Wednesday, May 2, 2012

Credit worthy: Developers to receive $16M in tax credits to renovate facilities

Premium content from Boston Business Journal by Brendan Lynch, Special to the Journal

Date: Friday, April 27, 2012, 6:00am EDT 

Photo of Noah Maslan, by W. Marc Bernsau, Boston Business Journal  

“It’s a critical resource,” said Noah Maslan, real estate director at Urban Edge, which secured $400,000 worth of credits and is eligible for another $400,000 in the next round. The organization will sell the credits to finance restoration of the Coleman-Webb Building in Jackson Square in Boston.

“Without the credit, it would have maybe made more sense to tear the building down,” he said.
Under the program, a commercial property can receive state income tax credits worth 20 percent of its rehabilitation cost, which the property owner can use or sell to leverage cash for construction. To qualify, the building must be listed on or eligible for the National Register of Historic Places, or designated as historic by the MHC. The pilot program, which expires in 2017, is capped at $50 million annually. Since its inception in 2004, $79.8 million worth of credits have been awarded.

Urban Edge’s renovation of the three-story Coleman-Webb Building is part of the $20 million Jackson Commons project, which also includes a four-story, connected building. The development will feature 37 mixed-income apartments as well as 11,000 square feet of office and retail. The 106-year-old building was home to the F.W. Webb Manufacturing Co. for 40 years and is now Urban Edge headquarters. A groundbreaking is expected next year.

Historic Boston won a second $300,000 round of state credits, which it will combine with $955,000 in federal historic tax credits to refurbish the vacant Hayden Building on lower Washington Street in Downtown Crossing. The building dates to 1885.

The nonprofit has spent $1 million to buy and stabilize the dilapidated building — the former location of an adult movie theater in the Combat Zone. Historic Boston will set up a for-profit subsidiary to own the property.

Work recently began on the $5.3 million project renovating the five, 1,000-square-foot floors. Historic Boston will remain as landlord. Historic Boston is aiming for an early 2013 completion. “Historic tax credits are very valuable because they often accept preservation projects that would be hard to do financially because they are sometimes not profitable,” said Historic Boston Executive Director Kathy Kottaridis.

In Fort Point, Commonwealth Ventures has secured $200,000 in the most recent round for 5 Channel Center. The 50,000-square-foot space will house the Fraunhofer Center for Sustainable Energy Systems, which will be moving to Fort Point from Cambridge later this year.

Commonwealth Ventures President Richard Galvin said the company has raised between $1.2 million and $1.5 million in state historic tax credits and $4 million in federal historic credits for the $22 million renovation.


“It’s part of the Boston Wharf portfolio, and it’s within the Fort Point historical district,” said Galvin, referring to the Hub’s 55-acre Fort Point Channel Landmark District, which features 95 buildings built between the 1880s and 1930s by the Boston Wharf Co.

Galvin said the building is expected to be complete by year’s end and is being converted to “almost a live-in lab.” Fraunhofer will use the building to conduct energy research aimed at finding ways to keep buildings like 5 Channel Center around even longer. “It represents the intersection of historical renovation and sustainable practices,” Galvin said. “The work they’ll be doing in the building, they’ll be researching ways to make the buildings more sustainable.”

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