Tacoma is the only place in Puget Sound and one of only 28 urban communities around the country in 2002 to receive a Department of Housing and Urban Development "Renewal Community" designation. The designation makes businesses and developers within the area eligible for a variety of federal tax credits and deductions, including the "Commercial Revitalization Deduction" allocation, which allows property owners to use an accelerated depreciation schedule on their project. Projects in Tacoma will compete each year for a piece of the city's $12-million allocation.
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.
The five projects that won were recommended for the tax credit allocation by the City of Tacoma and the Tacoma Community Redevelopment Authority. That recommendation was accepted by the Washington State Department of Community, Trade and Economic Development, which oversees distribution of the federal tax credit incentives. The Projects and their allocations are as follows:
--The Albers Mill building project by Albers Mill LLC received a $3.9-million CRD allocation. The project is an historical renovation project on waterfront;
--The Courtyard Marriott Hotel project by Hollander Investments and Tacoma Hospitality LLC received a $3.2-million CRD allocation, related to the renovation and expansion of the Waddell Building into a 160-room hotel located next to the city's convention center project;
--The Rainier Pacific Bank Building project by Rainier Pacific Bank received a $3.1-million CRD allocation for the redevelopment of a property into its headquarters, which will include a retail banking location;
--The Ted Brown Music Building project by Broadway Center Investors LLC received a $1.3-million CRD allocation. The Downtown project is taking two properties and combining them into one commercial property that will house the Tacoma School of Arts;
--The Fraternity Hall project by Roberson Building Co. received $0.5 million for the restoration and retail conversion of an old warehouse on Tacoma Avenue across from the city's main library.
Tacoma Economic Development Director Juli Wilkerson says the benefits to these projects include 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. "This CRD allocation is another way we can encourage density and development in Tacoma," says Wilkerson.
In addition to the CRD allocation available to property owners and developers, Tacoma businesses can also take advantage of the RC designation through other tax credits and deductions, including the RC Wage Credit, Increased Section 179 Deduction and Zero Percent Capital Gains. Unlike the CRD, these business tax incentives do not require an application. Instead, businesses can file the proper forms directly with the Internal Revenue Service.
Commercial property owners, who are rehabbing or developing their property, can apply for a piece of Tacoma's 2004 $12 million Commercial Revitalization Deduction pie early next year. To get on the list to receive an application, or for questions regarding the CRD or other Renewal Community tax incentives, contact Shari Hart, Tacoma Economic Development Department, at (253) 591-5208 or [email protected].
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