The Greater Hot Springs Chamber of Commerce is working to rally support for the Federal Historic Rehabilitation Tax Credit, which was not included in the White House tax reform bill released last week, citing its importance to the redevelopment of Hot Springs.
"We don't feel like we're embellishing at all when we say the elimination of the historic tax credit would be devastating for the continued revitalization of downtown Hot Springs, as well as other cities in Arkansas and across America," Gary Troutman, president and CEO of the Chamber of Commerce and the Hot Springs Metro Partnership, said at a news conference Wednesday at the chamber building.
Troutman read a resolution passed unanimously by the chamber's board to encourage members of the state's congressional delegation to preserve the tax credit.
The HTC is a 25-percent investment tax credit for "all hard and soft costs associated with investing in a building that is listed on the National Register of Historic Places," he said, noting that in Arkansas the loss of the credit would mean more than $100 million in investments in Hot Springs and Pine Bluff will be at risk.
"Rehabilitation projects in these cities have taken years to plan and will be a costly mistake for some of the most important revitalization efforts," he said.
Troutman cited the examples of the Arlington Resort Hotel & Spa in Hot Springs and the Pines Hotel in Pine Bluff, noting, "Without the HTC, the Arlington Hotel renovation is not economically feasible. Without the HTC, Pine Bluff Rising can't help restore Pine Bluff to its former glory."
Al Rajabi, CEO of Sky Capital Group, which acquired the Arlington in July, also attended the news conference. "While we are currently facing a troubling and uncertain future for the HTC, I would like to gratefully recognize the leadership of U.S. Congressman Bruce Westerman," of Hot Springs, Rajabi told the newspaper.
Rajabi said Westerman, a Republican who represents the 4th Congressional District, "has been diligently working to try to save the (HTC), speaking forcefully and clearly that it should remain in the tax code where it was signed into law more than 30 years ago by our great President Ronald Reagan."
He encouraged other members of the delegation to "follow his lead," noting, "this incentive drives private investment into our nation's historic buildings, helps revitalize our downtowns both large and small, and puts people to work."
Troutman said between 2002 and 2016, the total number of projects rehabilitated in Arkansas was 140, with total development costs of more than $218 million, total qualified rehabilitation expenditures of more than $181 million and the creation of 4,506 jobs, generating a total income of more than $220 million and more than $44 million in taxes.
He said an additional 82 projects with development costs totaling $180 million have either been completed or are approved for tax credits in 2017 and 2018. "All of the 2018 projects representing almost $145 million would be killed if the federal tax credit is eliminated," he said, noting the projects "in most cases are catalyst for new development or renovation of nonhistoric properties" only increasing the negative impact if the HTC is eliminated.
Recent downtown projects that used the tax credit include The Waters Hotel, the Superior Bathhouse Brewery, the Hamp Williams Building and the Quapaw Bath House, he said. Projects that have applied for future tax credits include the Hale Bath House, the Arlington, SQZBX & KUHS Radio 97.9FM, Pappas Brother's Confectionery, the Springs Hotel and the Dugan Stuart Building.
"Hot Springs is a very unique place," Hot Springs Mayor Pat McCabe said. "On one side of Central Avenue downtown we call it the private business side and on the other side we have the national park. Both sides of the street have been redeveloped utilizing the historic tax credits.
"We have a great partnership with the Hot Springs National Park," McCabe said, thanking former U.S. Sen. Mark Pryor, who provided funding to secure the bath houses years ago and "now with the tax credits we are seeing those bath houses being restored."
He noted the Quapaw has been restored to "a modern-day spa" with 50 employees and a payroll of $1.5 million, while the Superior has 36 employees and a payroll of $1.1 million, not including tips, and the Waters has 45 employees and a $1.1 million payroll.
"We see up and down Central redevelopment of our fine structures which without the historic tax credit would not occur," McCabe said. "Certainly we're concerned that without those tax credits that redevelopment and revitalization of downtown and in downtowns across the country will come to a screeching halt.
"I fully understand the need for tax reform and balancing the budget, but when you're getting more back than what you're putting in that's not an area you need to be addressing. We need to feed that and support those activities that increase the tax base for the federal government and local community."
Troutman said the tax reform bill was before the House Wednesday and would likely be before the Senate Friday. "We felt it was just too important to not be proactive and take a stance," he said.
Local on 11/09/2017