RICHMOND – During an annual legislative reception hosted last week, First Lady Pam Northam highlighted the findings of two just-completed studies that show the sustained and substantial contribution preservation makes to Virginia’s economy through the incentives of state historic rehabilitation tax credits (RTCs) to repurpose and recycle old buildings.
One study, conducted by the L. Douglas Wilder School of Government and Public Affairs at Virginia Commonwealth University, particularly focused on the returns the Commonwealth reaps from its investment in historic preservation through RTCs.
Significantly, the VCU study found that much of the $4.5 billion in private investment would have gone untapped without the incentive of the state’s tax credit being available to property owners, developers, entrepreneurs and others to undertake rehabilitation projects, which must be carried out in strict accordance with the U.S. Secretary of Interior’s ‘Standards of Rehabilitation’.
Over the 20 year period, the state RTC program has spurred the rehabilitation, reuse, and preservation of thousands of historic buildings in rural and urban communities throughout Virginia. Within those communities, RTC projects have anchored and encouraged revitalization and economic sustainability moving forward as new businesses and residential spaces arise in once-vacant and often formerly blighted buildings, and by creating jobs in the construction, retail, service, tourism, and other sectors of the economy.
A separate and complementary study undertaken by Preservation Virginia examined the impact of the federal Historic Tax Credits (HTC) on Virginia’s economy. Taking 2014 as an example, the study found that the program resulted in $467 million in economic output, supported 9,960 jobs and generated $3.50 for every $1 invested through the first three years.
“These studies clearly demonstrate the sustained and substantial contribution that preservation makes to Virginia’s economy,” said First Lady Pamela Northam. “The Governor and I applaud the Department of Historic Resources and Preservation Virginia for caring for our rich past and preparing us for an amazing future.”
Conducted on behalf of the Virginia Department of Historic Resources, the VCU study analyzed the overall impact of the state’s RTC program from its inception in 1997 through 2017, its twentieth anniversary. During those two decades, according to VCU’s Wilder School, the RTC program issued $1.2 billion in tax credits and leveraged $4.5 billion in private investment.
“Preserving and restoring historic buildings is critical to revitalizing towns and cities across the Commonwealth,” Secretary of Natural Resources Matt Strickler added. “The investments we make through the state rehabilitation tax credit program create jobs, attract new business, and breathe new life into communities. Continuing to make these investments will guarantee that our cultural heritage is a key part of the new Virginia economy.”
First Lady Northam’s remarks were the focal point of this year’s legislative reception hosted by Preservation Virginia—the first statewide nonprofit preservation organization in the nation. The reception convened under the banner of ‘Celebrating the Economics of Historic Preservation’. Fittingly, the reception was held at the Hilton Richmond Downtown, formerly the city’s landmark 20th-century Miller & Rhoads department store, which was re-purposed using state and federal rehabilitation tax credits.
The recently completed study of Virginia’s rehabilitation tax credits adds to a growing number of studies that confirm the centrality of preservation to the long-term economic health and vitality of Virginia, a state renowned for its history.
In 2017, Preservation Virginia released a study, also conducted by VCU, which revealed how historic preservation undergirds Virginia’s heritage tourism, a significant portion of the Virginia economy. The study projected that the $7.7 billion spent per year by heritage tourists, in addition to the $430 million spent by heritage tourism sites for operational expenditures, ripples throughout the economy, adding about $6.5 billion while generating $1.3 billion in taxes.
Preservation Virginia, founded in 1889, is dedicated to perpetuating and revitalizing Virginia’s cultural, architectural and historic heritage. The organization collaborates with the Department of Historic Resources on numerous initiatives and projects.
Find an executive summary of the Wilder School study here.