MASON CITY | When Sharon Steckman was first elected to the Iowa House of Representatives about nine years ago, one of the first major pieces of legislation she worked on was the Historic Tax Preservation Bill.
There was a learning curve, the Mason City Democrat admitted — there's a long process for cities and towns to apply for the corresponding historic tax credits, and several benchmarks each proposal they must meet. She soon determined, however, that the benefit of the credits is invaluable for the communities that use them.
DES MOINES | The Historic Park Inn in Mason City.
"I see it as a win-win for the state and community," Steckman said by phone Friday. "(Cities) can keep the character of the community, and at the same time upgrade the infrastructure so they can stay up-to-date."
Since the state started awarding these credits in 2001, Cerro Gordo County has received just over $5.17 million in money for seven projects, according to the Iowa Department of Cultural Affairs. The average award was $738,651.
According to Mason City Chamber of Commerce President Robin Anderson, a fair share of these awards have helped the city's downtown area. The Historic Park Inn, Moorman Clothiers, Central Park Dentistry and multiple other projects have received state assistance through historic tax credits.
"They are such an important part of community development projects," Anderson said. "It just doesn't make financial sense to convert historic property without the use of a tool like historic tax credits."
For businesses and interested parties to apply, there is a long process. First, the Historical Society of Iowa must determine the building's "significance and project eligibility," according to the organization's website.
Then, there are multiple registration and review processes. Many involve the state's secretary of the interior, and whether they meet that office's standard for rehabilitation.
After that, there is at least a 90-day review period by the State Historic Preservation Office of Iowa. If the office likes what it sees, tax credits are awarded.
Scott Moorman, co-owner/operator at Moorman Clothiers, said he benefited from the program when his building needed rehabilitation about 10 years ago.
The process to apply was long, he said, but earning 20 percent of the overall $300,000 project cost in tax credits was needed.
"To do it right, $300,000 is a substantial amount of money," Moorman said of the building restoration process. "Every little bit helps. And as long as the tax credits are still there ... there's no reason we (businesses) shouldn't use it."
Perhaps one of the most famous uses of both state and federal historic tax credits is the restoration of the Historic Park Inn Hotel.
Scott Borcherding, president of Wright on the Park, the nonprofit that owns the hotel, said $3.8 million in federal and $3.3 million in state historic tax credits were instrumental in restoring the hotel.
The process for applying for that money occurred more than six years ago, and was extensive, Borcherding said. The reward, however, was an invaluable addition to Mason City's downtown area, he added.
It also was important for another reason.
"When this project happened, the country was in a recession," Borcherding said at the Historic Park Inn on Friday. "We kept a lot of people employed for two-plus years, so we were kind of lucky in that respect."
Now, however, federal historic tax credits could get the axe. Congressional Republicans have proposed a tax bill that eliminates those credits, which have been used in hundreds of projects across Iowa since 2002.
Both Steckman and Borcherding are worried about how that will impact the state moving forward.
"It could hurt a lot of communities like ours, (or) communities even smaller," Borcherding said. "And cities bigger than us that just kind of reinvigorate older parts of their towns."
Dr. Jay Lala — who used federal and state historic tax credits for the Central Park Dentistry building improvements about five to six years ago — agreed. He added the impact of them is vital.
"It literally would be the difference between the project going ahead and not, Lala said. "I think they’re worth it, they (the buildings) have the character, they have the history … I would not have done anything if I didn’t have these credits."
Steckman said she understands that all tax credits need to be awarded carefully. But she pointed to where historic tax credits are used, and notes the long-term impact of them on towns across Iowa is important.
"I believe it preserves the character of a community, which I think is very important for the community," she said. "Every community has its shining star, and this helps with that."