Birmingham leaders push to renew historic tax credit as redevelopment projects soar
A quick look around downtown Birmingham will show some pretty phenomenal architecture. It's part of the fiber of the city's past. It also can be part of the formula to its future.
Developers pumping new life into downtown's historic buildings attribute their success to Alabama's historic tax credit. For three years, developers in Birmingham could apply for the historic tax credit, which expires this year. Now, there's a major push from Birmingham leaders for the state legislature to renew the credit.
Bayer Properties' David Silverstein is using Alabama's historic tax credit to renovate the Pizitz building, which has sat vacant since the early 80's. He says the credit is making the Pizitz project possible.
"It has a beautiful terracitta façade with architectural elements that you normally don't see on a building and our goal was not to tear it down. Our goal was to preserve it," Silverstein told ABC 33/40.
Pizitz will open in October, with multifamily housing on top floors and retail and restaurants on the bottom.
It is one of 20 projects in Birmingham that have utilized the credit and one of 52 projects statewide.
"It is more complicated and more expensive to do a development of a historic structure," said Silverstein. "These projects that are in the urban areas, that are historic of nature really need the incentives to make them become reality. Look, we had to spend $70 million to achieve the credits. So, you don't just get the credits without spending the money."
For each of the three years, the state allowed $20 million in credits. In Birmingham, the credit has been used on projects like the Florentine Building and the Lyric Theater.
David Flemming, Executive Director of REV Birmingham, is urging lawmakers to renew the credit.
"It's a game changer for downtown and we're not done," said Flemming. "These are great projects that are going to inspire a lot more activity and vibrancy in downtown, but we need to also move out of downtown and we need this incentive to be around to keep the projects going downtown, but also throughout this historic city."
Flemming expects development to slow down in Birmingham if the credit is not renewed.
"Without this additional incentive, there's a potential that we could lose more of our historic fabric which people say over and over is one of the greatest assets of downtown Birmingham," said Flemming.
"$327 million statewide is being invested directly into projects and the state is only spending 60 million to get 327, so I think it's a great return," added Flemming.
Flemming tells ABC 33/40 developers are already lined up with projects hoping the tax credit is renewed.
One example would be phase two of the Pizitz Project. Bayer Properties would like to redevelop the adjacent building with office and retail space.
The decision on whether to renew the credit will be up to the state legislature when members return to Montgomery in February.
The Jefferson County delegation is on board with the plan. Senator Jabo Waggoner (R- Vestavia Hills) tells ABC 33/40 he plans to sponsor the bill in the Senate this year and he hopes he can get it passed.
Last year, the bill cleared the House but stalled in the Senate Education Trust Fund Committee. Senate ETF Committee Chairman Arthur Orr tells ABC 33/40 he does have some concerns about the credit. Orr says he's concerned about the credit being used to restore a parking garage in Birmingham. He adds that an economic impact study is being done now to aid lawmakers in the debate.