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STORY
jperty on Magazine Street and plans to apply for the tax credit when the 3f the two-story building, which has two apartments upstairs and two retail ished to look as it did when it was built 70 or 80 years ago, Breaux said.
more than 1,000 building renovations in the program’s history.
While much of the work in the city has been on commercial buildings in the French Quarter and the Central Business District — including the Renaissance Arts Hotel, Hotel Monaco, the Renais-
STAFF FILE PHOTOS
The refurbishment of the American Can building, top, on Orleans Avenue and the Renaissance Arts Hotel on Tchoupitoulas Street, bottom, were helped by a federal program that allows a 20 percent tax credit on the cost of renovations.
sance Pere Marquette Hotel and International House Hotel — mul-tifamily residential projects both large and small have benefited.
Residential buildings that have qualified for the tax credit range from shotguns and cottages like the ones O’Brien rehabilitated, to
massive projects such as the Otis Elevator, American Can, Cotton Mill and Holy Angels buildings.
The tax credit is better than a tax deduction, Hobson said. “A deduction lowers a taxpayer’s taxable income, but a credit lowers his actual tax bill,” Hobson explained.
The 20 percent covers labor, materials and architectural or engineering fees. Simply put, a tax credit on $100,000 worth of renovations would decrease the amount of money the taxpayer owes the IRS by $20,000.
“It certainly changes the way you look at a property,” said Andy Breaux, who used the program in 1997 to refurbish a two-story corner store in the Lower Garden District. The building was turned into two apartments, with the bottom floor maintaining the cor-ner-store look, Breaux said.
Breaux is working on a second project Uptown on Magazine
Street and plans to apply for the tax credit when it is completed. The facade of the two-story building, which has two apartments upstairs and two retail spaces downstairs, is being refurbished to look as it did when it was built 70 or 80 years ago, Breaux said.
What can qualify
Maintaining a building’s historical integrity is one of the program’s many requirements. A building that has deteriorated or has been altered to the point that it has lost its historical recognition is ineligible.
The building also must be certified by the National Park Service as contributing to the historic significance of the district. Generally, this means the building must be more than 50 years old and must add to the district’s sense of historical development.
The building must be in a National Register district, unless it
is on the National Register of Historic Places. Nearly 25 percent of New Orleans falls in a National Register district, Hobson said.
The foremost restriction on the tax credit is that it can be used only for renovations with a commercial aspect. It cannot be used on a single-family house, and if used on an owner-occupied duplex or triplex, it can apply only to the rentals.
Finally, the cost of renovations, which typically run between $33 and $75 per square foot, must equal the purchase price minus the value of the land. If the owner has owned the building for several years, an amount equal to the current depreciated value must be spent on renovations.
In cases where owners are not able to claim the entire 20 percent credit in one year, it can be carried forward 20 years and/or amended back one year, Hobson said.
“It is such a benefit,” O’Brien said. “Anyone contemplating doing a renovation in a historic neighborhood should certainly take advantage of the historic tax credit. It’s been what has made my projects work as a sound financial investment.”
Property owners considering applying for the tax credit can request a copy of the Historic Rehabilitation Tax Credit information booklet by calling (225) 342-8160 or writing: Tax Act Staff, Division of Historic Preservation, EO. Box 44247, Baton Rouge, LA 70804. Additional information also is available at www.crt.state.la.us/crt/ocd/hp/fed hptaxincent.htm.
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SATURDAY, OCTOBER 18, 2003 THE TIMES-PICAYUNE