Fund the Historic Tax Credit Program

Published in Pawtucket Times, June 13, 2014

With November’s election cycle looming, state lawmakers are moving quickly to finish the people’s business. Once the session ends they will begin their political campaigns to garner votes to retain their seats. .Yesterday evening the House began its floor debate on the House Finance Committee’s $8.7 billion 2015 budget proposal. At press time, this columnist has no knowledge of the outcome. But, when the dust settles late Thursday evening, if a budget amendment to fund the HTC program is defeated or even if supporters are successful in getting one passed, the Senate chamber becomes the next battle ground to fund the tax credit program.

Last week, the House Finance Committee declined to recommend funding for this program, despite Governor Chafee’s inclusion of $52 million for the Historic Tax Credit (HTC) program in his FY 2015 Budget proposal. As a result, Grow Smart Executive Director Scott Wolf and his fellow Historic Tax Credit advocates are running a full court press to push House and Senate leadership to include funding for the popular economic-development and neighborhood-revitalization program in the 2015 Budget.

In the lobbying blitz, Wolf is telling lawmakers and everyone who will listen that the HTC program has successfully transform older cities and towns in the Ocean State, by spurring reinvestment, revitalization, and job generation. These programs provide an incentive in the form of a tax credit, to property owners to renovate old historic buildings. These state credits can be and often are paired with the federal historic preservation tax credit to renovate commercial properties.

Historic Tax Credit – Great Economic Development Tool

It’s a success in the Ocean State, too, notes Wolfe. Rhode Island’s HTC program has stimulated more than $1.6 billion of investment in more than 250 projects within less than 7 years. For every dollar the state invests, there is a more than five dollar return in economic activity based on a study Wolf’s organization, Grow Smart Rhode Island, commissioned several years ago.

Wolf adds, “The evidence that the historic tax credit makes a real positive difference can be seen on the ground in communities throughout the state – in bustling commercial properties like Hope Artiste Village in Pawtucket and along Westminster Street in Providence, in new apartments for urban workers and new affordable housing units. It can be seen in increased property tax revenues from rehabbed buildings. It can be seen in neighborhoods that have been rescued from the blight of vacant, derelict buildings.”

According to a media release issued jointly by Grow Smart Rhode Island and Preserve Rhode Island, $52 million in bond authorization remains in reserve from the total bond authorization approved in 2008 by the General Assembly for the original HTC program, which was discontinued in 2008 for any new projects but maintained for many other projects already under way at that time.

The General Assembly in 2013 reinstated the program, using $34.5 million in unclaimed tax credits from the prior program and, Wolf says, “The new program has ignited 26 new projects that will pump nearly $180 million into the Rhode Island economy, but 27 additional projects are waitlisted and in jeopardy if additional funding is not provided to sustain the program. By not including an extension of historic tax credit funding in the upcoming budget, the state risks forgoing up to $160 million in construction activity alone. Significant sales and employment taxes also will be lost.”

Preserve Rhode Island Executive Director Valerie Talmage says, “Our Historic Tax Credit program has an outstanding track record. From 2002 to 2008, it generated $1.3 billion in new private investment in Rhode Island’s real-estate economy, which resulted in 22,000 construction jobs, 6,000 permanent jobs, and total wages of more than $800 million. Our state cannot afford to shut this program down.”

Wolf added that suspending the HTC program again would be harmful because “We’d be ceding the competitive advantage provided by our world-renowned collection of distinctive historic buildings and neighborhoods to nearby states such as Connecticut, Massachusetts, Maine, and New York, each of which has ongoing and robust state historic tax credit programs.”

Finally, Wolf emphasized that another HTC program suspension would “Send a bad signal to investors and entrepreneurs about Rhode Island’s business climate and economic development credibility.”

Wolf and Talmage, together with their organization members, partners, and fellow advocates are calling on the General Assembly to “Continue the Historic Tax Credit program because it is a sound and critical investment in Rhode Island’s cities and towns and a proven job-generator and revenue producer, which our state sorely needs.”

In their lobbying Wolf, Talmage and their network of approximately 90 organizations who support the HTC program are quick to identify its positive impact. State officials will see higher state revenues through construction and other jobs generated by the HTC projects. In addition, job creation and increased employment taxes are derived years in advance of any outlay of state funding because Historic Tax Credits are not released for any enrolled project until the project is completed. Sales-tax revenues result from construction materials and other goods purchased for HTC projects also benefit the state in advance of any outlay.

Wolf and others also note that The Budget Office forecasts no fiscal impact to the state budget from the proposed $52 Million in debt service until FY ’19 because bonds won’t need to be issued until the projects have been completed and the tax credits have been claimed.

In an Op Ed in the Providence Journal, Pawtucket’s Mayor Donald R. Grebien and Central Fall’s Mayor James Diossa, support Wolf’s assessment of its impact in the state’s cities and towns. The Mayors say that their fiscally stressed communities benefit from Historic Tax Credits through increased property assessments.

Developing an Old Mill in Pawtucket

Antique Dealer and entrepreneur Scott Davis knows a good program when he sees one. The Eastside resident is planning to develop his old Fuller manufacturing mill on Exchange Street into a combination of commercial and residential space, but any state backpedaling of funding the HTC program will make it difficult to get his project off the ground.

An inquiry by Davis to Chairman Raymond Gallison of the House Committee on Finance, about the suspending of funding for HTC program resulted in an email explaining the decision. The chairman noted that a primary reason for rejecting Governor Chafee’s proposed additional $52 million HTC funding was based on the assertion that there were already sufficient funds in place in the existing program to meet current demand.

Davis disagrees. “My project, which is a rare and historically significant wooden mill built in a prominent Pawtucket city location alongside the Blackstone River is Number 65 in the queue,” he says, noting that he believes that none of the current funds in place will ever be allocated to his project.

“Financial assistance is essentially the only way that my mill project will ever be able to developed, says Davis, who notes that the cost to restore the historic structure versus the prevailing rental rate for space in Pawtucket simply doesn’t work out.

Chairman Gallison also noted that issues with tax credit brokers are a stumbling block for the program,” says Davis. “It is unimaginable that the resulting (legislative) decision] would be akin to ‘throwing out the baby with the bathwater”. If there is a problem with the brokers, Davis calls on lawmakers to fix it, but threatening so many important buildings, jobs, and resulting tax revenues in the process just doesn’t make sense to him.

Davis says that previous HTC funds have made 8 major Pawtucket projects possible. According to the Pawtucket Foundation, the tax incentives were the catalyst for $150 million in local investments that increased property values by 728 % and increased Pawtucket tax revenues by over $1 million annually.

“Keeping these historic buildings intact while awaiting funding assistance is extremely expensive and no doubt we will lose many of them if we can’t save them promptly,” predicts Davis. “ I can tell you from personal experience that just keeping my small 26,000 sq. ft. mill ‘on hold’ costs me several thousand dollars per month just for taxes, insurance, utilities, fire safety, security and basic upkeep,” he says.

HTC is No 38 Studios

Some speculate that recent headlines about 38 Studios and tax credits in general may have spooked House and Senate Leadership to back away from funding the HTC program. Ultimately, the ball is in the court of Senate leadership who must respond to the budget proposal submitted by the House. How can lawmakers fear another 38 Studio debacle when the Historic Tax Credits are only issued upon completion of the project? In other words, after construction workers have laid the last brick – only after new residential and office space is actually available.

But, Gregg Paré, the Rhode Island’s Director of Communication, says don’t expect any action in the Senate to fund the state’s HTC program this year if the House fails to act. “The Senate is in agreement on the budget with the House,” he says, noting that Senate leadership usually iron out any differences before the budget reaches the House floor.

Paré says that the Senate has only once modified the House budget proposal in decades. But, now it’s time for this legislative action to happen again this year especially if the House budget does not include funding for the HTC program.

To Wolf, Talmage, and Davis, and to municipal leaders in a number of Rhode Island’s cities and towns, it is obvious that the program works and serves as an important tool for community revitalization and economic development.

For this columnist, funding the HTC program is just the right thing to do, for the economy and most importantly, for the tax payer.
.
Herb Weiss is a writer covering health care, aging, medical issues and the economy. He can be reached at hweissri@aol.com.

Advertisements

Red Bandana Fund to Recognize Henry Shelton and Providence Student Union

Published June 6, 2014

In just two days, look for the gathering of friends, Rhode Island College educators, progressives, folkies and family members of the late Richard J. Walton, who come to the Red Bandana Award to pay homage and remember him. With his prominent long white beard and red bandana, decked out in blue jean overalls and wearing a baseball cap, Walton was a dedicated advocate of worker rights and committed to the nurturing of young people as a college professor at Rhode Island College. He gave hundreds of hours of service every month to organizations including Amos House, the George Wiley Center, Providence Niquinhomo Sister City Project, the Green Party, and Stone Soup Folk Arts Foundation.

The Red Bandana Fund was also created to be a legacy to help sustain Rhode Island’s community of individuals and organizations that embody the lifelong peace and justice ideas of Walton. Through the Red Bandana Fund, an annual financial award will be made to an organization or individual whose work best represents the ideals of peace and social justice that exemplify Walton’s life work

Stephen Graham, a member of committee organizing the fundraiser, noted that 12 nominations received. “There were many deserving nominations, all of which one could make an excellent argument for the award,” he said.

“After much deliberation and agonizing, the Red Bandana Fund decided to give not one but two awards,” noted Graham.  “Awards will be given to longtime community activist and hell-raiser, Henry Shelton, and the other to the passionate, unrelenting organizing workers called the Providence Student Union (PSU),” he says, noting that their work embodies the spirit and work of Walton, a well-known social activist in the Rhode Island area who died in 2012.

“Richard would have loved the choices,” noted Graham, a very close friend of Walton’s and a retired community activist.

The Red Bandana Fund celebration takes place on Sunday, June 8 at Nick-a-Nees, 75 South Street. In Providence from 4:00 p.m. to 7:00 p.m. The event is open to the public and donations accepted.

Shelton, a former Catholic priest and long-time director of the Pawtucket-based George Wiley Center, is known throughout the region for his steadfast commitment to bettering the lives of all Rhode Islanders, especially the poor and disadvantaged. As a longtime advocate for the needy, he has been a fixture on the streets and at the statehouse for decades, advocating for fairness in housing, public transportation, and medical care.

“It is not an understatement to say that Shelton is the conscience of this state and has been for a long, long time,” says Graham, noting that there was no way Shelton could be ignored.

The committee also honored a new generation of young people working to make a better world, added Graham. So, the Red Bandana Fund also recognizes the PSU for its groundbreaking work done in addressing important issues of education in creative and powerful ways. The PSU is an important voice in the debate over the value of high-stakes testing, challenging the NECAP tests as a requirement for graduation, and has forced officials and politicians to address their concerns, he said.

“It is their commitment to grass-roots organizing and social change, at such a young age, that has earned them the recognition and thanks of the Red Bandana Fund and for all those fighting for justice in today’s society,” says Graham.

Coming up with a name for Walton’s fundraiser was tied to his unique fashion sense and was the idea of his daughter Cathy Barnard and Richard, her brother. Like most people, Richard had a vivid, visual image of his father, who had long white hair and beard, being known for wearing his trademark worn blue jean overalls, a red bandana and Stone Soup baseball cap. After Walton died his close friends came over to his house and wanted one of his red bandanas to remember him. Thus, the red bandana became the perfect moniker and recognition for the annual fundraiser.

Says Bill Harley, also on the organizing committee, The Red Bandana Fund is a continuation of Walton’s tradition of having an annual birthday bash – usually held the first Sunday in June, to raise money for Amos House & the Providence-Niquinohomo Sister City Project and other progressive causes.

Over 24 years, Walton had raised over $40,000 for these favorite charities, attracting hundreds of people each year including the state’s powerful political and media elite to his family compound located at Pawtuxet Cove in Warwick

“We hope all the people who attended Richard’s parties in the past [1988 to 2011] will show up for the event and you can bring your favorite dish for the potluck,” adds Harley.

“This is our second year giving the award,” said Bill Harley, a member of the selection committee. “We chose the awardees from a great list of nominations, and decided to acknowledge both young organizers, and one of our long-time heroes. Too often, the people who are in the trenches working for us don’t get recognized. We hope the Award begins to address that shortcoming.”

According to Graham, “last year’s event was more of a concert and tribute to Walton.” Over 300 people attended the inaugural Red Bandana fundraising event in 2013 at Shea High School, raising more than $11,000 from ticket sales, a silent auction and raffle. At this event, the first recipient, Amos House, received a $1,000, he said.

Graham says the well-known nonprofit was chosen because of its very long relationship with Walton. He was a founding board member, serving for over 30 years, being board chair for a number of years. For almost three decades, the homeless advocate spent an overnight shift with the men who lived in the 90-Day Shelter Program each Thursday bringing them milk and cookies. Each Friday morning he would make pancakes and eggs in the soup kitchen for hundreds of men and women who came to eat a hot meal.

As to getting this year’s Red Bandana Fund off the ground, Harley says: “It’s been a year of fits and starts to make this thing work. I believe that the establishment of this award, and the honoring of people on a yearly basis, will help us build a community here that can transform our culture. It’s a little thing down the road, I can envision this award meaning more and more to recipients, and to the community those recipients come from.”
.
Walton touched people’s lives, Rick Wahlberg, one of the organizers. “Everyone had such an interesting story to tell about Richard,” he stated, noting that the Warwick resident, known as a social activist, educator, humanitarian, very prolific writer, and a co-founder of Pawtucket’s Stone Soup Coffee House “had made everyone feel that they themselves had a very special, close relationship with him.”

Like last year’s inaugural event, Wahlberg expects to see many of Walton’s friends at the upcoming June 8th fundraiser. He and others attending will view this event as a “gathering of the clan” since those attending will be Walton’s extended Rhode Island family.

So, block out some time on your busy Sunday. Come to the Red Bandana Fund event to remember our good old friend, Richard Walton, and support his legacy and positive impact in making Rhode Island a better place to live and work. Enjoy the gathering of caring people who come to recognize the advocacy efforts of Shelton and the PSU to carry on Walton’s work.

Spread the word.

Core participants in organizing this year’s Red Bandana Fund include, Bill Harley, Stephen Graham, Jane Falvey, Barbara & Rick Wahlberg. Other participants included Jane Murphy, Jodi Glass, Cathy Barnard and Richard Walton, Jr.

For more information about donating to The Red Bandana Fund, go to http://www.soup.org/page1/RedBandana.html.

Herb Weiss, LRI’12, is a writer who covers health care, aging, and medical issues. He can be reached at hweissri@aol.com