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Preservationist's View: Preservation Tax Credits Create Local Jobs:
Published March 29 2010
By: Richard Moe, Duluth News Tribune
The Duluth Armory is a highly visible, large-scale redevelopment project that could benefit from the use of historic tax credits. (2000 file / News Tribune)
As legislators consider adding a 20 percent historic rehabilitation tax credit program in Minnesota, one question is uppermost in their minds: Will the program create jobs? In a time of economic turmoil and mounting budget deficits, that threshold question is the starting point for most legislative debates in St. Paul this year.
In this case, the question is easy to answer. Thirty states now offer a historic tax credit program and numerous studies in recent years demonstrate that historic rehab tax credit programs are job-creators that also offer taxpayers one of the best dollar-for-dollar returns on investment of any state program. In short, a historic tax credit program provides the kind of economic incentive that is critical to the revitalization of Minnesota communities, whether large or small, urban or rural.
Nationally, there is overwhelming evidence that rehab tax credits are job-creators. A comprehensive study conducted by Rutgers University this year analyzed the economic impact of the federal Historic Tax Credit since its inception in 1976. The study concluded that the Historic Tax Credit was a highly efficient job creator, accounting for the creation of 1.8 million new jobs since 1976, or more than 58,000 new jobs per year. Economist Donovan D. Rypkema studied the effects of Missouri’s state-rehab tax credit and found that 6.3 more jobs were created through rehabilitation than through manufacturing. In Maryland, a recent report by the Abell Foundation showed that over the past 12 years completed rehabilitations of commercial properties generated $1.74 billion in total economic activity and employed an estimated 15,120 people. Construction labor alone totaled an estimated 9,248 workers. While this short-term impact is impressive, it’s worth noting that the greatest return on the state’s investment came from the long-term increase in employment and property taxes on rehabilitated buildings.
How does a tax incentive for rehabbing historic properties help create jobs? And how can it spur economic growth? Start by thinking about your own home. As many homeowners know from personal experience, rehabbing an older house is more labor-intensive than building a new one and requires more skilled labor than new construction. That means wages for this kind of work are usually higher — as are income taxes paid by workers on rehabilitation projects. What’s more, materials for rehab projects tend to be purchased locally, so sales tax revenue is kept in-state. On top of this, the tax credit is not awarded until the work is completed, so the state gains revenue from the taxes paid on materials and labor prior to the building’s occupancy, meaning that revenue flows into state coffers faster.
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Published February 16 2010
Our view: Armory rebirth could lead to a Duluth Dinkytown
Would you believe developers are lining up to create apartments for an estimated 300 college students at the old Duluth Armory on London Road at 13th Avenue East?
•The Armory
The former Armory that sits on London Road was bought by the Armory Arts and Music Center of Duluth for $1 in 2003. (2007 file / News Tribune)
•Armory's storied past
How long have Duluth and its thousands of college students been talking about the need for a student hub here — an area where young people could live and hang out, an area filled with an eclectic mix of shops, eateries, apartments, coffee places and nightlife, an area not unlike Minneapolis’ “Dinkytown” on the north end of the University of Minnesota?
Such an area appears poised to become reality between about First Street and London Road and from about 12th Avenue East to 15th Avenue East. Already in place is a grocery store, a Walgreens drug store, the storefronts of the Plaza Shopping Center and natural beauty: The Rose Garden, Lakewalk and Lake Superior all are on the other side of London Road.
About all that’s still needed are students. And would you believe developers are lining up to create apartments for an estimated 300 college students at the old Duluth Armory on London Road at 13th Avenue East? Some of the apartments would face London Road; others would be in a new building in the adjacent lot where a Perkins restaurant once stood. Indoor parking would accommodate 180 cars with another 20 spaces outside.
The redevelopment also could include an eatery, a coffee shop, a bookstore and other such businesses. The Armory’s drill hall, where Bob Dylan once attended a Buddy Holly concert, would be preserved and refurbished for wedding receptions, concerts and other public events. An arts and music education component, with recording studios, would be included, modeled after a similar, youth-focused endeavor that’s succeeding in Charlottesville, Va.
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 Published May 15 2009
Discover Duluth: The Armory, Vol. I-III:
By: Matthew R. Perrine, Budgeteer News
Throughout its 9 plus decades of existence, the Armory has played an integral role in many Duluthians' lives.
For more than half of its nine-plus decades of existence, Duluth’s Armory manufactured memories a-plenty. OK, that’s a gross understatement. From trivial (flea markets, proms) and pretty cool (the Minneapolis Lakers basketball team, now in Los Angeles, once played an exhibition game there) to vastly important (military training and funerals), the building was a bona fide epicenter of community events for much of its life. And that’s not even counting the exhaustive list of legendary acts that have graced its stage: Johnny Cash, the Beach Boys and Sonny and Cher, the Supremes, the Guess Who — all the way down to the Zombies. Then, of course, there was the granddaddy of all historic concerts: Back in 1959, shortly before “The Day the Music Died,” Buddy Holly brought his Winter Dance Party tour to the beloved Duluth institution.
In the crowd that evening was a young Bob Dylan, who would go on to immortalize that time and space in his 1998 Grammy acceptance speech for album of the year: “When I was about 16 or 17 years old,” he said before an internationally televised audience, “I went to see Buddy Holly play at the Duluth National Guard Armory, and I was three seats away from him, and he looked at me and ... I know he was with us all the time we were making this record in some kind of way.” But the bubble had to burst sometime. When the city took over the building in the late ’70s, conditions inside quickly started to devolve.
What was once a source of pride in the community became, quite literally, a dumping ground for the city. In addition to using it to store fleet vehicles, city officials actually poured raw materials onto the main room’s open floor — there’s a big stain right about where Dylan was sitting that fateful night.
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