Two Projects Receive Tax Credit Allocations

TACOMA-Roberson Building Co. and Rainier Pacific Bank will benefit from $7.4 million in federal tax incentives for local projects they are undertaking. Rainier Pacific Bank has been awarded $6.9 million in federal tax credits related the development of its headquarters. Roberson has been awarded $450,000 in tax credits toward its redevelopment of the Shuffleboard Building.The funds were made available as part of this city’s Commercial Revitalization Deduction allocation from the federal Department of Housing and Urban Development. The annual $12-million allocation has been occurring since 2002, when the city was named one of 28 national urban Renewal Communities and the only one in the Puget Sound region. The program is slated to last through 2009. The maximum allocation per project is $10 million. Last year, Rainier Pacific Bank received a $3.1-million CRD tax credit allocation for its project. Also last year Roberson received a $500,000 allocation for its Fraternity Hall project, which restored and converted to retail an old warehouse on Tacoma Avenue across from the city’s main library. To qualify, projects must be new construction or a substantial rehabilitation of an existing structure and must create space for new jobs. The project also must be located within the city’s Renewal Community Zone–an area that covers most of the city’s Downtown core, the Port area, Upper Tacoma and a portion of the city’s East side. The Commercial Revitalization Deduction allows a property owner to use an accelerated depreciation schedule on their project. Normal depreciation occurs over 39 years. With the CRD, owners can amortize their development over 10 years or amortize half the cost of the project in the first year and the rest over the remaining 38 years. What qualifies for allocation for new construction is the cost of the construction only, not the cost of the land and not tenant improvements. For a substantial rehab, 30% of the cost of the land can be figured in as well as the construction costs. The remaining $4.7 million of this year’s $12-million allocation will be available mid-July.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.