cited the ongoing restoration of the Fort Henry Club, the Wagner Building and the Wheeling Stamping Co. building, where Orrick, Herrington and Sutcliffe resides, as models of what else Wheeling could see through similar development.
To accomplish both a state and federal hike, McKinley said he’ll address whoever wins the race for West Virginia’s governor, as well as leaders in the state Legislature, to win their support. He said with these individuals on board, it’s likely something could be done.
In Congress, McKinley said he will collaborate with Rep. Paul Tonko of New York to introduce legislation returning the federal credit to 25 percent, as well as establish a historic tax credit for residential properties.
Wheeling Mayor Glenn Elliott, who attended the lecture, asked McKinley whether a provision could be made for the state credit, so developers of condominiums could better take advantage of it. He said since a developer must own property for a certain amount of time to reap the benefits — at least five years — developers of condos typically miss out since they sell off the property.
McKinley said it would be a good provision, and said he’ll keep it in mind.