ATLANTA — Questions raised Monday by the Senate Finance Committee about costs delayed a vote on legislation that would enhance tax credits for developers who renovate historic buildings.
Committee members were chiefly concerned about the how much tax revenue the state would be giving up by allowing developers to sell credits they can’t use. Current law only allows the actual developer to apply the credits against income tax owed to the state.
A committee vote on House Bill 308 will be postponed a day or so until the committee can conduct a full hearing with expert witnesses and members of the public, Chairman Judson Hill said.
The bill would increase from $300,000 to $5 million the amount of credits available for any individual project, and it would allow the sales of credits.
Sen. Bill Cowsert, R-Athens, said, “If you make no income when you develop the property and then sell the credits, I would imagine that’s a humongous hit” to the state budget.
Rep. Ron Stephens, the sponsor of the bill, said it caps the total available credits from the state at $25 million yearly, allocating them to developers until they run out. That limit caps the budget impact, he said, and the benefits in jobs outweigh the cost.
Sen. Lester Jackson, a Savannah Democrat who sits on the committee, said the credits will fuel a key industry in his region.
“A major economic force in coastal Georgia is tourism, and I agree there is value in historical sites,” he said. “This will play a role to revitalize, not just downtown, but the whole region and should serve to spur in helping our future marketing.”
A project that Stephens, Jackson and other Savannah lawmakers point to in support of the bill is the conversion of the former Savannah Electric Power Co. generation plant into a luxury hotel, and its developer, Richard Kessler, testified in favor of the legislation before a House committee.
Other projects will also benefit, according to Mark McDonald, president of the Georgia Trust for Historic Preservation, which spent two years calling for enhanced tax credits before Kessler announced his plans.
“We’re actually losing investors to other state for these large projects that have such a major impact,” McDonald said, adding that surrounding states have no limit on available credits.
He pointed to Southern Mill in Athens, the Maple Street Mansion in Carrollton and the Clermont Hotel in Atlanta as others in the pipeline. Such projects are labor intensive, creating 14 jobs for every $1 million invested, which is a bigger impact than manufacturing’s tax breaks, McDonald said.
“This bill really is a job creator,” he said.
The ability to sell the credits is important to bringing enough money to tackle major projects because investors demand it, according to McDonald.
Hill remains skeptical.
“It’s the return on investment we’re struggling with,” he said.