A number of stakeholders offer inducements to both existing property owners and prospective investors in the downtown commercial district. The intent of these resources is to enhance overall economic development within the district and to strengthen the destination significance of the downtown area.
Property Tax Abatement & Reinvestment Tax Credit
Property owners in the Downtown Revitalization District may apply for a dollar-for-dollar city and county property tax refund equal to the amount of investment for construction, reconstruction, alteration, or repair completed within a calendar year, plus a five-year tax freeze on any increase in city and county ad valorem taxes resulting from such work.
Check out the city / county downtown incentives guidelines (PDF).
Low Interest Loan Program
Four participating financial institutions have created a loan pool of $1 million. Below-prime loans of up to $100,000 are granted to qualified borrowers for a period up to 10 years. Funds are limited to infrastructure improvements and exterior work. A building improvement plan must be approved by the Main Street Design Review Committee, and loan applications are subject to the normal credit review processes of the participating financial institutions.
Low-cost materials are available through Owen Hardware and Guardian Glass, and free architectural design services are offered by the Texas Historical Commission.
State Historic Tax Credit
On June 14, 2013 Gov. Rick Perry signed a law that provides a tax credit equal to 25 percent of eligible costs and expenses incurred in a certified rehabilitation that totals more than $5,000. The tax credit may be applied against franchise tax obligations beginning Jan. 1, 2015. State historic tax credits can be transferred multiple times. Entities can also use the tax credits a little at a time—unused credits can be carried forward on up to five consecutive franchise tax reports.
Certified historic structures include landmarks listed individually in the National Register of Historic Places, recorded Texas Historic Landmarks, state archeological landmarks, or properties that contribute to historic districts.
The Texas Historical Commission and the Texas Comptroller of Public Accounts will adopt the rules necessary to implement the new credit. Entities that pay Texas franchise taxes can claim the credit by first applying to the Historical Commission to certify their rehabilitation. The entity may then present their Historic Commission certificate to the comptroller along with an audited cost report on the rehab. A state sales tax exemption on labor is also available for work to buildings listed in the National Register of Historic Places.
Federal Preservation Historic Tax Credits
Administered by the National Park Service in conjunction with State Historic Preservation Offices (SHPO), the Federal Historic Preservation Tax Incentives program offers a 20% federal tax credit for qualified rehabilitation expenses. Thousands of property owners across the country have already utilized these tax incentives to rehabilitate historic commercial buildings and similar properties. It should be noted that these tax credits can be sold to provide equity capital to a project.
View or download an introduction to federal tax credits for rehabilitating historic buildings (PDF).