The tax reform proposal currently in the U.S. House eliminates a decades-old historic tax credit that has helped transform downtown Davenport by helping to finance most, if not all, of the loft apartment conversions, as well as other projects.
The tax credit "has largely been the reason we've been able to do millions of dollars (worth) of renovation in the downtown," Kyle Carter, executive director of the Downtown Davenport Partnership, said. "This is a critically important program and one we want to see put back in."
Supporters of the credit, including the Quad-Cities Chamber of Commerce and private developers, are mobilizing efforts to keep it, joining other groups nationwide. Removing the credit would doom most efforts to renovate old buildings, they said.
The credit has provided "more than $400 million in direct investment in the downtown," Henry Marquard, the chamber's director of government affairs, said.
And that doesn't count all the shops and restaurants that have cropped up because of that investment, such as Me & Billy restaurant and The Vault spa in the Union Arcade, among many others, he added.
"It (the tax credit) has been tremendously successful. It's really a vital piece for the economy," he said.
In addition, there are more buildings that could be renovated with the help of the credits, including the Kahl/Capitol Theatre, Danceland and Hiberian Hall. "Rehabilitation of these buildings will not be financially feasible without the federal historic tax credit," Davenport Alderman Marion Meginnis, 3rd Ward, said.
Developer Amy Gill said elimination would "change everything for anybody interested in the good of any town, anywhere."
"It's crazy," she said of elimination. "Studies back up the fact that these tax credits work. They provide jobs and renovate downtowns. How do you argue with that? You're paying money out, but you're getting money back."
If federal historic tax credits had not been available, Restoration St. Louis, the company Gill owns with her husband, Amrit, might not have been able to accomplish what they did in Davenport, she said. That includes renovation of the Hotel Blackawk, the Forrest Block, the Renwick Building and, most recently, City Square, the former Parker and Putnam buildings. The Forrest Block might have been torn down, Gill said.
Her company is using Facebook and email to send information out to "all our people to get them energized to call (their Congressional representatives) and to stay on top of this," she said.
Quad-City developer Chris Ales, who also has used federal historic tax credits to accomplish numerous projects, said in an email that "elimination ... would substantially reduce development in this and other areas across the country.
"Many projects are simply not feasible without it, and it is one of a few credits that actually returns 1.2 times its cost. It also stems blight and fosters development that efficiently utilizes existing infrastructure (in lieu of burdening communities with the maintenance of new infrastructure on top of otherwise idle existing infrastructure), while also preserving properties with important cultural values — all in addition to its 1.2 times return on investment!"
That return is according to an economic impact study done by Rutgers University.
The House bill states that elimination of the credit would increase federal revenues by $9.3 billion over 2018-27.
The chamber is sending letters to the Quad-Cities' six-member Congressional delegation — the two senators from each state plus the representatives for the Iowa and Illinois Quad-Cities — "specifically asking them to keep the federal historic tax credit in whatever bill they end up with," Marquard said.
The chamber also is sending educational material to members asking them to call or email their Congressional offices and to encourage people they know to do the same.
Brian Hollenback, president/CEO of Economic Growth, a nonprofit developer based in Rock Island, said that eliminating the tax credit would be a "significant change" in revitalization efforts across the country. He, too, is urging people to contact legislators.
Also sounding the alarm are organizations such as Landmarks Illinois and the National Trust for Historic Preservation.
The tax credit was enacted by the Reagan Administration in 1981.
"The historic tax credit has a four-decade track record of success in saving our nation's historic buildings (more than 40,000), creating more than 2.4 million jobs, and actually generating revenue for the U.S. Treasury, returning $1.20 for every taxpayer dollar spent," the trust said in a written release, citing the Rutgers study.
"President Ronald Reagan praised the historic tax credit as 'economic good sense' by significantly leveraging private sector investment," the trust said.
Meginnis read a proclamation at the Oct. 18 Davenport City Council meeting stating support for the federal historic tax credit as a "vital development tool" and urging Rep. Dave Loebsack, D-Iowa, and Sens. Charles Grassley and Joni Ernst, both Republicans, to fully support the federal historic tax credits.
From "2003 to 2016, the federal housing tax credit invested $37 million in 25 projects in Davenport," the proclamation states. "In addition, the state housing tax credit has invested over $34 million in these projects. Combined, these tax credits have leveraged an additional $225 million of private investment, for a total investment of almost $296 million."
That figure is $104 million less than the $400 million figure quoted by the chamber; Maquard said the chamber number includes projects before 2003, some going back to the mid-1990s, as well as some completed since 2016.
The proclamation introduced by Meginnis also states support for the state historic tax credit that is available to individual homeowners in addition to developers of large properties. There is discussion of changing the state historic tax credit program to lower the annual allocation of credits, Meginnis said.
Marquard and others who support the federal tax credit are concerned that the bill is moving on a fast timetable and could be marked up by Friday, she said.