Things are moving quickly for proposed legislation that could act as a significant boost for Warfield and other large-scale historic preservation projects. Senate Bill 885, a potentially game-changing bill that proposes a tax credit for catalytic revitalization projects like Warfield, will be in front of Maryland’s Senate Budget and Tax Committee at 1 p.m. on Wednesday, March 3, 2021. Here are some main points of the bill, how the tax credit will benefit Sykesville, the Warfield project, the surrounding community, and the state, and how you as a citizen can get involved right now to give this bill the public support it needs to move forward in the legislative process.
Senate Bill 885: Income Tax Credit for Catalytic Revitalization Projects
This bill was introduced by Senator Katie Fry Hester on February 9, 2021. The purpose of the bill is to allow the owners of qualified properties to claim a credit against state income taxes for certain rehabilitation costs and other construction costs for projects in the State of Maryland identified as “catalytic.”
According to the bill, a catalytic project must:
- Be located in the State of Maryland;
- Be presently or formerly owned by the State of Maryland or the federal government;
- Foster economic, housing, and community development within the immediately surrounding communities if developed;
- Have been previously used as a college or university, K-12 school, hospital, mental health facility, or military facility or installation.
The tax credit would be in the amount of 20% of eligible costs up to a maximum of $15 million. Warfield would be able to make full use of this tax credit in rehabilitating the remaining vacant historic buildings located in Parcel D, which contains all of the project’s historic structures.
You can read the full text of the current draft of the bill here.
What This Bill Means for Warfield, the Sykesville Community, and the State of Maryland
Most large-scale historic preservation projects like Warfield require multiple government incentive programs to achieve financial viability because the cost to preserve and rehabilitate historic structures far exceeds the cost of new construction. Federal and state historic tax credit programs typically play an essential role in bridging this gap.
The Warfield team has worked hard with Senator Hester, the Department of Planning, and the Department of Housing and Community Development on this bill because the existing Maryland Historic Preservation Tax Credit program falls woefully short of what is needed to support the redevelopment of Warfield and similar large historic complexes in Maryland. Current program caps currently stand at $9 million annually and $3 million per project (compared to $100 million in Virginia and even unlimited funding in several states).
All of this said, this bill is not just about saving and preserving cultural resources— it’s also about economic stimulus. When states invest in historic preservation tax credit programs, the result is community revitalization and economic development that pays for the tax credits many times over. Ethan Reed of Real Property Research Group estimates that each $1 of tax credits invested yields the state $8.13 in total economic output. He also indicates that job creation is significant, with 49.2 jobs created during the construction period throughout Maryland for each $1 million investment by the state.
If Senate Bill 885 is successful, Warfield would likely be the first project approved for the new catalytic tax credit given that the Warfield team has been at the forefront of the effort to champion this program. It is also important to recognize the positive impact that the tax credit proposed in this bill could have a huge impact in saving Warfield and several other historic campuses around the state and spurring economic development in the communities in which these complexes are located.
How You Can Get Involved
Public support for Senate Bill 885 is essential and we strongly encourage all members of the community to get involved as soon as possible ahead of the March 3rd hearing date. IF YOU WANT TO LEARN MORE AND HELP, please contact Steve McCleaf as soon as possible but no later than March 1, 2021.
Lastly, please sign up for updates on our website and to follow us on Twitter and Facebook for all the latest updates, as well as information on how to watch the testimony live as it happens. We will be posting links to the livestream on our social channels.