Historic tax credits key to Fort Des Moines project
|BY KENT DARR|
A $38 million renovation that has been planned for the last three years at Fort Des Moines will not go forward unless the developers receive $8.2 million in state historic tax credits.
Although the amount of tax credits differs from the Fort Des Moines project, the same might be said of a $25 million renovation of two buildings on Southwest Fifth Street that owners want to become the bicyclist-friendly Harbach Lofts.
State officials wrapped up a round of requests at 11:59 p.m. Feb. 29 for an estimated $10 million available in state historic tax credits. There is not a publicly available tally of the number of projects or the amount requested. Three Des Moines projects, including the Fort Des Moines and Harbach Lofts renovations, have the the backing in spirit and dollars of the Des Moines City Council. Combined, those projects are seeking about $20 million in historic tax credits.
The City Council hurried to pass a resolution Feb. 22 supporting the Harbach Lofts developer’s request for $5.5 million in historic tax credits.
The requests come as state officials are determined to streamline the process and eliminate delays that have resulted in some disgruntled developers in Greater Des Moines and across the state. The Iowa Legislature created changes in the historic tax credit program, including increased oversight by the Iowa Department of Revenue, that have led to delays in the allocation of tax credits for some projects that have been completed and uncertainty for other developers who have projects on the books but who are relying on an initial approval from the state as a trigger for bank loans.
In order to provide some certainty for developers and accountability for taxpayers, the Iowa Department of Cultural Affairs and the Iowa Economic Development Authority have agreed to jointly administer the tax credit program.
IEDA vets and administers a range of economic development tax incentives, but in the past, it has not had any responsibility for historic tax credits, which have fallen under the purview of the Department of Cultural Affairs. IEDA officials have said they planned to monitor the recently completed round of historic tax credit applications to gain an understanding of how the process works, then will work hand in hand with the Department of Cultural Affairs to administer the program.
Much is at stake for developers who take on the renovations of historic properties.
For Blackbird Investments LLC, the group responsible for the Fort Des Moines project, losing out on the current round of funding could mean that it would have to release $18 million in federal historic tax credits and housing tax credits.
Blackbird spokesman Chris Diebel said it would be difficult for the developer to recover from the loss of state historic tax credits and the release of the federal funds, pointing out that new applications would have to be processed and a new hunt for tax credits investors would have to be launched.
Few people question the value of the Blackbird project in terms of restoring a site that has played a key role in the training and deployment of military personnel as well as serving as a trigger for future economic development on the south side of Des Moines.
Sara André, an architectural historian for the State Historic Preservation Office of the Department of Cultural Affairs, noted in an email that Fort Des Moines was designated as a national historic landmark in May 1974, one of 25 such sites in the state that are considered of national significance.
“While originally established in 1901, in 1917 Fort Des Moines became the first Army installation in the nation to train African-American officers to lead troops. But not only was Fort Des Moines the first to train African-American officers; it was also the first training center for the World War II Women’s Auxiliary Army Corps (WAAC)/Women’s Army Corps (WAC),” André said. “At its peak, Fort Des Moines covered over 600 acres and once contained several hundred buildings, including a large parade ground. Rehabilitating the site and adaptively reusing the buildings will ensure that Fort Des Moines will continue to tell the story of this exceptional site.”
The State Historic Preservation Office gets the first shot at vetting applications for state historic tax credits. Office director Steve King said that officials have until April 15 to make a final decision on projects that will qualify for the tax credits.
Meanwhile, to shore up its case, Blackbird Investments is planning a news release for today in which City Councilman Joe Gatto, Des Moines Assistant City Administrator Matt Anderson and state Sen. Matt McCoy all talk about the importance of the Fort Des Moines renovation to south side development.
Blackbird plans a renovation that includes 142 apartments featuring geothermal, 10.6-foot ceilings and 6.5-foot windows, as well as 13 acres of green space and trail systems would connect to Blank Park Zoo, Blank Golf Course, DMACC-Southridge, the Fort Des Moines Museum and Fort Des Moines Conservation Park.
The project would be the largest investment in Des Moines’ south side in approximately 20 years and would generate more than 500 construction jobs over at least one year, according to Blackbird. The Weitz Co. will oversee construction.
Original from Business Record.