GREEN BAY – Part of a too-popular state tax break program for rehabbing historic buildings is up and running, again.
Last month, the Wisconsin Economic Development Corporation – or WEDC – put the new program on hold for the rest of the year after 29 of the approved projects qualified for $35 million in tax breaks. The program was originally estimated to have a budget impact of just $4 million.
Monday, WEDC lifted the moratorium, putting a $40 million downtown Green Bay redevelopment project back on track.
The Hotel Northland served as the backdrop for the introduction of legislation increasing the percentage of tax credit reimbursement in March 2012. It also hosted the governor’s bill signing ceremony earlier this year. Passed with overwhelming bi-partisan support, legislators didn’t put credit caps in place.
The hotel project’s credits weren’t approved when the program was frozen. With it now lifted, Green Bay city leaders say they’re relieved.
“We’re very happy that the moratorium got lifted, we were quietly confident that we would be able to get it lifted,” said the city’s economic development director Greg Flisram.
Federal and state historic tax credits are expected to make up around 40-percent of hotel’s funding.
“Big, big piece of the capital structure, yes,” said Flisram.
“With the federal and the state tax credits – combined – it’s about $14 million of credits that are very, very much needed,” said the hotel’s developer, Mike Frantz, Frantz Community Investors.
Frantz says the moratorium did not slow the project’s timeline. Construction is expected to start in October, with the hotel opening next summer.
“In some ways, we’re a victim of the success of the program,” Frantz said in a phone interview with FOX 11. “But thank goodness they were able to lift the moratorium on the nationally registered – or historic monuments.”
“We think the rigors of the state historical society process and the department of interior process warrant lifting that portion of the moratorium,” said WEDC’s secretary & CEO Reed Hall in a phone interview.
But the freeze on tax credits for non-certified historic buildings built before 1936 remains in place. That means projects like Titletown Brewery’s expansion into the old Larsen Canning Company would likely no longer qualify.
However, its credits were already approved. So that project will continue to move forward.
Developers looking for funding under the program will now have to provide more information on the project. WEDC will start collecting information on the state’s return on investment as a part of the Historic Tax Credit program, like long-term and short-term projected jobs, wages, leverage of investment, local participation and tax impact.
“Why weren’t these protocols in place the first time around?” FOX 11’s Bill Miston asked Hall.
“Well, it was not part of the legislation,” he said.
Frantz says he does not have exact numbers for how much state and federal money the project will receive. But he expects to find out soon.