Historic Tax Credit Saves a Longview Building from Demolition
Labeled an “eyesore” by the Longview News-Journal, the Petroleum Building once faced demolition after being deemed substandard by Judge Larry Merriman in August 2016. With the help of the historic tax credit program, Saigebrook Development, LLC. has plans to successfully conserve the 65-year-old building and begin its transformation into a residential community.
Advantages to the Restoration
The residential building will create a needed source for affordable housing in Longview’s downtown area. Projects like this show the advantages of using the tax credit program and its potential to rejuvenate once bustling cities. They also serve as an opportunity for developers to enhance goodwill and strengthen their brand in communities. Saigebrook and REES are working closely with the City of Longview on the rehabilitation plans for the property to ensure that it fits within the vision of the community.
REES’ Residential team has witnessed the many advantages to refurbishing older buildings. The advantages of “large-scale recycling” span far beyond the building’s themselves. The most obvious advantage is the preservation of our heritage and history. Investing into a community can help to improve your company’s reputation and name recognition. According to the National Trust for Historic Preservation, more than $131 billion has been leveraged in private investments into our communities during the life of the historic tax credit program.
Changes to the Federal Historic Tax Credit
For the Petroleum Building, Saigebrook Development was also awarded necessary federal housing tax credits by the Texas Department of Housing and Community Affairs under the condition they use the funds to construct affordable housing. Many residents are hoping the restoration of the Petroleum Building will spark additional revitalization of the once bustling downtown area.
The federal historic tax credit program was almost wiped away when the House voted to abolish it last year. Luckily, it was saved in the latest Tax Reform Legislation with modifications. The new legislation restructures the 20% credit for rehabilitation expenditures so that it is claimed over a five-year period beginning in the year the building is placed in service rather than a lump sum.
Transforming into the New Alton Plaza at the Petroleum Building
The five-story Petroleum Building was initially designed to be a parking garage in 1953. Years later, the top three floors of the parking garage were converted into office spaces while the lower two levels of parking remained. The new residential lifestyle center will be named Alton Plaza at the Petroleum Building and will offer both affordable and market-rate apartments.
REES’ design preserves the historic features of the building including marble walls and terrazzo flooring with brass inlay in the lobby. The once old-fashioned diner and malt shop will be converted into a modern internet café and lounge revitalized with the diner’s nostalgic aesthetic.
We are proud to be on the restoration team for this historic building and recognize the importance of the historic tax credit program. The program has been around for more than 40 years and has been a revenue generator. In fact, the United States Treasury receives $1.20-1.25 in tax revenue for every dollar invested in historic rehabilitation projects, according to a study commissioned by the National Park Service. The potential to rebuild communities using the federal historic tax credit program should encourage developers to seek out projects like Alton Plaza. REES will continue to seek ways to preserve our architectural heritage as we are doing with Alton Plaza.