---

Governor Kaine Highlights Virginia's #2 Ranking in Rehabilitation of Historic Buildings
– Federal, state tax incentives promote historic preservation –

RICHMOND – Governor Timothy M. Kaine today announced that the National Park Service has ranked Virginia second among the 50 states in the use of federal tax incentives to rehabilitate historic buildings. The National Park Service’s annual report on fiscal year 2005 lists Virginia with 140 approved proposals and 74 completed projects, second only to Missouri in both categories. May is National Preservation Month.

State and federal rehabilitation tax credits can be combined to leverage 45% of eligible expenses, making multi-million dollar projects possible across Virginia. In fact, the total private investment in Virginia leveraged through rehabilitation projects completed and certified by the Park Service during fiscal year 2005 was $128,603,161, making Virginia seventh in the nation for money spent.  The average expense per completed project was $1,737,880. 

“The Commonwealth’s ranking highlights the power of historic preservation as an economic and community revitalization tool,” Governor Kaine said. “Historic rehabilitation through public-private partnerships, combined with state and federal tax credits, has the added benefit of supporting smart growth and helping to stem sprawl in our urban and suburban areas throughout Virginia.”          

The National Park Service report notes that Virginia is among those “states with the greatest increase in planned activity,” which reflects the growing attraction of the combined tax-incentives rehab programs among Virginia’s developers and business leaders.

Since the federal program began in 1976, more than 1,700 deteriorated historically significant buildings in Virginia have been returned to productive service, representing a private investment of $1.17 billion. The parallel state program was initiated in 1997, and has already been used with 330 projects generating over $159 million of economic activity independent of the federal program.

In addition to Virginia’s statewide ranking, the National Park Service has informed the Department of Historic Resources that the City of Richmond is second only to St. Louis, Missouri, of all cities in the nation for the number of rehabilitation tax projects using federal tax credits during the past five years.

“Historic preservation provides sound and sustainable economic growth and development,” said Kathleen S. Kilpatrick, Director of the Virginia Department of Historic Resources, which administers the programs. “We have a model program for the nation, and the results of the state and federal tax incentives can be seen in communities across Virginia as we work to promote the recycling of historic buildings for residential and re-adaptive commercial use.”

As a public investment, tax credits are largely a self-funded program since revenue generated by tax-credit projects offset the state’s initial investment, Kilpatrick said. For instance, these projects boost state revenue from taxes on wages generated by new jobs and on sales of goods and services and increase local revenues by taxes on increased values on real estate.

Historic rehabilitation also increases heritage tourism. Tourists interested in visiting historic sites typically spend an average of 2.5 times more money and stay longer in the state than other travelers.

For more information on state tax incentives available for the rehabilitation of historic buildings, visit the Dep't of Historic Resources Web site.

# # #