Communications Committee

Terry Squyres, AIA (Chairperson) GWWO, Inc./Architects
(410) 332-1009; tsquyres@gwwoinc.com
Jim Determan, AIA (Board Liaison), Cochran Stephenson & Donkervoet, Inc.
(410) 539-2080; jdeterman@csdarch.com

Represents the interests of AIA Baltimore to the public.

Heritage Rehabilitation Tax Credit Program Letter to the Legislature

Save the Heritage Rehabilitation Tax Credit Program

I was dismayed to learn that Maryland legislators may kill a cost-effective program that has become a national model for cities trying to stem sprawling development. The Heritage Rehabilitation Tax Credit Program, which provides a 20% tax refund for certain improvements to certified historic properties, has led to significant revitalization in communities across the state, from Chestertown to Frostburg.

The program benefits homeowners too.

Not just for big, commercial developers, the tax credit offers one of the few incentives for homeowners to improve neighborhoods one house at a time. A prime example is Baltimore’s Mt. Vernon neighborhood, where the program has spurred dozens of homeowners to invest in an established, inner city community.

Killing it will not save a penny until 2005 or 2006.

In a recent report, the Office of Legislative Services advises legislators that they can save $28 million a year by killing Heritage Rehabilitation Tax Credit Program. However, in truth, Maryland would save nothing this fiscal year. It takes at least two years after submitting an application to the Maryland Historic Trust for a project to get the permits, obtain financing, complete the project and obtain approval from the Maryland Historic Trust for the completed work. Then, after all of these things have been completed, the next tax year they can apply for the tax credit. Killing this important program will save nothing until 2005 or 2006. All the credits that will cost the State money this year and next year have been committed to projects that are already in the pipeline.

The program makes the State money.

The program’s beauty is that, although Maryland sacrifices income initially, the State eventually generates revenue through increased property, piggyback and sales taxes. A study by Lipman, Frizzell, & Mitchell and the University of Baltimore (www.preservemd.org/txcrstudy.pdf) shows that future revenues from commercial tax credit projects far outweigh the State’s upfront investment.

At a time of budget crisis, Maryland badly needs the economic stimulus the Heritage Rehabilitation Tax Credit provides. Developers as well homeowners throughout the region are taking part in the program. It prevents sprawl while rejuvenating our older communities. Plus, it ultimately makes money for the State.

Ed Hord is a principal in the architecture and landscape architecture firm Hord Coplan Macht and a past-president of the Baltimore and Maryland chapters of the American Institute of Architects (AIA). He has also served as a vice president on the national board of AIA.

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