Historic Preservation Tax Exemption Program Public Meeting of the proposed changes to the Historic Tax Exemption Program

Purpose Review the proposed amendments to the current Historic Preservation Tax Exemption Program  Division 51A-11 of the Dallas Development Code  Program sunsets December 31, 2015  Minor amendments clarify, improve and extend the program in order to more effectively accomplish the goals of the program

History The Historic Preservation Incentive Program (ordinance #21874) was passed by the city council in October of 1993 Amended in April of 1998 Amended in April 2001 Amended in April 2004 Amended in November 2007 Sunsets in December of 2015

Existing Historic Preservation Tax Exemption Program Historic buildings are Dallas’ link with the past. They connect us to our heritage and enrich the quality of life. They help give a community a sense of identity, stability and orientation. These exemptions reward private investment in rehabilitating historic properties.

Existing Historic Preservation Tax Exemption Program The rehabilitated buildings provide needed housing (in many cases, low- and moderate-income housing), and office, retail, and other commercial space. The communities benefit from property improvement, blight removal, and increased occupancy of buildings in historic core neighborhoods.

Existing Historic Preservation Tax Exemption Program Goals of the Historic Preservation Tax Exemption Program are to:  Revitalize older neighborhoods to build and capture a stable tax base.  Support the private sector investment in historic properties.  Encourage home ownership.  Promote pedestrian oriented, ground floor retail in the Urban Historic Districts.  Support new uses for vacant and deteriorated historic buildings.  Encourage low and moderate income families to invest in Revitalizing Historic Districts.

Eligibility To be eligible for the program, a building must be a contributing or a potentially contributing historic structure in a City of Dallas district or individually listed.

Schedule Landmark Commission public hearing If greater than $50,000 schedule a City Council hearing Begin the project and save the receipts! Historic Preservation Tax Exemption Process Step 1 Application Applicant completes The project Applicant provides proof of expenditures, and additional required information to staff Applicant files Commitment to Repay on the property deed Staff and legal review of the documentation City receives a copy Of the filed documentation Letter of Verification Sent to DCAD City annually verifies the property meets the requirements of the ordinance Step 3 Exemption Applicant must annually submit their renewal application to DCAD Step 2 Verification

Historic Preservation Tax Exemption Program The location of the structure and the amount of expenditures being spent determine how much will be exempt. Types of Exemptions  Exemption on the added value of the city portion of the property taxes  Exemption of 100% of the city portion of the property taxes

Historic Preservation Tax Exemption Program In total there are about 96 historic properties receiving exemptions in the program. The total value of the exemptions for 2014 was $205,932,688

Types of Exemptions Offered Existing and Proposed Programs

Existing Historic Preservation Tax Exemption Program Currently there are three categories of exemptions available  Urban Neighborhoods Map to follow this slide  Revitalizing Neighborhoods Junius Heights, Lakecliff, Peak’s Suburban, South Blvd/ Park Row, 10 th St, Wheatley Place, and Winnetka Heights  Citywide All properties not in the Urban or Revitalizing Neighborhoods Munger Place, State Thomas, and Swiss Avenue historic districts

Urban Historic Districts

Existing Historic PreservationTax Exemption Program Urban Historic Districts Type of ExemptionRequired Expenditures AmountDurationRenewable Based on Rehab75%100%10 yearsYes Based on Rehab50%Added Value 10 YearsYes Residential / ground floor conversion 50% must be converted to residential and 65% of ground floor must be converted to retail 100%5 YearsNo Exemptions may be renewed if additional expenditures meet the threshold for rehabilitation. This is to encourage the continued rehabilitation and use of our historic properties.

Proposed Changes to the Existing Program Only change will increase the length of the exemption from 10 to 15 years (Based on Rehab) and from 5 to 10 years for the Residential/Ground floor conversion.

Urban Neighborhood Properties SoCo Urban Lofts (Santa Fe Building)Republic Tower Titche Building

Urban Neighborhood Properties Awalt Building Davis BuildingSouthside on Lamar

Revitalizing Historic Districts

The Revitalizing Neighborhoods include: Junius Heights, Lake Cliff, Peak’s Suburban, South Blvd/ Park Row, and Winnetka Heights.

Existing Historic Preservation Tax Exemption Program Revitalizing Historic Districts Type of ExemptionRequired Expenditures AmountDurationRenewable Based on Rehab25%100%10 YearsYes Maintenance3%Added Value 3 YearsYes Exemptions may be renewed if additional expenditures meet the threshold for rehabilitation. This is to encourage the continued rehabilitation and use of our historic properties.

Proposed Changes to the Existing Program Only change will increase the length of the exemption from 10 to 15 years (Based on Rehab) and from 3 to 8 years for the Maintenance.

Citywide Historic Districts

The Citywide Neighborhoods include: Munger Place, State Thomas, and Swiss Avenue. Typically these are considered districts that are stable or near stabilization. The Citywide category covers all properties outside the Urban and Revitalizing Historic Districts.

Existing Historic Preservation Tax Exemption Program Citywide Type of ExemptionRequired Expenditures AmountDurationRenewable Based on Rehab50%Added Value 10 yearsYes Rehab of an Endangered Structure 25%100%10 yearsYes Exemptions may be renewed if additional expenditures meet the threshold for rehabilitation. This is to encourage the continued rehabilitation and use of our historic properties.

Proposed Changes to the Existing Program Created a new category of exemption: Endangered Districts.  This provision is intended for structures deteriorating within our least stable historic districts.  Would allow a 100% exemption for 25% expenditures on the property  Increase the length of the exemption from 10 to 15 years for every type of exemption in this category.

Endangered Districts The Endangered Districts would include: 10th St and Wheatley Place. The exemption would remain the same as the ‘Revitalizing Neighborhoods’, with the ‘Endangered’ listed meant to provide emphasis that these neighborhoods need more focus to reach stability and redevelopment.

Other Exemptions Offered

Existing Historic Preservation Tax Exemption Program Other Incentives Non-Profit Must be a Recorded Texas Landmarks that operates a not-for-profit that is open to the public. Receives a 100% exemption on the city portion of the property taxes for long as long as it remains a not-for profit open to the public Conservation Easement Transfer of Development Rights

Proposed Changes to the Existing Program Other incentives  No changes to the not-for-profit, conservation easement or transfer of development rights programs

Overview of Proposed Incentives Program CategoryTypeRequired ExpendituresAmountDurationRenewable Urban Neighborhood Based on Rehab75%100%15 yearsYes Based on Rehab50%Added Value15 yearsYes Residential / ground floor conversion 50% must be converted to residential and 65% of ground floor must be converted to retail 100%10 yearsNo Revitalizing Historic Districts Based on Rehab25%100%15 yearsYes Maintenance3%Added Value8 yearsYes “Citywide” Based on Rehab50%Added Value15 yearsYes Endangered Property and Districts 25%100%15 yearsYes Non-profit Be a not-for-profit with a designated historic landmark that is open to the public 100% As long as the building remains a not-for- profit that is open to the public Annually Conservation Easement Transfer of Development Rights

Proposed Timeline August/September - Landmark Commission Public Hearing September/October (tentative) – Any applicable Council Committees November (tentative) – City Council Hearing

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