Governor Walker Lifts Moratorium on New Historic Tax Credit Program
On Monday, July 14, Governor Walker partially lifted the three-week moratorium on the state’s new historic tax credit program that had been more popular and expensive than anticipated.
In 2013, the historic tax credit program was modified to double the state income and franchise tax credit for qualified rehabilitation expenditures from 10 percent to 20 percent for certified historic buildings. In addition, the scope of the program was expanded to include non-historic buildings built before 1936.
Within the first several months, the program generated considerable interest and resulted in the approval of approximately $35 million in tax credits. However, because the state anticipated and budgeted for only $4 million in tax credits, a moratorium was placed on the entire program on June 23 to ensure that the state did not incur a significant budget shortfall.
After consulting with commercial developers, local officials and the state Historical Society, the Governor decided to lift the moratorium on buildings certified as “historic” due to the “rigorous application process” required by the State Historic Preservation Officer and the National Park Service in order to qualify for state tax credits. The moratorium, however, will remain in effect for non-historic buildings.
A property is eligible for the tax credit program if it is on the state or national register of historic places or determined eligible by the Wisconsin Historical Society to be listed. A property also may qualify for the program if it is located in a historic district that is on the state or national registers and determined by the state to be historically significant or connected to building that is.
The expansion of the historic tax credit program was a legislative priority for NAIOP-WI during the past legislative session. After the moratorium went into effect, lawmakers reached out to NAIOP-WI members to get feedback on how the moratorium was impacting pending economic development projects. Ongoing conversations about how to further modify the program to make it both useful to the economic development community and financially feasible will likely continue.
Wisconsin DOA Identifies Property for Possible Sale
To free up underutilized state assets, the Wisconsin Department of Administration (DOA) recently compiled a list of state-owned properties that could be put up for sale in the near future.
The 2013-15 state budget required DOA to create an inventory of state assets that could be sold or leased in the next biennium. The inventory includes the following properties:
• Underutilized acreage at the Hill Farms State Transportation Building, Madison
• T-Hanger at Dane County Regional Airport, Madison
• Telecommunications towers and related infrastructure, various locations statewide
• Northern Wisconsin Center, Chippewa Falls
• Underutilized acreage at the Southern Wisconsin Center, Union Grove
• Ethan Allen School, Wales
• Badger Road State Office Building, Madison
• Knapp House, Madison
• Wiscraft Workshop & Administration Buildings, Milwaukee
• 32 heating & cooling plant facilities in various locations statewide
The DOA was careful to note that just because a property is located on the list doesn’t necessarily mean that it will be sold or leased. No decisions have been made regarding the future of any of these properties. Also, the state did not provide any estimated value of such properties “due to the complexity of such a determination as well as the negative impact premature disclosure of such information could have on any future negotiating process.”
Over the next several months, the DOA will continue to review and analyze properties for possible sale or lease. If the DOA determines that a property should be sold, the agency must follow the statutory procedures for selling state property, which includes obtaining the permission of the State Building Commission and the legislature’s Joint Finance Committee.
To assist in this evaluation process, the DOA has hired several real estate industry experts including:
• Public Financial Management, Inc.; independent financial advisor; heating & cooling plant, utility, and related
• Robert W. Baird & Co.; independent financial advisor; real estate development services
• William Blair & Company; independent financial advisor; public private partnerships services
• Loop Capital Markets; independent financial advisor; general services
• J.P. Morgan Securities LLC; asset broker; heating & cooling plant, utility, and related assets
• Latham & Watkins LLP in partnership with Godfrey & Kahn, S.c.; legal services; heating & cooling plant, utility, and related assets
The NAIOP Wisconsin Board of Directors, in conjunction with a recommendation by the Public Affairs Committee has endorsed several candidates in the State Senate and Assembly races as well as the 2014 gubenatorial race. The endorsement decisions are made after considering a myriad of factors including past voting records, positions on commercial real estate issues, and future leadership potential.
“NAIOP’s endorsements are intended to shine a light on legislators from both parties who have supported important legislative initiatives that strengthen and benefit the commercial real estate industry in Wisconsin. That support contributes directly to job creation and growth in tax base throughout the State,” said Richard Lincoln, Board of Directors Member and Chair of the Public Affairs Committee.
To see a list of the endorsements, click here