TACOMA, WA-The Washington State Department of Community, Trade and Economic Development has awarded $12 million in federal tax incentives to the Ted Brown Music and Thea's Landing projects.
Tacoma is the only place in Puget Sound — and one of only 28 urban communities around the country — to receive a Department of Housing and Urban Development (HUD) “Renewal Community” (RC) designation in 2002. The city's Economic Development Department applied for the designation in late 2001, competing with more than 100 other U.S. communities for the award.
“This RC designation will save Tacoma companies money and help close the dollar gap to make many projects work,” says Juli Wilkerson, Tacoma Economic Development Department Director. “It will also give us another tool-along with our simplified zoning code and eight-week guaranteed permits-to entice businesses to move or expand to Tacoma.”
Tacoma businesses and developers within the RC area are eligible for a variety of federal tax credits and deductions. The “Commercial Revitalization Deduction” allocation awarded to Thea's Landing and the Ted Brown Music Building allows the projects to use an accelerated depreciation schedule on a portion of their project. Each year, through 2009, Tacoma property owners and developers with qualifying construction or substantial rehabilitation projects in the RC can apply for up to $12 million (maximum $10 million per project) in deductions.
Several commercial projects competed for Tacoma's 2002 CRD allocation. Thea's Landing and Ted Brown won the competition, receiving $10 million and$2 million allocations, respectively. The benefits to both projects are a reduced federal tax bill and an increased ability to make their projects “pencil” by giving owners financial relief early in the projects when they incur the most expenses.
In addition to property owners and developers, Tacoma businesses can also take advantage of the RC designation through a number of tax credits and deductions, including:
– Wage credits. Businesses within the RC area can get a tax credit of up to $1,500 for every newly hired or existing employee who lives and works in the RC.
– Increased Section 179 Deduction. Qualifying businesses can deduct all or part of the cost of qualifying machinery or equipment in the year they place it in service. With the RC designation, this deduction amount increased from $24,000 too $59,000.
– Zero percent capital gains. If you purchase land in the RC or stock in an RC business, you will not pay capital gains on the sale if you hold the asset for at least five years and maintain “qualifying business” status.
The RC zone covers most of Tacoma's downtown core, the Port area, Upper Tacoma and a portion of the city's East Side. The RC designation replaces Tacoma's former HUD “Enterprise Community” designation and is slated to last until Dec. 31, 2009. HUD ranked RC applicants according to their poverty, unemployment and low-income households rates on the 1990 Census.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
