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Historic properties counting on GO Zone incentives extension

New construction and development are not the only structures benefiting from Gulf Opportunity Zone (GO Zone) Act legislation as rebuilding continues in areas damaged by Hurricane Katrina. Historical properties are using the 26% tax break as an incentive to restore buildings in a number of Mississippi towns. An extension of the act — helping new and historical properties — is being wrangled in the U.S. Congress for the most severely affected counties. An extension will give property owners more time to begin work.

‘Absolutely critical’

“Eliminating the current construction start date is absolutely critical to the continued and long-term economic rebuilding efforts on the Mississippi Gulf Coast,” says Brian W. Sanderson, president of the Gulf Coast Business Council. “Many factors have prevented major projects and rebuilding efforts from breaking ground before now but chief among them are insurance, environmental regulations, zoning requirements and funding contingencies.”

With few surviving historical properties on the Coast, all breaks are welcomed for restoring them. Some examples are the former Veterans Administration beachfront property in Gulfport; the Gulf Park Campus of the University of Southern Mississippi in Long Beach; and the White House Hotel in Biloxi. These and other properties, if restored, will be used and enjoyed by Mississippians for generations.

“All three historic buildings and Elizabeth Hall need major renovations, especially to the first floors which were gutted, although all are structurally sound and most upper floors need cosmetic work,” says urban planner Ann Daigle who is working with USM to repair the Gulf Park Campus. “Because USM is a public entity they can’t take advantage of GO Zone incentives. However, if a private developer were to do the renovations, they could apply for and combine a mix of financial incentives, including historic preservation tax credits.”

Ironic catalyst

Lolly Barnes is working with owner Jim Love to restore the landmark White House Hotel to its glory days of the 1940s. He has been trying to bring the historic structure back to life for about 20 years and Barnes shares that dream. Many state residents have happy memories of vacationing there and many more will if the restoration is successful. Located on Beach Boulevard, the sturdy building came through Hurricane Katrina like a champ.

“The irony of Hurricane Katrina is that it took away many of our historic buildings, but it has been the catalyst for implementing a restoration strategy for the White House,” Barnes said. “I see it as something for the people of the community to be hopeful about and proud. We want to make it a community gathering place where residents can build new memories.”

She wants to see the Mississippi and Louisiana congressional delegations get behind the extension of the construction start date and the continuation of the 26% tax break for historical properties.

“This needs to be put on the front burner because these are the kind of projects that are key to what the Governor’s Commission envisioned for our area in the wake of Katrina,” she said. “We need to put a face on these projects, making them real and making ourselves heard.”

Sue Wright, economic development director for the City of Gulfport, says the tax credits will factor as an important consideration in the bottom-line success of the VA development project as well as other historic properties along the Coast. The 92-acre site was given to the city by the federal government. Historic stucco and red-tile roof buildings were saved during demolition of other buildings on the site.

“The VA site is nearing completion of a massive cleanup and we anticipate readiness for development by the end of the year — just as qualification for this GO Zone benefit ends!” she said. “This is just one example of how important the extension is to the recovery and revitalization of the Gulf Coast.”

She and Barnes point out that extending the GO Zones’ 26% tax credit for historic properties versus reverting to the regular 20% can mean two or three million to eligible projects, not a trifling amount.

“This could fill a significant portion of a financing gap and in today’s lending environment mean the difference in a bank’s decision,” Wright said. “The full potential of this magnificent site with its ancient oaks and campus feel is important to the city and will make a valuable contribution to the entire Gulf region.”

The site has undergone several planning forums including the recent master plan developed by Andres Duany and his well-known architectural and town planning firm DPZ.

The Aubert Motor Car Company, completed in 1928 in downtown Gulfport, is being restored by the law firm of Vaughn, Bowden and Wooten. The first floor, which will house law offices, will be finished in eight to ten weeks. The second level will likely have a combination of apartments and offices.

“The 26% tax credit is very important,” said attorney Eric Wooten. “It is a significant incentive. The building has some great architectural features that we’re saving and it’s going to be beautiful.”

Once restoration is completed and approved by the Mississippi Department of Archives and History, the Aubert Building is expected to be placed on the National Register of Historic Places.

Around Jackson

Restoration and construction in Jackson will not be affected by an extension of GO Zone incentives, but the act’s original provisions have been helpful in reviving old structures such as the old public library building on State Street. Realtor and developer Ted Duckworth says he will make the impending deadline but it will be close.

“The credits have helped, but I think the extension should apply to projects already begun in areas outside the coastal counties,” he said. “I would love to see the deadline extended for historical properties in all counties.”

He’s working closely with Archives and History on the project, which will have mixed use that includes apar

Contact MBJ contributing writer Lynn Lofton at llofton656@aol.com.tments.


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