The City’s look at changing its historic preservation tax has been slowed for more deliberate study.

You may remember a few months ago when we reported on the staff’s plan to make some reductions in the amount and length of time for which breaks on City property taxes for rehabilitation of historic buildings would be available. This issue impacts not just Downtown but all of the neighborhoods for miles around it as well.

These tax incentives are important to renewal projects for several reasons. One, these deals are very hard to put together even under the best of circumstances. Investors and lenders know that these projects are more speculative as to income stream, and costs of such items as structural repairs and environmental remediation are often unknown quantities.

Second, a community’s support of these projects through “public-private partnership” tax breaks, fee rebates and other subsidies shows its political will to really support historic preservation (i.e. put your money where your mouth is).

Third, other local taxing jurisdictions, especially Dallas County and the DISD, typically follow the City’s lead as to length and amount of the tax incentives in granting relief from their property taxes also.

The problem is that the City has reached its self-imposed $9.5 million cap on these incentives. Complicating matters is a Texas attorney general’s opinion, which says that a city can’t selectively freeze the total amount of property taxes owed by taxpayers. Because of this, the Council asked the staff last May to re-examine the program and to make recommendations.

However, in the opinion of many preservationists and of the developers doing these historic rehab projects, the incentive program is just now starting to bear fruit and doesn’t need to be tinkered with. The Landmark Commission in early January asked for some changes in the staff’s proposal, as well as suggesting that an economic impact analysis be done, which, amazingly, the staff hadn’t done yet. Citizen speakers at the Landmark Commission also suggested that more real comparison be done with other major cities that have been more successful with encouraging historic redevelopment.

In any event, while the staff appeared to be trying to push the proposal through the Council as early as Jan. 28 (which some speculate may be coming from pressure from higher up at City Hall), it now looks like the brakes have been put on to some extent.

Consideration first by one or more Council committees, and the full Council, is more likely this month or in March. East Dallas-Lakewood council member Mary Poss’ finance committee is especially likely to take a close look at the staff’s proposal


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