The impact of the GOP’s tax reform plan will be debated for years to come but one aspect won’t be and that was the decision to restore the historic tax credits, cut in the U.S. House but brought back in the U.S. Senate and survived reconciliation.
“The good news is it's in the package, it's available and developers will have some certainty going forward in terms of some of the rehab work they're going to be doing here in downtown Cleveland,” said Joe Marinucci, CEO & President of Downtown Cleveland Alliance.
The only change made to the plan is a provision that spreads the benefits over five years instead of paying them up front.
“To be honest I think it's a little too early to tell, one we haven't seen the fine print in the bill itself so there's always some nuances to work through. We of course will work with our developers and the lawyers and other team members to determine exactly how to approach that,” Marinucci said.
The credits were made a permanent part of the tax code by President Ronald Reagan in 1986. Since 198, they aided 100 projects downtown that saw old buildings re-purposed for apartments and other uses from the Warehouse District to East 4th Street to East 9th Street where on the corner with Euclid Avenue you can see projects like the Schofield Kimpton Hotel, The 9 apartments and the Heinen’s in the old Cleveland Trust Bank building.
All projects made possible by the credits with more on the way.
“We counted 12 projects in the pipeline that were depending on federal tax credits,” Marinucci said. “That's part of our opportunity to take downtown Cleveland from where we are with 15,000 residents to 20,000 residents at the end of 2020.”
Yes, the investments made in saving the architecturally rich buildings in Cleveland helped in turning downtown from a place of business to a neighborhood and in turn created the demand for new construction projects that are in the works.
“We’ve seen a lot of progress in terms of taking older buildings, abandoned buildings, adaptively reusing them. That's jumpstarted the housing market over the last ten years and now we're seeing new projects like the Beacon, the apartments that are going to be at Playhouse Square, Nucleus, all of these projects really are built on the strength of the market that's been created through the tax credit program,” Marinucci said.