St. Paul's Historic Designation Makes Tax Credits Available
Submitted by the Committee to Save St. Paul's

While the Committee to Save St. Paul's (CSSP) realizes that many Garden City residents are familiar with the mechanism of "tax credits," the Committee and its development partner, Canus Corporation, offer to those less familiar some insights into why CSSP/Canus is incorporating tax credits into its proposal, how the incentive program ensures authentic historic preservation, and what the revenue means to the project. A link on the "News" page of the CSSP website, www.savestpauls.org, connects you to a "PDF" document created by the U.S. Department of Interior, National Park Service (NPS) and Heritage Preservation Services that describes "The Federal Historic Preservation Tax Incentives Program."

The Committee to Save St. Paul's/Canus Corporation recognizes the Historic St. Paul's Main Building as an asset to the Village of Garden City and its residents because of its listing on the National Register of Historic Places. Under the Federal Tax Incentives program, a 20% rehabilitation tax credit applies to a restoration project designated by the Secretary of the Interior as a "certified rehabilitation of a certified historic structure." The National Register listing qualifies St. Paul's as a "certified structure." The program is available for properties rehabilitated for, among other purposes, residential rental, a component of the CSSP/Canus proposal. That means that the dollar amount of tax credits available is 20% of the project cost that is within the historic structure. For example, if the Committee to Save St. Paul's/Canus Corporation project for rehabilitation of the "Main Building" is estimated at $43 million dollars that means that $8.6 million becomes available revenue-an investment from outside sources that unlocks the hidden asset that is the historic character of St. Paul's.

Who purchases "tax credits" and why? Corporations, businesses and individuals purchase these credits for tax purposes. A tax credit differs from an income tax deduction, which lowers the amount of income subject to taxation. A tax credit lowers the amount of tax owed. In general, a dollar of tax credit reduces the amount of income tax owed by one dollar. So, these tax credits are purchased by tax credit investors and later sold or "syndicated."

The Federal Historic Preservation Tax Incentives program is one of the nation's most successful and cost-effective community revitalization programs. In Fiscal Year 2006, the National Park Service approved 1,253 projects that represented a record-breaking $4.08 billion in private investment.

The CSSP/Canus Corporation has assurances from Morgan Stanley's Consortium Historic Equity Fund and Raymond James & Associates investment firm for the sale of tax credits, allowing CSSP/Canus to produce the project economically while providing ample public space. That means, too, that if CSSP/Canus is awarded the project, it will actually receive over $8 million in cash to help restore St. Paul's! This is the beauty of the historic tax credit and demonstrates the true nature of this remarkable incentive for historic preservation devised by the federal government.

CSSP/Canus has developed a project design that is a "certified rehabilitation of a certified structure" consistent with the historic character of the property, and as such, will receive approval by the National Park Service. The NPS assumes that some alteration of the historic building will occur to provide for an efficient use; however, the project must not damage, destroy or cover materials or features, interior or exterior, which define the building's historic character. The Secretary of the Interior's Standards for Rehabilitation, as interpreted by the NPS, include:

--A new use for the property must require minimal change to the defining characteristics of the building and its site and environment.

--The removal of historic materials or alteration of features and spaces that characterize a property shall be avoided.

--Each property shall be recognized as a physical record of its time, place and use. Changes that create a false sense of historical development shall not be undertaken.

--Distinctive features, finishes, and construction techniques or examples of craftsmanship that characterize a historic property shall be preserved.

--Deteriorated historic features shall be repaired rather than replaced. In cases of severe deterioration, new replacement features shall match the old in design, color, texture and other visual qualities where possible.

--Surface cleaning of structures shall be undertaken using the gentlest means possible.

The Committee to Save St. Paul's/Canus Corporation believes that its project, which is in full compliance with the standards, reflects authentic historic preservation of St. Paul's. To CSSP/Canus's knowledge, none of the other St. Paul's proposals takes advantage of this major asset owned by the residents because none of the other plans involves true historic preservation.

Since 1976, the tax incentives have spurred rehabilitation of historic structures of every period, size, style and type. Canus Corporation is not only familiar with the application process, but also has knowledge of the procedures followed by the agencies involved-the Department of the Interior, National Park Service, Internal Revenue Service and the State Historic Preservation Office - has had experience with agency personnel, and can ensure the appropriate approvals.

The Committee/Canus is currently following legislation that has been introduced on the federal level to enhance tax credits. As reported several weeks ago, through the Committee's efforts, Garden City's Representative, Carolyn McCarthy, has signed on as a co-sponsor of HR 1043, which is designed to boost federal tax credits by 30%. CSSP/Canus intends to avail itself of the building's potential for state tax credit dollars, and we are continuing to monitor the progress of legislation (S.5425) introduced by State Senator Frank Padavan (Queens) to enhance the State Tax Incentives program. Passage of federal and state legislation could mean additional revenue for the Committee's proposal.