Preservationists are hoping Ford Motor Co.'s potential rehabilitation of the long-vacant Michigan Central Station will win over Gov. Rick Snyder to bring back the tax credit for restoring historic buildings that he axed in 2011.
Legislation resurrecting Michigan's historic preservation tax credit cleared the House Tax Policy Committee on Wednesday after legislators capped the annual amount of credits that could be awarded at $15 million.
"We knew that Snyder was not in love with this so House leadership suggested we put some caps in place to rein in the scope," said Dan Austin, a Detroit historian and spokesman for a coalition of preservationists backing the legislation.
Senate Bill 469 would restore the tax credit Michigan previously had on the books that subsidized up to 25 percent of the costs of rehabilitating historic buildings and homes.
"The place where that might come in handy is if an automaker wanted to renovate an old train station in Detroit," said Austin, who represents the MI Impact Coalition.
Snyder got rid of the tax credit in 2011 as part of a sweeping overhaul of the state's tax code that included the elimination of other popular credits and tax breaks, such as an exemption on pension income.
The Republican governor, who leaves office at year's end, has no position yet on SB469, spokeswoman Anna Heaton said Wednesday.
"Generally, I am not a tax credit fan, they have to be very limited in nature," Snyder said in a statement to Crain's. "So I will have to look carefully at this particular credit before being supportive of it."
Under the legislation, a commercial building on the National Register of Historic Places would have to get the first 20 percent of credit through the federal historic preservation tax credit and the remaining 5 percent could come from the state.
The amended bill would require at least $2 million of the $15 million in annual tax credits to go toward the preservation of historic, owner-occupied homes, Austin said.
Austin said the credit could be vital to financing the restoration of the 105-year-old Michigan Central Station, which has sat vacant since Amtrak stopped running trains through Detroit's depot in January 1988.
Ford Motor Co. has not officially confirmed its plans for the train station.
But an entity linked to the Dearborn automaker became the official owner of the train station last month in a transaction with Crown Enterprises Inc., the Warren-based real estate development arm of the Moroun family of companies.
Another entity linked to Ford also purchased the former Detroit Public Schools book depository building from the Morouns, which sits adjacent to the train station along 14th Street.
Ford is expected to formally announce its plans for an expanded presence in Corktown later this month, igniting buzz in the construction industry about the possibility of hundreds of millions of dollars in preservation work in the years to come.
Spokespersons for Ford did not return a message Wednesday seeking comment on whether the automaker had a position on the legislation.
The proposed historic preservation tax credits would be transferable, meaning developers could sell the credits to an investor to secure financing for projects. The investor can then use the tax credits to lower their tax liability through either the 4.25 percent individual income tax or Michigan's 6 percent corporate income tax.
The previous historic preservation credit was on the books from 1999 through 2011 and, most notably, was utilized in the restoration of Detroit's Book Cadillac hotel, Austin said.
The legislation, sponsored by state Sen. Wayne Schmidt of Traverse City, sailed through the state Senate on a 36-2 vote in December. The House Tax Policy Committee passed the bill Wednesday on a vote of 8-2.
The MI Impact Coalition is backed by the Michigan Historic Preservation Network.
Historic building preservationists in the MI Impact Coalition include Midtown Detroit Inc. Executive Director Sue Mosey; The Christman Company's Ronald Staley; and Detroit real estate developers Dietrich Knoer of The Platform; Ron Castellano of the Herman Kiefer Development LLC; and Kathy Makino and Shannon Morgan of Shelborne Development.
The Michigan Municipal League, which lobbies for cities, also is a member of the coalition.
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