Since 1984, Louisiana Main Street has helped communities transform their historic downtowns through revitalizing historic buildings & structures. Louisiana Main Street is part of the Lt. Governor’s Office of Cultural Development & the Division of Historic Preservation. Louisiana Main Street provides technical & financial assistance in the areas of economic development, exterior & interior structural revitalization, streetscape design, as well as promotion & organization development to numerous Main Street districts located all over the state.
The term Main Street has come to symbolize the economic engine of our smaller towns & cities. As the engine, Main Street is the driving force behind economic stability for small businesses, local tax revenue, infrastructure improvements & public services for the community. Community strength comes through the stability of the historic commercial districts throughout Louisiana. As it was at the turn of the century, the hub of commercial activity is returning to the downtown areas, because residents and tourists alike recognize the uniqueness & authenticity these districts provide.
The purpose of this toolkit is to give an overview of the various financial incentives that may be available to assist real estate developers & individuals to rehabilitate, restore, & revitalize historic buildings located within commercial historic districts and Main Street Districts.
Federal Rehabilitation Tax Credits
Federal Rehabilitation Tax Credits are available to properties that are income producing (commercial, industrial, agricultural, or rental-residential purposes) & listed in the National Register of Historic Places or are considered a contributing element within a National Register District.
Owner-occupied residential properties do not qualify for this tax credit.
The program is jointly administered through the National Park Service (NPS) & the Internal Revenue Service (IRS).
Rehabilitation projects must be substantial; meaning, the expenses must exceed the value of the structure, & the project must adhere to the Secretary of the Interior’s Standards for Rehabilitation.
The ownership of the building must remain intact for 5 years in order to receive the full value of the tax credits.
Benefits:
- 20% income tax credit based on Qualified Rehabilitation Expenses (QREs) over five (5) years
- the tax credit is generally available the year the property is placed back into service
The Louisiana Division of Historic Preservation acts as the applicant’s first point of contact regarding historic properties. Prior to conducting any work, please contact Historic Preservation staff at (225) 342-8160.
State Commercial Tax Credits
State Commercial Tax Credits are available to properties that are income producing (commercial, industrial, agricultural, or rental-residential purposes) & located within a designated Downtown Development District or a certified Cultural District.
The building must be at least 50 years old.
The program is jointly administered through the Louisiana Division of Historic Preservation & the Louisiana Department of Revenue.
The rehabilitation expenses must exceed $10,000 in qualified expenses & the project must adhere to the Secretary of the Interior’s Standards for Rehabilitation.
Benefits:
- 25% income tax credit based on Qualified Rehabilitation Expenses (QREs); for projects in rural areas, the credit as been increased to 35%
- once earned, the tax credits are fully transferable & may be carried forward for up to five (5) years
- some projects may be eligible to stack both the Federal Rehabilitation Tax Credits & the State Commercial Tax Credits
The Louisiana Division of Historic Preservation acts as the applicant’s first point of contact when pursuing historic tax credits. Prior to conducting any work, please contact Historic Preservation staff at (225) 342-8160.
Louisiana Main Street Restoration Incentive Grants
Funded by the State, the program operates under the umbrella of the National Main Street Center, a subsidiary of the National Trust for Historic Preservation.
Louisiana Main Street offers Redevelopment Incentive Grants as part of the revitalization efforts to offset overall project costs. These are dollar-for-dollar matching grants.
These grants are to stimulate local economies by utilizing local tradespeople, design professionals & suppliers to reconstruct storefronts, restore interiors & rehab empty buildings for new commercial ventures thereby generating new tax revenues throughout the state.
Restoration grants are highly sought after & competitive as state funds are becoming more & more scarce.
Benefits:
- Redevelopment Incentive Grants can be used on projects that create the spark needed to ignite large redevelopment initiatives & projects to bring about larger holistic improvements to a historic district.
- Revitalizing historic commercial districts is sustainable economic development that directly enhances quality of life & helps to create a sense of place & purpose.
Prior to conducting any work, please contact Ray Scriber at rscriber@crt.la.gov or (225) 342-8162. Mr. Scriber can answer any questions & ensure that the building is in fact a qualifying structure eligible to apply for grant funds.
Historic Preservation Fund Grant
Each year the State Historic Preservation Office distributes an allocation of federal funds for projects through a competitive grant process. The funds come to the Division of Historic Preservation from the National Park Service. 10% of the annual allocation goes towards Certified Local Governments (CLGs).
Eligible activities:
- survey & inventory
- cultural resources documentation
- preservation planning
- educational & public outreach activities
- National Register nominations
Federal Opportunity Zones
Federal Opportunity Zones are census tracts within Louisiana that have been designated by the U.S. Treasury’s CDFI Fund as Low Income Community tracts. Currently, there are 150 qualifying tracts in Louisiana. As of February 2021, there are 35 Main Street Communities in Louisiana: 16 are either partially or completely located in Opportunity Zones (Thibodaux Main Street is not within an Opportunity Zone).
Opportunity Zones are an economic development tool designed to incentivize financial investment & job creation in distressed communities.
The law, which was created by Congress in the Tax Cuts & Job Act of 2017, provides a federal tax incentive for investors to re-invest their capital gains into Opportunity Zones.
Historic rehabilitation projects located within Opportunity Zones may be eligible for additional economic incentives.
Benefits:
- the policy enables funds to be responsive to the needs of different communities, allowing for investment in operating businesses, business expansion, equipment, real estate property & infrastructure
For more information on Opportunity Zones, please visit www.opportunitylouisiana.com/business-incentives/opportunity-zones.
New Market Tax Credits
The New Markets Tax Credits (NMTC) Program was created in 1994. It is focused on expanding economic opportunities in low-income communities by attracting private investment.
The NMTC Program attracts private investment into low-income communities by allowing investors (both individuals & corporations) to receive tax credits against their federal income tax in exchange for making equity investments in specialized financial intermediaries called Community Development Entities (CDEs).
The credit is 39% of the original investment amount & is claimed over a seven (7) year period.
CDEs are located throughout the state & are typically a bank or other financial institution.
The NMTC Program is jointly administered by the Community Development Financial Institutions (CDFI) Fund & the Internal Revenue Service (IRS).
Only qualified projects are eligible to receive these tax credits.
Consult a tax attorney for more information.