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What is the Federal Historic Rehabilitation Tax Credit?

What is the Federal Historic Rehabilitation Tax Credit? It provides federal income tax credit for the rehabilitation and re-use of historic, income-producing buildings that are determined by the Secretary of the Interior, through the National Park Service, to be “certified historic structures.” This program has been one of the nation’s most successful community revitalization programs, encouraging private sector investment, creating jobs and preserving our architectural heritage for future generations. Since 1976, the program has generated almost $132 billion in private investment involving nearly 43,000 projects, according to a report by Rutgers University and the National Park Service.

 

We’re pleased to say that this tax credit program survived the tax reform bill, but not without some significant changes: it modifies the 20% Historic Rehabilitation Tax Credit, repeals the 10% tax credit for the rehabilitation of non-historic buildings, and provides transition rules for both credits. These and other changes to the Internal Revenue Code definitely reduce the value of HTC’s and may affect a taxpayer’s ability to use them at all.

 

The 20% tax credit functions like free equity: a developer can use it to offset its federal corporate tax liability or, more often, sells the credits to investors to generate capital for equity. The most impactful change of the bill is to require taking the credit spread over a 5-year period, rather than all at once in the year the project is placed in service. What’s the big deal you ask? Because a dollar today is worth more than a dollar tomorrow, that 5 year stretch reduces the credit’s value by almost 20%. Could a developer think twice about rehabilitating a historic building with this 20% change? Absolutely, because it can leave a big gap in project financing, rendering a once-feasible project infeasible.

 

In Philadelphia alone, you can thank the pre-reform HTC for projects including The Victory Building, The Divine Lorraine, Lit Brothers Building, The Sheridan Building, The Cosmopolitan and Historic Landmarks for Living projects such as The Wireworks condos in Old City. We were able to revitalize 833 Chestnut Street with the help of the HTC and plan to do the same for our Ruby Match Factory project in Camden, NJ. Fortunately, there is a 30-month grace period for historic projects already in the works at the time of the bill’s inaction, so the capital stack for that project wasn’t toppled.

 

Given that many predicted its complete elimination, we are relieved that the HTC still exists. Still, the new bill is not as good as the old one because it made it harder to bridge the equity gap that frequently thwarts rehab and preservation projects. Though historic buildings will still have a chance at a new life, the reduction in the credit’s value will doubtless mean that some preservation projects will not happen. Read a little more about The Historic Tax Credit here.

SEPTA SUBURBAN STATION RETAIL SPACES NOW UNDER NEW MANAGEMENT

Philadelphia-based real estate services company AthenianRazak has assumed the master lease for all retail space owned by the Southeastern Pennsylvania Transportation Authority in its Suburban Station Concourse, the company said in a release on Wednesday.

 

The master lease gives AthenianRazak responsibility for retail tenants at the Center City concourse, which is currently home to 24 shops, including Milkhouse, Dunkin Donuts and Au Bon Pain, according to the release.

Read the full story in Philly.com here.

Sixers Release Construction Update for New Training Complex

The Philadelphia 76ers have revealed the first current construction images and rendering of the completed exterior for their future Training Complex today.  The 125,000-square-foot Training Complex will be the largest in the NBA, and will include the Sixers basketball operations facility and business operations offices.  Designed to foster team building and unity, communication, innovation, and the spirit of competition, the basketball operations facility includes two NBA regulation-size basketball courts, a 2,800-square-foot player locker room, and state-of-the-art performance, wellness, recovery, and hydrotherapy rooms.  The basketball training facility was conceived to be a 24/7 destination for elite NBA and front office talent with amenities including a player restaurant, private balcony, film, and press room.  Construction is progressing as scheduled on the basketball operations facility, estimated to open for player use in the fourth quarter of this year. The business operations offices will include a media production studio, 7,000-square-foot roof deck, 10,000 square feet of mixed-use commercial space, and more.

Continue reading “Sixers Release Construction Update for New Training Complex” »

Montgomery County Moves Forward with “100 Year” Plan

On Thursday, the AthenianRazak team presented the findings of our strategic real estate plan for the County of Montgomery’s Norristown Campus. We were charged with creating a plan that addressed the significant physical deficiencies of the buildings and shaped the County’s investment to support important goals for Campus within the broader Montgomery County community. Specifically, we were asked to “plan for 100 years” and recognize the generational investment contemplated in a plan of this magnitude. Continue reading “Montgomery County Moves Forward with “100 Year” Plan” »

The CRE 2015-16 Top Ten Issues Affecting Real Estate

The Counselors of Real Estate (CRE) recently released their 2015-16 top trends in the real estate industry. This well-regarded list comes out each year, predicting trends for the following year. This year’s list includes a few items that have always been of particular interest to our team including urbanization and demographic shifts. Continue reading “The CRE 2015-16 Top Ten Issues Affecting Real Estate” »

Ruby Match Factory Featured in Curbed Philly

Hot off the presses from Curbed Philly….

“Whenever Jacqueline Buhn talks to a company about moving to Camden, their typical response is this: “Camden?! No way.” Then, she mentions the New Jersey state tax credits that essentially award companies with free rent for 10 years for moving to the city. “Then they say, ‘Wait—how much money?” says Buhn, the principal and CEO of Athenian Razak, a Philadelphia-based real estate company that’s behind the renovation of Camden’s historic Ruby Match Factory at 300 North Delaware Ave.”

Read the full Curbed Philly article here.


Ruby Match Factory Open House a Great Success

Thanks to all who came out yesterday for the Ruby Match Factory Open House. It was wonderful to see so many members of the real estate and design community, along with Camden neighbors and partners. Continue reading “Ruby Match Factory Open House a Great Success” »

Ruby Match Open House is Today

October 15, 6-8pm

This 3rd Thursday Camden ArtCrawl will include:

An Open House at the dramatic Ruby Match Factory, Artist William Butler’s Camden Beautiful exhibition the adjacent ArtBox, Kid’s art from Fresh Artists’ “Silly City Program” with the Rutgers-Camden Office of Civic Engagement “Ignite” program. Continue reading “Ruby Match Open House is Today” »

Ruby Match Factory Part of Upcoming 3rd Thursday Art Crawl in Camden

This October, Camden’s 3rd Thursday ArtCrawl will include a special open house at the Ruby Match Factory.

Join regional history and art fans to see the historic Ruby Match Factory interior before the brick walls, timber trusses and x-braced steel columns are brought to life with new mezzanines, mechanical and electrical systems, to become Camden’s first state-of-the-art loft offices.

WHEN
Thursday October 15th, 6-8 pm

WHERE
The Ruby Match Factory: Delaware and Linden Streets, across the street from Campbell’s Field

More information on Camden’s 3rd Thursday Artcrawl.

 

Welcome Neighbors – Liberty Property Trust to Announce Development Complex on Camden Waterfront

Rendering shows a view from Philadelphia of a proposed Liberty Property Trust mixed-use development on the Camden waterfront. (Volley for Robert A.M. Stern Architects)

According to The Philadelphia Inquirer, Liberty Property Trust today announced plans to build a “complex of offices, apartments, retail stores, and a hotel on a stretch of Camden’s waterfront…”The article goes on to state, “The project will include 1.5 million square feet of office space and more than 200 residential units…” Continue reading “Welcome Neighbors – Liberty Property Trust to Announce Development Complex on Camden Waterfront” »