historic preservation

Financial Incentives

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Historic Rehabilitation and Repair Loan Program

The Historic Rehabilitation and Repair Loan Program (HRRLP) is designed to encourage the rehabilitation, preservation and adaptive reuse of commercial and retail buildings that are listed on the Tacoma Register of Historic Places. This program provides gap financing, which is used in combination with the borrower's other financial resources. In all cases, borrowers must demonstrate the ability to repay the loan and provide sufficient security.

How It Works

The HRRLP is administered by the Tacoma Community Redevelopment Authority (TCRA) and staffed by the City Community and Economic Development (CEDD).
Loans are made available on a reimbursement basis up to 50% of the approved project costs. The minimum loan amount is $20,000 with a maximum loan amount of $100,000. Loans carry an interest rate equal to the 10-Year U.S. Treasury Note plus 100 basis points (1%) with principal and interest payments due monthly for a maximum term of 10 years.

Requirements

  • Building must be a commercial or mixed use building that is listed on the Tacoma Register of Historic Places

  • Business tenants must have a lease term equal to the proposed loan term, and must have owner consent

  • Work must be approved by the Historic Preservation Officer

For the loan fact sheet, click here.  For more information, contact Jacinda Howard at (253) 591-5221 or jhoward@cityoftacoma.org.

Special Tax Valuation-a local program

Through the Special Tax Valuation Program, property owners who complete a substantial rehabilitation within a period of two years may benefit from reduced property taxes for a period of ten years.

How It Works

Generally, qualified expenses associated with a rehabilitation project that meet the requirements below are subtracted from the property assessment each year for 10 years. Property taxes are still paid on the balance, although in some cases a substantial rehabilitation project's costs may exceed the assessed value of the property for several years, effectively negating property taxes.

This "special valuation" of the property offsets potential increase in taxes caused by building improvements and helps owners regain their investment efficiently. Special Valuation may be applied for repeatedly as long as the requirements are met and the qualified expenditures do not exceed the assessed value of the property.

Requirements

Expenses claimed must be reasonably associated with the historic rehabilitation and must occur within a building's original envelope. Additional requirements include:

  • Property must be listed on the Tacoma Register of Historic Places
  • Rehabilitation costs must equal at least 25% of the assessed value of the building itself prior to renovation
  • All project costs must fall within a working period of 24 consecutive months
  • "Rehabilitation Expenditures" that generally qualify include the costs associated with design, materials and construction necessary to bring a building to a state of modern convenience, but do not include costs associated with acquisition of the property or for work to expand the building's size
  • The project must meet the Secretary of Interior's Standards for Rehabilitation of Historic Buildings
  • Renovations must not adversely affect historically significant building's character defining elements

Buildings in historic districts are usually eligible. Historic properties not already listed on the Tacoma Register of Historic Places can be placed on the Tacoma Register though a nomination and review procedure.

For application forms and other helpful documents, please visit the column to the right.

Federal Historic Rehabilitation Tax Credit Program (HRTC)

The Historic Rehabilitation Tax Credit Program is a one-time federal income tax credit for the costs associated with rehabilitation of historic buildings, jointly administered by the National Park Service and the IRS. The most commonly used tax credit is the 20% credit for income producing properties.

This program is jointly administered by the National Park Service and the Internal Revenue Service. The Washington State Department of Archaeology and Historic Preservation (DAHP) coordinates projects using the Federal HRTC.

Basic requirements include:

  • Property must be listed on the National Register of Historic Places
  • Property must be a building
  • The rehabilitation must meet the Secretary of the Interior's Standards for the Rehabilitation of Historic Properties and the design must be approved by the National Park Service in advance
  • Property must be depreciable--that is, an income producing property (and therefore not the applicant's primary residence)

For more information (outside links):
20% Rehabilitation Tax Credit (National Park Service)
Washington State Department of Archaeology and Historic Preservation--Financial Assistance

Please also visit the Related Sites page for more online information.