The year was 1890, and construction was finally complete on Minneapolis’ first skyscraper.
While only 12 stories and 218 feet tall (nothing compared to today’s towering superstructures), the Metropolitan Building cast an awe-inspiring shadow over the neighboring shops and offices. Costing $1 million to build (roughly $28.8 billion today), it was a true sight to behold and an instant icon of the burgeoning Downtown area.
If you’re a Twin Cities native and you’ve never heard of the Metropolitan Building before, there’s a very good reason for that—it was needlessly demolished in 1961.
So, why is this important?
Because once again, we’re dangerously close to history repeating itself. The demolition of the Metropolitan Building provided a catalyst for historic preservation movements statewide—an effort that could be taking a major step back as early as next year.
On June 30, 2021, The Minnesota Historic Structure Rehabilitation State Tax Credit is set to expire. Congress will be voting on the proposed bill this fall, so we need your help to bring this issue to the attention of the entire community!
What is the Minnesota Historic Structure Rehabilitation State Tax Credit?
While certainly a mouthful, the Minnesota Historic Structure Rehabilitation State Tax Credit is a successful economic development tool used for revitalizing distressed, vacant, and underutilized historic properties throughout the state.
This Historic Tax Credit (HTC) provides a refundable income tax credit equal to 20% of qualified expenses made to renovate historic buildings listed in the National Register of Historic Places and that are used for income-producing purposes (such as office space, industrial use, retail shops, hospitality, and residential rental units).
By the numbers
According to University of Minnesota Senior Economic Impact Analyst Bridget Tuck, during the fiscal year 2019, the Historic Tax Credit had the following impacts:
- 14 — The number of properties that were approved for the HTC between July 1, 2018, and June 30, 2019.
- $245.5 million — The total estimated economic impact of the HTC.
- 1,100 — The estimated number of jobs the HTC supported in the state.
- $76.4 million — The estimated labor income HTC generated.
- $9.78 — The amount of economic activity generated for each dollar supplied by the HTC in the state of Minnesota.
What has Greiner done to help?
At Greiner Construction, our team specializes in building repurposing (also known as adaptive reuse). We are dedicated to preserving our state’s history by letting each structure’s story help determine its future and the future of our state.
Greiner has supported the historic preservation of many iconic buildings throughout the Twin Cities, which would not have been possible without the Minnesota HTC. Some of these include:
- The Hewing Hotel: This historic building—originally built in 1897—was previously a warehouse in the North Loop district of Minneapolis.
- The Museum of American Art: Designed by Cass Gilbert—the same architect that worked on the Minnesota State Capital—this early skyscraper now features luxury offices, a large gallery, and several classrooms for further education.
- 124 North Third: Two neighboring buildings in the North Loop—each built in the 1880’s—were converted into modern office spaces and retail storefronts.
- 700 Central: Previously the home of a casket maker and a storage facility, these two historic buildings were revitalized into a notable, high-end apartment complex.
- The Guardian Building: Formerly the James J. Hill private bank, The Guardian Building in Lowertown St. Paul is now comprised of modern offices and public spaces.
It takes a team to preserve the history of the Twin Cities
We would not be able to do the work we do without our partnerships and collaboration with the building reuse experts and historical consultants that are committed to preserving the Twin Cities.
It is with great pleasure that we introduce Meghan Elliott at New History. Meghan—the firm’s Founder and Principal—leads a dynamic and integrated team of historians and licensed historical architects with nationally recognized expertise in building and site reactivation.
As professionals with specialized experience in historic preservation, real estate development, preservation regulations, and the financial framework for adaptive reuse, New History has played an integral role in preserving many Twin Cities landmarks, including:
- Dayton’s Department Store: This Minnesota icon in the heart of Downtown Minneapolis will reopen with over 1 million square feet of office and retail space. It is the biggest historic tax project in the state to date.
- 30 N 1st: Formerly the Market Hotel, this building in the heart of the North Loop now features a Japanese restaurant, a whiskey bar, and co-office spaces.
- The Switch House: Originally the Union Railway Storage Building and formerly known as the Soap Factory, this building is being converted into offices, with space for a restaurant and spa on the first floor.
- Amber Union: The art deco Farmers Union and Grain Terminal Association (most recently the TIES building) is being converted to multi-family housing.
- Hollywood Theater: After 30 years of vacancy, the lights are back on at the Hollywood Theater and the neighborhood icon is soon to host events.
Why is this Historic Tax Credit so important?
These projects would have never come to life without the aid of historic tax credits from both the federal and state level.
These types of projects are rarely possible using only equity and debt, the more conventional real estate funding tools. There is almost always a funding “gap”—the difference between the cost of the project and the value it’s expected to generate.
This is why the Minnesota Historic Structure Rehabilitation State Tax Credit is such a critical resource for filling that gap for Minnesota projects. If we don’t act now, this crucial and powerful source of funding may be gone forever!
Here’s what you need to know
- The Minnesota Historic Structure Rehabilitation State Tax Credit (Sec. 290.0681) is set to expire on June 30, 2021.
- The State Historic Preservation Office (SHPO) will have the authority to issue allocation certificates until June 30, 2021, and can issue credit certificates until June 30, 2024. (To claim the credits, a project must receive both an allocation certificate and a credit certificate.)
- The Minnesota Congress will be voting on changes to the bill later this fall (2020) and needs to act now to extend the program.
What are the proposed changes to the tax bill?
Several bills have been introduced in the Minnesota House and Senate. As a way to optimize the incentives for developers, these bills aim to:
- Retain the tax bill as a single, refundable credit (not conforming to changes at the federal level that require the credit to be spread over five years).
- Eliminate the current sunset date of June 30, 2021.
- Allow the credit to be transferred more than once.
We need your help to preserve Minnesota’s historic structures
We cannot hope to protect the Minnesota Historic Structure Rehabilitation State Tax Credit without your help! Here are three easy ways for you to do your part to help our Minnesota communities:
- Contact your senator and representative and ask them to support the HTC language in the House omnibus taxes bill, HF2125. (Are you not sure who your representatives are? You can look them up here.)
- Ask your city council and mayor to pass a resolution in support of the Minnesota Historic Structure Rehabilitation State Tax Credit and the bills that have been introduced.
- Amplify this message using social media. Follow our updates on Facebook, LinkedIn, Twitter, and Instagram. Like, share, and retweet this blog post to help us spread the word!
Want to learn more?
Contact one of our experts who will be happy to discuss this issue further:
Greiner Construction: Spencer Finseth
New History: Meghan Elliott