A state House bill that would extend state historic-rehabilitation tax credits was signed into law Friday by Gov. Roy Cooper.
The House and Senate reached a compromise Oct. 24 on House Bill 399, producing a 93-8 vote in the House and a voice vote approval in the Senate.
Cooper did not comment specifically on HB399 in a statement covering the signing of four bills.
The compromise addressed technical changes that did not affect the state historic-rehabilitation tax credit component of the bill.
HB399 resurfaced after four months on Oct. 8 as part of the mini-budget initiative by Republican legislative leadership.
The initial version of the bill focused solely on historic-rehabilitation tax credits and allowed for several funding options. It passed the House on a 113-5 vote June 5.
The final version grafted several tax-related elements from the Republican state budget compromise that was vetoed June 28 by Cooper. Since the House overrode Cooper’s veto in a controversial manner Sept. 11, the Senate has yet to take up its veto override vote.
The bill just extends two deadlines for qualified rehabilitation expenditures and expenses.
For projects initiated on or after Jan. 1, 2020, the deadline now extends to Jan. 1, 2024.
For projects started before Jan. 1, 2020, the deadline extends from Jan. 1, 2028, to Jan. 1, 2032, to have properties placed into service by that time.
Rep. Stephen Ross, R-Alamance, a primary sponsor of the original version of HB399, said in April that extending the expiration date on the historic-rehabilitation tax credits makes sense given that more than 2,400 projects have benefited since 1998 with a combined capital investment of more than $1.6 billion.
That includes several Wake Forest Innovation Quarter projects in downtown Winston-Salem.
The final version of HB399 includes: an income exclusion for IRA distribution for charities for individuals ages 70½ and older; certain tax deduction for amounts received as economic incentives; a sales tax exemption for American Airlines at Charlotte-Douglas International Airport; and a sales tax exemption for certain professional motorsports teams.
The historic rehabilitation tax credits have been instrumental in several projects in downtown Winston-Salem, with a combined capital investment value of more than $700 million.
“For some time, there has been an interest in renewing this program for the sake of many downtown areas predominantly,” said Sen. Joyce Krawiec, R-Forsyth. “With many aging structures in our downtown areas, there has been interest in incentivizing restoration.”
For example, Chris Harrison, developer of the $55 million Plant 64 mixed-use project in Wake Forest Innovation Quarter, announced plans Oct. 10 for an $80 million to $100 million mixed-use project on the Whitaker Park manufacturing campus.
The first of four phases for the project involves creating 164 loft apartments in the historic former R.J. Reynolds Tobacco Co. Buildings 2-1 and 2-2 at 951 Reynolds Blvd., across from Woodland cemetery.
In October 2017, the three-story leaf buildings were named to the National Register of Historic Places, making their renovation eligible for lucrative state and federal historic rehabilitation tax credits that have contributed to major renovation projects in downtown Winston-Salem. The 2-1 building was built in 1937 and the 2-2 building in 1955.
“Getting those (tax credit deadline) extensions into law will have a huge impact on the new project,” Harrison said. “It keeps things on track.”