If you’ve been keeping up with the redevelopments in Birmingham lately, you’ve probably heard the term “historic tax credits” thrown around a time or twenty. But what are they, and what good do they actually do?
What are Historic Tax Credits?
Simply put, Historic Tax Credits provides incentives to property owners to refurbish historic properties, rather than tear them down and start from scratch. There are two main types of historic tax credits:
- The Federal Historic Preservation Tax Incentives Program, which began in 1977, provides a 20% tax incentive to property owners who rehabilitate a historic building while maintaining its character.
- The Alabama Historic Rehabilitation Tax Credit is a 25% refundable tax credit for both private and commercial properties. To be eligible, the property must be 1) on or eligible for the National Register of Historic Places and 2) 60 years old or older.
Why are they important?
“Birmingham didn’t have much in the way of history to start with, and even though some people look upon the building as a monstrosity, it could be a major tourist attraction.”Dr. Gilbert Douglas, member of the local railroad club, in a public hearing about Terminal Station
Built in 1909, Terminal Station welcomed thousands of visitors with its iconic “Birmingham, The Magic City” sign. However, by 1969, a decline in rail travel led to the station’s destruction. Although several citizens groups pleaded to save the landmark, a lack of government incentives had already sealed its fate.
Birmingham Terminal Station is not the only beautiful building we’ve lost. The Morris Hotel, several original Jefferson County Courthouses, and the Richard Massey residence are a few that come to mind.
7 Buildings saved by Historic Tax Credits
1. The Pizitz
For 63 years, the downtown The Pizitz was the flagship of the Pizitz Department Store empire. However, the downtown Pizitz building closed in 1988 and sat empty for 28 years.
In 2000, Bayer Properties purchased the building and secured a Historic Preservation Certification from the National Park Service. Despite setbacks, Bayer Properties was able to renovate The Pizitz and turned it into an integral part of downtown.
2. Lyric Theatre
One of the crown jewels of Birmingham’s Historic Theatre and Retail District, the Lyric remained closed and in decline for over 50 years. Then, with support from Historic Tax Credits, Birmingham Landmarks restored the theatre to its former glory and reopened in 2016.
3. Redmont Hotel
Built in 1925, the Redmont is Birmingham’s longest-running hotel. In 2014, the Redmont Hotel launched a $20 million project to upgrade, rehabilitate and restore the hotel. The project was supported by both Federal and Alabama Historic Tax Credits. The renovations included an update for all guest rooms and the addition of a new restaurant & bar, along with a new café.
4. Thomas Jefferson Hotel
Built in 1929, the Thomas Jefferson Tower hosted its fair share of famous guests over the years—from Presidents Calvin Coolidge and Herbert Hoover to celebrities and musicians like Ray Charles, Ethel Merman, Marilyn Monroe, Mickey Rooney and Jerry Lee Lewis. Paul ‘Bear’ Bryant even had a special suite reserved for him!
However, the tower began to fall into disrepair—by 1983, Birmingham condemned the building. Then, the Alabama Historic Tax Credit opened the door for extensive renovations.
5. American Life Building
Opened in 1925, the American Life Building has worn many hats—it’s been an office building, the temporary home of the Birmingham City Commission and even the headquarters of the FBI Birmingham Division.
From 1983 to 2018, the building remained completely unoccupied. Then, with the help of over $3 million in Historic Tax Credits, a project launched to renovate the building into affordable apartments for Birmingham residents. The new apartment building is expected to open in late 2020.
6. Martin Biscuit Building + Dr. Pepper Bottling Plant
The Martin Biscuit Co. Building, built 1928, used to house the bakery for the Martin Biscuit Co. But from 1948 to 1999, the building was abandoned. The Dr. Pepper Bottling Plant also opened in 1928, but closed in 1982. Both properties were acquired by Sloss Real Estate in 1999 and became the centerpiece of the Pepper Place development. The project was financed in part by Historic Tax Credits!
7. Brown-Marx Tower
Built in 1906, the Brown-Marx is one of Birmingham’s oldest skyscrapers. For three years, it was the tallest structure in Birmingham. Originally, the tower hosted office space—namely for U.S. Steel.
After years of decline and near-abandonment, the Brown-Marx finally got some good news in 2019—Ascent Hospitality, the company that restored the Elyton Hotel, purchased the building. The plan is to renovate the tower to host a new hotel.