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Redevelopment in SC Just Got More Attractive

Columbia, SC — On June 11, 2013 Gov. Nikki Haley signed into law the Abandoned Buildings Revitalization Act, creating tremendous opportunity for towns, cities and counties that have been blighted by empty and under-utilized buildings.Here’s how it works.Any commercial building that has at least 66 percent vacancy for more than five years qualifies for a 25 percent state income tax credit earned against the cost of rehabilitation.The law will help both rural and urban communities with a stepped approach to qualifying redevelopment projects. For abandoned places in small towns, a $75,000 investment triggers the tax credit; for midsized towns and counties, the trigger is $150,000; and for the largest communities, the project minimum is $250,000.The tax credits apply to any abandoned buildings, from old strip malls to manufacturing facilities as well as historic buildings. The 66 percent abandoned threshold was developed to capture the hundreds of three-story buildings that have ground-floor retail space but are empty on the second and third floor or basement. These white elephants are all over the state in small towns and have been too risky for local developers and property owners to invest in. This tax credit will help close that gap and attract the investment capital it requires to make these places work.In traveling thousands of miles across South Carolina, we at the Palmetto Trust for Historic Preservation have seen many buildings standing empty and seemingly forgotten. Towns that were full of commerce two generations ago are now home to dilapidated buildings and empty storefronts with the inevitably lower tax revenue.It is almost impossible to save historic buildings unless there is economic incentive to invest, and it is evident that all the passionate advocacy in the world cannot change the tide of capital draining away from South Carolina’s cash-strapped communities.The Abandoned Buildings Revitalization Act grew out of a meeting more than three years ago between the Palmetto Trust and Rep. James Smith of Columbia. Rep. Smith built a bipartisan coalition of support for the bill in the House, while Sen. Creighton Coleman led the charge in the Senate. Through focused legislative leadership, statewide support from the grassroots level, assistance from organized advocacy groups and our partner organizations, the bipartisan bill finally passed both bodies — unanimously in the Senate and 111-2 in the House. It was this bill that the governor signed, standing beside us at the annual State Preservation Awards ceremony at the State House on June 11.Though the law isn’t aimed at historic sites, they will benefit tremendously. In fact, the 25 percent tax credit can be utilized on top of the 30 percent historic preservation tax credit if the building qualifies for the National Register of Historic Places. This will allow up to 55 percent of rehabilitation costs to be recaptured through tax credits — a game changer for hundreds of historic downtowns.This law will deliver far more impact to the state’s economy than just the revitalization of empty buildings.In order to project the impact of the 25 percent income tax credit on the state’s budget, the Palmetto Trust commissioned a fiscal impact study three years ago with Clemson’s Strom Thurmond Institute. The institute’s Regional Dynamics & Economic Modeling Laboratory found that every dollar of tax credit spent will generate an additional $19-$21 in South Carolina’s economic output. For every $500,000 of tax credits earned by developers, between 100 and 150 new jobs will be created.The Abandoned Buildings Revitalization Act will create new development opportunities in those places in South Carolina that need them the most.

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