Our View: Bring back state historic tax credit program

Minnesota missing out on $1 million a day in economic activity

Former St. Louis County jail
The old St. Louis County jail was renovated for housing, a project made possible by Minnesota's state historic tax credit program. [2004 file / News Tribune]

In just a little over a decade, Minnesota's state historic tax credit program helped save more than 170 historically significant buildings statewide, including at least 10 in Duluth. It also helped account for 29,000 jobs and helped pump more than $6 billion into Minnesota's economy.

In spite of so much success and so much good accomplished, last year's do-little Legislature dropped the ball and failed to renew and continue the program. Legislative inaction allowed it to expire last June.

"Shockingly unacceptable," a News Tribune editorial scolded.

Just as unacceptable is that this legislative session, the Minnesota House tax bill doesn’t include the relaunch of the historic tax credit program. While the governor’s budget proposal did and the state Senate tax bill does, the program is in danger of continuing to be an opportunity missed if a conference committee fails to include it in the final tax bill sent to the governor before the end of session on May 22. Conference committees were expected to be appointed this week, including one to hammer out the differences between the House and Senate tax bills.

“It is absolutely critical that we renew the historic tax credit to ensure Duluth, and every community around the state, can benefit from revitalizing historic buildings, creating jobs, and spurring growth,” Heidi Swank, executive director of Rethos, a St. Paul-based historic-preservation nonprofit and founding organization of the RevitalizeMN coalition, said in an exclusive statement to the News Tribune Opinion page this week. “The historic tax credit is one of the most effective economic-development tools Minnesota has ever had. Without it, we are losing more than $1 million a day as a state.”


You read that right: A million bucks a day, just being sacrificed, that number crunched from the $6 billion in economic activity as a result of the program in just 12 years.

State historic tax credits have more than proven their worth, returning nearly $10 for every $1 invested by the state. Minnesotans eager for the program's roaring engine of economic development and historic preservation can be screaming to lawmakers these three final weeks of session to bring it back.

A provision in the Senate bill to make the program permanent deserves swift passage along with the renewal. So this hugely successful program won’t be jeopardized by politics or for any other reason ever again.

Minnesota's historic tax credit was created in 2010 during the "Great Recession" to help put people to work while also saving important and historically significant structures, those places that preserve our past and tell our communities' stories. State and federal historic tax credits can cover up to 20% each of a project's costs, making many projects feasible.

In Duluth, efforts to rehabilitate the historic Armory on London Road, where a young Bob Dylan found inspiration at a Buddy Holly concert, hinge on the renewal of the tax credit program. The renovation of Historic Old Central High School is using the credits. Other Duluth projects that have benefited from or were made possible by state historic tax credits include the Oliver Traphagen residence, Greysolon Plaza, the old YWCA building, Duluth's old City Hall on East Superior Street, Munger Terrace, the Carnegie Library on West Second Street, and the NorShor Theatre.

The renovation in Duluth of the historic St. Louis County Jail into apartments wouldn't have been possible without the program. State and federal tax credits accounted for about a third of the approximately $8.5 million spent on the renovation, according to developer Jon Commers.

"There really is no question that the state historic tax credit was fundamentally essential to moving that project forward. Without that, we just would not have been able to assemble the capital," Commers said in a News Tribune editorial in February. "It is emblematic of a whole bunch of structures across the state. There are community benefits and environmental benefits. There are economic benefits associated with reusing these structures. But the dollars involved in bringing them back online does often exceed what a typical private-sector investor is going to be willing to commit. Having these tools … to get over that hump, it's essential."

Most states have historic tax credit programs, Brian Stephenson of RevitalizeMN told the Opinion page this winter. "Minnesota not being one of them, any developer that would be interested in coming here to do a project … all of a sudden is looking elsewhere. So we are losing potential business for something that is a remarkable economic engine (and) that allows communities to kind of retain their beloved landmarks. … A lot of these developers are national, and if they can't do their work here, who's to say the amount of other work they end up not doing in Minnesota?"


The state can't afford another day without a historic tax credit program. It's on lawmakers in conference committee now and on the governor to rectify the wrong that allowed the program to go away.

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