Recently, the Ohio Department of Development (DOD), in partnership with the Ohio Historical Society announced its Round 4 list of tax credit awardees. I have previously blogged about this highly successful competitive state tax credit program. The Cleveland Plain Dealer lists awardees in its most recent article http://www.cleveland.com/business/index.ssf/2010/06/four_northeast_ohio_projects_i.html
As a catalytic program for downtown redevelopment in many of Ohio’s aging center cities. Governor Ted Strickland announced the program’s latest round of awardees. In the fourth round Ohio DOD granted $28.3 million in credits. Since the program’s inception in 2006 as part of the State’s bi-partisan recovery act, more than $246 million in credits have been awarded. I have written extensively about the effectiveness of this program. See my post which measured leverage and value of the program. (http://aballoon.wordpress.com/2010/02/25/historic-preservation-jobs/)
Tax credits, especially when given the power of transferability allow development projects to boost the return for a project which otherwise would not occur. Because these credits allow a developer or investor credit dollar for dollar off of their Ohio tax liability they have the ability to shore up a project’s bottom line. They can be sold to investors for up-front cash value, usually at a small discount below the credit’s face value. This helps a developer’s bottom line by giving them cash up front, improving a project’s projected return with respect to the time value of money. Where as an investor wouldn’t invest in a project with a 6% return, a historic tax credit can boost that return to 9% or 10%, aligning a project’s reward relative to its risk.
Much praise should be given to this effort. Firstly, by working together the Ohio Historical Society has recognized the true economic and trans formative value of preservation. Secondly, by having high-profile public officials lead the program like Lt. Governor Lee Fisher the Tax Credit Program has a strong public face and cheerleader. In a state where local residents often feel like “Columbus just doesn’t care” residents can now read about state investments that are leveraged, trans formative, and build a positive image.
Schoenfeld Building in Downtown Cleveland Under Renovation
I found a nice historic image that includes part of the Schofield building facade, and included it in a post a while back on Cleveland Area History.
http://www.clevelandareahistory.com/2010/08/schofield-building-revisited.html