Faced with construction hammers going silent at the Saenger Theater and other historic rehabilitation projects across the state, Gov. Bobby Jindal and state legislators ushered through a four-year extension of a historic preservation tax credit that would have expired at year's end. The governor signed the extension bill July 8 at a ceremony at the Saenger, where construction stopped for a period in March after investors, acting on concerns the tax credit might not be renewed, asked that all financial transactions for the project be put on hold.
In order to resume work until the tax credit issue could be resolved, the city fronted more than $1.1 million to the $45.8 million restoration project, showing confidence in the legislature to deliver the extension, H.B. 63 by Sen. Ed Murray, D-New Orleans. The measure also was backed by preservationists and developers who warned that projects were in jeopardy, and by state lawmakers like Rep. Walt Leger III, D-New Orleans, who warned of lost jobs and lost revenue from unrealized taxes on income, sales and property. "The extension of the commercial historic tax credit, at the end of the day, was truly a no-brainer," Leger said.
With financing back on track, the curtain is scheduled to rise again in late 2012 at the 84-year-old theater.
House Bill 63, also signed by Jindal, extends a similar tax credit for residential properties until 2016. The Louisiana Legislature unanimously passed both bills.
Public money and state and federal tax credits will fund a large portion of the Saenger's resurrection. In addition to more than $6 million in state commercial historic preservation credits, there is about $9 million in federal historic preservation and new market tax credits and $13 million in Community Development Block Grant money.
Commercial preservation projects like the Saenger and the Bywater Art Lofts generate a state tax credit amount equal to 25 percent of the cost of restoration; the tax credits are then purchased by investors to lower their state income tax liability. Investors also sell them to companies and wealthy individuals.
The state has provided $135 million in tax credits to 124 projects since the program began in 2002. The projects have produced more than $650 million in investment, 11,000 construction jobs and 5,700 permanent jobs, Jindal said.
Had the tax credit not been extended, alternative plans for a lower level of funding would have been used, said Gary Elkins, an attorney for the Saenger Theater Partnership. It would have meant a smaller stage, which in turn would mean larger productions, such as the Broadway musical Wicked, which played on the Mahalia Jackson Theater's larger stage in 2010, would not be able to be staged at the Saenger. — Michael Joe