Rehab credits announced

State cap limits city's share of relief for renovation projects to $15 million

July 27, 2006|By GADI DECHTER AND ANDREW A. GREEN | GADI DECHTER AND ANDREW A. GREEN,SUN REPORTERS

Expressing dismay that the state could not provide more help to Baltimore, Gov. Robert L. Ehrlich Jr. announced yesterday $20 million in tax credits slated for historic renovation projects across Maryland.

Ehrlich said he was disappointed that millions more will not go to qualified city projects because of the General Assembly's adoption in 2004 of a provision that capped Baltimore's share at half of the $30 million in credits available each year.

"We have funded every single project outside of the city of Baltimore, but $10 million is left on the table because of this cap," Ehrlich said.

The State Rehabilitation Tax Credit Program was designed as a companion to a federal effort initiated in the 1970s that rewards accurate restoration of historically significant residential and commercial structures.

The state program was set to expire in 2004 and almost did because of concerns among the legislature's budget leaders that it had grown out of control.

In the final days of that year's legislative session, Ehrlich and lawmakers compromised on a plan that established annual spending caps and limited the amount of grants that could go to Baltimore, which until then had received the vast majority of the tax credits.

Now, projects in the city can receive no more than half the annual allocation of state tax credits, a provision that helped win the support of leading lawmakers from the Washington region.

But Ehrlich said that limitation has hindered the program because far more than half of the projects in need of the credits are in Baltimore.

In each of the past two years, every project outside of the city has been funded, but the state has been prevented from making additional grants in the city because of the cap.

Last year, the state was unable to spend $500,000. This year, the unspent funds reached $10 million.

Three-quarters of the $20 million were awarded to city preservation projects, with the remaining $5 million spread among other counties.

A spokeswoman for the state Planning Department said $7 million in tax credit requests for city projects were not awarded because of the jurisdictional cap.

To qualify for the competitive grant program, which is administered by the Maryland Historical Trust, applicants have to submit restoration plans for projects that meet requirements set by the U.S. Department of the Interior.

Among the grants awarded were $1.4 million for the restoration of an Elks Lodge in Hagerstown and $500,000 dollars for a mixed-use commercial project in Allegany County.

One of the city projects that made the cut is the Garrett-Jacobs Mansion in Mount Vernon, which was awarded $1.2 million for continuing restoration of the historic property.

The nonprofit foundation that owns the building intends to use the grant to refurbish the mansion's interior, including the drawing room and ballroom.

First, it has to raise the $6 million cost of the project, said Robert F. Leach, the foundation's president.

The grant might help in fundraising, Leach said. "It could enhance our ability to raise funds for this restoration, because people know we're going to get some matching money from the state," he said.

Recipients of the tax credits can apply up to 20 percent of rehabilitation and restoration expenses toward their state income tax bills.

Nonprofit recipients will receive credit in the form of a grant.

"The program is a great incentive to people to make a deeper commitment to historic preservation than they otherwise might do," said Karen M. Footner, a consultant to the Garrett-Jacobs Mansion Foundation. "It's really significant in an older city like Baltimore, where an historic legacy can be demolished so quickly."

gadi.dechter@baltsun.com andy.green@baltsun.com

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