Tax credit could grow for historic Fort Mill properties

Restoring historic buildings in Fort Mill soon could become more appealing for investors.

Fort Mill Town Council recently gave initial approval to a bolstered tax incentive for historic properties. The move would broaden the number of eligible properties and double the length of the tax break approved in 2011.

“It’s been several years,” said Joe Cronin, planning director. “We haven’t had anyone really take advantage of this tax credit.”

The 2011 ordinance allowed for properties either on the National Register of Historic Places or within a National Register Historic District. An investor putting in 50 percent or more of fair market value could freeze the per-rehabilitation tax rate for up to 10 years. The incentive wouldn’t transfer to a new owner.

“It freezes the value of the building for tax purposes at the value before the rehab,” Cronin said.

Several rehabs have taken place on Main Street in recent years, but none used the tax credit. Many local properties even in historic areas don’t meet all the criteria, or new owners don’t know the incentive is available.

The new proposal doubles the credit to 20 years. Investment of only 20 percent fair market value is required, and the credit would transfer to new property owners within the 20-year duration. Along with existing eligibility rules, any property would meet criteria if it’s eligible for National Register listing, within the Fort Mill Historic Preservation District or simply designated by Council as historically significant for variety of reasons.

Properties do, per the new rules, have to be 50 or more years old.

“We’re looking at maximizing the value of the incentive,” Cronin said.

The tax credit only applies for Fort Mill taxes, but the town has had discussions with the county about adding something similar. In many places, school taxes mirror what the county chooses to do. Informal discussions between the town and school district have occurred.

The ordinance expansion would grow the area of eligible properties perhaps three or four times. The town historic area covers Main Street and the areas of Walter Elijah Park, Clebourne and North White streets, a side of Tom Hall Street and other areas nearby. The total number of downtown properties eligible for the credit would more than double.

The incentive isn’t specific to commercial redevelopment.

“It says ‘property,’ ” said Mayor Guynn Savage. “It doesn’t say business.”

Some historic residences have been lost over the years, she said, where an incentive program like the proposed one could have helped.

“We’re missing some beautiful properties because people couldn’t see the investment and the rehab to make it happen,” Savage said.

Town staff provides information on the current incentive when someone comes in looking to redevelop a historic property. Council asked for an expanded emphasis on communicating the incentive. Councilman James Shirey sees a possible partnership with the local chamber of commerce, given commercial redevelopment is most common.

“They’re at the point of bringing in business to the area,” he said.

Town staff worked with members of the Fort Mill Economic Council on the new proposal. Especially where a new business moves into a historic property, the idea is a more appealing start-up environment will lead to more overall investment in the community, and a more valuable property at the end of the incentive term.

“This is not so much a tax gift to somebody,” said Councilman Larry Huntley, “as it is an incentive to spend money.”

The move still requires second and final reading approval by Council.

This story was originally published April 25, 2016 at 5:41 PM with the headline "Tax credit could grow for historic Fort Mill properties."