01

NaƟ onal Park Service 

U.S. Department of the Interior

Technical PreservaƟ on Services

 Annual Report Annual Report

on the 

Economic Economic 

Impact 

of the 

Federal Historic Federal Historic 

Tax Credit for Tax Credit for 

FY 2014 FY 2014

Edward J. Bloustein School

of Planning and Public Policy
Cover photo: Knapp’s Centre, Lansing, MI, James Haefner Photography

This execuƟ ve summary is based on the fi ndings of a NaƟ onal Park Service-funded annual study undertaken through a 

cooperaƟ ve agreement with Rutgers University. The University is responsible for the content of the study.

Center for Urban Policy Research

Edward J. Bloustein School of Planning and Public Policy

Rutgers, The State University of New Jersey

New Brunswick, NJ 08901

Technical PreservaƟ on Services

NaƟ onal Park Service

U.S. Department of the Interior

Washington, DC 20240

The NaƟ onal Trust for Historic PreservaƟ on provided assistance in the preparaƟ on of the two case studies.

September, 2015
ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014

1

A Message from the NaƟ onal Park Service

Beyond the NaƟ onal Park System, the NaƟ onal Park Service through its Cultural Resources, Partnerships, and 

Science Programs is part of a naƟ onal preservaƟ on partnership working to promote the preservaƟ on of historic 

resources in communiƟ es small and large throughout the country. For the past 37 years, the NaƟ onal Park Service, in partnership with the State Historic PreservaƟ on Offi ces, has administered the Federal Historic PreservaƟ on Tax IncenƟ ves Program. 

Commonly referred to as the Federal Historic Tax Credit (HTC), the HTC is designed to not only preserve and 

rehabilitate historic buildings, but to also promote the economic revitalizaƟ on of older communiƟ es in the naƟ on’s ciƟ es and towns, along Main Streets, and in rural areas. Targeted to income-producing buildings, the HTC 

program is the largest and most eff ecƟ ve Federal program specifi cally supporƟ ng historic preservaƟ on. Since 

the program’s incepƟ on in 1976, the NaƟ onal Park Service has cerƟfi ed the rehabilitaƟ on of more than 40,380 

historic properƟ es throughout the United States. 

In Fiscal Year (FY) 2014, 762 completed historic rehabilitaƟ on projects were cerƟfi ed by the NaƟ onal Park 

Service, represenƟ ng $4.32 billion in esƟ mated rehabilitaƟ on costs that qualify for a 20% Federal tax credit. 

(Another 1,156 proposed projects were also approved in FY 2014.) Many of these projects involved buildings 

that were abandoned or underuƟ lized, and in need of substanƟ al rehabilitaƟ on to return them to, or for their 

conƟ nued, economic viability. The HTC program also is an important tool in helping to revitalize older, economically depressed communiƟ es. Based on project data provided by the NaƟ onal Park Service, PolicyMap has 

determined that nearly 60% of the cerƟfi ed rehabilitaƟ on projects in FY 2014 were located in low and moderate income census tracks.

The NaƟ onal Park Service issues annual reports on the HTC program quanƟ fying the number of historic rehabilitaƟ ons cerƟfi ed each year, their reported costs, and other staƟ sƟ cal informaƟ on on the program. The annual 

and staƟ sƟ cal reports are available on the NaƟ onal Park Service’s Technical PreservaƟ on Services (TPS) website 

at hƩ p://www.nps.gov/tps/tax-incenƟ ves.htm, along with informaƟ on on the HTC program in general.

For FY 2014, the NaƟ onal Park Service also turned to the Rutgers University Center for Urban Policy Research, 

through a cooperaƟ ve agreement, to undertake and report on the economic impacts of the HTC for the fi scal year ending September 30, 2014. This report highlights its main fi ndings. An economic model previously 

developed by the Center under a series of grants from the NaƟ onal Park Service was uƟ lized in the preparaƟ on 

of this report. The economic model was uƟ lized by the Center for their fi ve prior reports on the Federal HTC, as 

well as for a number of other economic reports for state governments and others. 

As the Center’s report idenƟfi es, the level and breadth of economic impacts resulƟ ng from the Federal HTCs in 

FY 2014 are quite impressive. In addiƟ on, the report includes informaƟ on on the cumulaƟ ve economic impact of the Federal Historic PreservaƟ on Tax IncenƟ ves Program for the past 37 years, starƟ ng in 1977-78 with 

the fi rst completed rehabilitaƟ on project to be cerƟfi ed by the NaƟ onal Park Service under the program. The 

program remains one of the Federal government’s most successful and cost-eff ecƟ ve community revitalizaƟ on 

programs. 

Technical PreservaƟ on Services
2

1

The HTC has a mulƟ step applicaƟ on process, encompassing Part 1 (evaluaƟ on of the historic signifi cance of the property), Part 2 (descripƟ on of the 

proposed rehabilitaƟ on work), and Part 3 (request for cerƟfi caƟ on of completed work). Both Part 2 and Part 3 rehabilitaƟ on staƟ sƟ cs include only costs 

considered “eligible” or “qualifi ed” for the tax credit under the Internal Revenue Code (Qualifi ed RehabilitaƟ on Expenditures, or QREs), as opposed to 

“ineligible” or “nonqualifi ed” costs. While the ineligible/nonqualifi ed expenses do not count for tax credit purposes, they are a component of the total 

rehabilitaƟ on investment or cost borne by the HTC developer. In pracƟ cal terms, the total rehabilitaƟ on investment, including ineligible/nonqualifi ed 

costs, helps pump-prime the economy. For example, in FY 2014, the Part 3 cerƟfi ed investment amounted to about $4.3 billion, while the total rehabilitaƟ on outlay associated with the HTC was about $4.8 billion.

 Annual Report on the Economic Impact of the Federal Historic 

Overview of the Rutgers Economic Analysis

The federal historic tax credit (HTC) is a federal income tax credit that promotes the rehabilitaƟ on of incomeproducing historic properƟ es. This study examines the economic impacts of the HTC (currently at 20 percent) 

by analyzing the economic consequences of the project it supports. This analyses focuses on the economic 

eff ects of these projects during construcƟ on, quanƟ fying the total economic impacts (i.e., direct as well as mulƟ plier, or secondary, economic consequences) for the fi scal year ending September 30, 2014, and for the period 

since the program’s incepƟ on. The study uƟ lizes the PreservaƟ on Economic Impact Model (PEIM), a comprehensive economic model development by Rutgers University for the NaƟ onal Park Service. 

The current analysis applies the PEIM to both cumulaƟ ve (FY 1978 through FY 2014) HTC-related historic rehabilitaƟ on investment (about $117.6 billion in infl aƟ on-adjusted 2014 dollars) and single-year (FY 2014) HTCrelated rehabilitaƟ on investment (about $4.8 billion). It considers the eff ects of the cumulaƟ ve $117.6 billion 

rehabilitaƟ on investment as if it applied to one year (2014), rather than backdaƟ ng the PEIM for each of the 

37 years in the study period. It also considers the full rehabilitaƟ on investment associated with the HTC (e.g., 

$4.8 billion in FY 2014), and not the somewhat lower amount reported by the NaƟ onal Park Service based on 

esƟ mated qualifi ed rehabilitaƟ on costs indicated by property owners requesƟ ng cerƟfi caƟ on of rehabilitaƟ on 

for purposes of the tax credit (e.g., $4.3 billion in FY 2014). 1

Tax Credit for FY 2014: ExecuƟ ve Summary

The Arcade in Providence, Rhode Island, was built in 1828 and is regarded as the naƟ on’s “fi rst enclosed shopping 

mall.” Declared a NaƟ onal Historic Landmark in 1976, the three-story structure is notable for its classical Greek 

Revival architecture, with giant Ionic columns and a large central atrium lit from above by a vaulted glass ceiling. 

Inside, the third fl oor steps back from the second, and both are secured by mahogany handrails and ornate scrollediron balustrades. Throughout its history, shoppers have been invited to browse three fl oors of shops—however, 

few were willing to climb the stairs to the second and third fl oors, creaƟ ng frequent shop closures and a history of 

economic hardship. A 1980 renovaƟ on only postponed its ulƟ mate closing. 

In 2005, the building was purchased by developer Evan Granoff , who in collaboraƟ on with Northeast CollaboraƟ ve 

Architects, began planning for a $8.9 million rehabilitaƟ on to convert the building into a mixed retail-residenƟ al 

use. Work began in 2012 with special care taken to respect the arcade’s historic features, design, and use. Thirteen 

small, locally-owned bouƟ que shops and three restaurants would be located on the fi rst fl oor; former shop spaces 

on the upper two fl oors were converted into 38 “micro-loŌ s”—small rental units ranging from 225 to 450 square 

feet. The rehabilitaƟ on work met the Secretary of the Interiors Standards for RehabilitaƟ on for purposes of the 

Federal historic tax credits and, in FY 2014, the NaƟ onal Park Service declared the project a cerƟ fi ed rehabilitaƟ on. 

The Arcade, Providence, RI
ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014

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The results of the PEIM include many fi elds of data. The fi elds most relevant to this study are the following:

• JOBS: Employment, both part- and full-Ɵ me, by place of work, esƟ mated using the typical job characterisƟ cs of each industry.

• INCOME: “Earned” or labor income; specifi cally, wages, salaries, and proprietor income.

• WEALTH: Value-added—the sub-naƟ onal equivalent of gross domesƟ c product (GDP). At the state level, 

this is called gross state product (GSP).

• OUTPUT: The value of shipments, as reported in the Economic Census.

• TAXES: Tax revenues generated by the acƟ vity, which include taxes to the federal government and to state 

and local governments.

 The Arcade, Providence, RI, photo by Kaaren Staveteig
ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014

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The following table summarizes the impacts of the HTC in infl aƟ on-adjusted 2014 dollars for each of these 

economic measures for the cumulaƟ ve period FY 1978-2014 and for FY 2014. 

The benefi ts of investment in HTC-related historic rehabilitaƟ on projects are extensive, increasing payrolls 

and producƟ on in nearly all sectors of the naƟ on’s economy. The cumulaƟ ve eff ects for the period of FY 

1978 through FY 2014 are illustraƟ ve. During that period, $117.6 billion in HTC-related rehabilitaƟ on investment created 2,493,000 jobs and $134.1 billion in GDP, nearly 30 percent of which (738,000 jobs and $38.0 

billion in GDP) was in the construcƟ on sector. This is as one would expect, given the share of such projects 

that require the employment of building contractors and trades. Other major benefi ciaries were the service 

sector (443,000 jobs, $17.7 billion in GDP), the manufacturing sector (510,000 jobs, $34.5 billion in GDP), 

and the retail trade sector (364,000 jobs, $10.0 billion in GDP). As a result of both direct and mulƟ plier effects, and due to the interconnectedness of the naƟ onal economy, sectors not immediately associated with 

historic rehabilitaƟ on, such as agriculture, mining, transportaƟ on, and public uƟ liƟ es, benefi t as well. (Summary Exhibit 1).

NaƟ onal Economic Impacts

Federal HTC-assisted RehabilitaƟ on

$117.6 billion CUMULATIVE (FY 1978-2014) 

historic rehabilitaƟ on expenditures 

(adjusted for infl aƟ on) result in:

$4.8 billion ANNUAL FY 2014 

historic expenditures results in:

Jobs (person-years, in thousands ) 2,493.0 78.0

Income ($ billion) 98.6 3.4

Output ($ billion) 271.4 9.1

GDP ($ billion) 134.1 4.6

Taxes ($ billion) 39.3 1.2

 Federal ($ billion) 28.6 0.8

 State ($ billion) 5.4 0.2

 Local ($ billion) 5.3 0.2
ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014

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The HTC NaƟ onal Economic Impacts

HTC-related historic rehabilitaƟ on benefi ts state economies as well as the naƟ onal economy. For example, in 

Illinois in FY 2014, federal HTC-related rehabilitaƟ on acƟ vity totaled about $807 million. The naƟ onal impacts of 

that investment included 11,903 jobs, an addiƟ onal $1,577 million in output, $588 million in income, $759 million in GDP, $141 million in federal taxes, and $190 million in total taxes. In Illinois alone, the same $807 million 

in HTC-related spending resulted in 6,369 jobs, $807 million in output, $359 million in income, $424 million in 

gross state product (GSP), and $96 million in total taxes.

HTC Impacts Compared with Those of NonpreservaƟ on Investments and Housing ContribuƟ ons

How does HTC-related historic rehabilitaƟ on perform as an economic pump-primer compared with other, nonpreservaƟ on investments? In short, quite well.

Numerous studies conducted by Rutgers University have shown that in many parts of the country, a $1 million 

investment in historic rehabilitaƟ on yields markedly beƩ er eff ects on employment, income, GSP, and state and 

local taxes than an equal investment in new construcƟ on or many other economic acƟ viƟ es (e.g., manufacturing or services). These fi ndings demonstrate that historic rehabilitaƟ on, combined holisƟ cally with the many 

acƟ viƟ es of the broader economy, delivers a commendably strong “bang for the buck.” 

About half of all HTC transacƟ ons include housing. OŌ en used in combinaƟ on with programs such as the Low 

Income Housing Tax Credit (LIHTC), the HTC has produced powerful and very benefi cial results in this area. 

From FY 1978 through FY 2014, the HTC has been involved in the creaƟ on of a reported 510,953 housing units. 

Of that total, 261,342, or 51 percent, were exisƟ ng housing units that were rehabilitated; 249,611 or 49 percent, were newly creaƟ ng housing units (e.g. housing resulƟ ng from the adapƟ ve reuse of commercial space). 

In addiƟ on, 141,557, or 28 percent of the total housing units produced (510,953), were aff ordable to low- and/

or moderate, income (LMI) families. In FY 2014, 6,540 LMI units were produced under the federal HTC. The federal HTC’s infl uence on housing, largely invisible to the general public, deserves much greater aƩ enƟ on, given 

its producƟ on of housing in general and LMI housing units in parƟ cular.

The most recent economic benefi ts of the federal HTC are also most impressive. In FY 2014, HTC-related investments generated approximately 78,000 jobs, including 27,000 in construcƟ on and 18,000 in manufacturing, 

and were responsible for $4.6 billion in GDP, including $1.5 billion in construcƟ on and $1.3 billion in manufacturing. HTC-related acƟ vity in FY 2014 generated $3.4 billion in income, with construcƟ on ($1.2 billion) and 

manufacturing ($799 million) reaping major shares. (See Summary Exhibit 2 for more details.) These benefi ts 

were especially welcome in 2014, as the naƟ on conƟ nued its economic recovery.
ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014

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2 See footnote 1.

3 These esƟ mates are based on full uƟ lizaƟ on of the credits in cases of cerƟfi ed rehabilitaƟ ons. For various reasons, not all completed projects cerƟfi ed 

by the NaƟ onal Park Service ulƟ mately uƟ lize the credit. Their economic impact, nevertheless, remains.

Summary of HTC Impacts

In short, the federal HTC is a good investment for local communiƟ es, individual states, and the naƟ on. The 

cumulaƟ ve impacts of the program to date (FY 1978 through FY 2014) support this conclusion.

• An infl aƟ on-adjusted (2014 dollars) $22.6 billion in HTC cost encouraged a fi ve Ɵ mes greater amount of 

historic rehabilitaƟ on ($117.6 billion).

• This rehabilitaƟ on investment generated about 2.5 million new jobs and billions of dollars in total 

(direct and secondary) economic gains.

• The cumulaƟ ve posiƟ ve impacts on the naƟ onal economy included $271.4 billion in output, $134.1 

billion in GDP, $98.6 billion in income, and $39.3 billion in taxes, including $28.6 billion in federal tax receipts.

• The leverage and mulƟ plier eff ects noted above support the argument that the federal HTC is a strategic investment that works.

The Cost of the HTC

The HTC is a tax expenditure and has a public cost. In the simplest terms, the federal cost of the HTC is equal 

to the credit percent (20 percent since 1986) applied to the Part 3 (“qualifi ed for tax credit”) esƟ mated investment.2

 Applying that calculaƟ on, the federal HTC costs the U.S. Treasury approximately $22.6 billion (in 

infl aƟ on-adjusted 2014 dollars) over the period of FY 1978 through FY 2014, while the cost for projects cerƟ -

fi ed by the NaƟ onal Park Service in FY 2014 alone was about $865 million.3

 Weighing against these costs are 

the signifi cant economic impacts (i.e., jobs, income, GDP, and output) and tax revenue (federal, state, and local) 

generated by HTC-aided rehabilitaƟ ons and documented in this study. An important fi nding is that the HTC 

yields a net benefi t to the U.S. Treasury, generaƟ ng $28.6 billion in federal tax receipts over the life of the program, compared with $22.6 billion in credits allocated.
ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014

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Sources: Department of the Interior, NaƟ onal Park Service, Technical PreservaƟ on Services; NaƟ onal Council of State Historic PreservaƟ on Offi ces; 

 and calculaƟ ons by Rutgers University

Income GDP Output Local State Federal Total

Alabama $12.7 234 $8.0 $15.1 $20.8 $225 $335 $1,936 $2,496

Alaska $0.0 0 $0.0 $0.0 $0.0 $0 $0 $0 $0

Arizona $13.3 230 $7.9 $10.2 $25.7 $12,638 $8,161 $2,230 $23,029

Arkansas $20.5 424 $14.3 $21.3 $37.9 $406 $742 $3,432 $4,581

California $226.8 3,382 $164.4 $214.7 $443.7 $5,722 $9,150 $41,655 $56,527

Colorado $1.7 106 $1.2 $1.6 $3.1 $42 $54 $276 $372

Connecticut $15.0 215 $10.5 $14.5 $27.5 $791 $671 $2,407 $3,868

Delaware $0.0 1 $0.0 $0.0 $0.1 $2 $2 $7 $11

Dist. of Columbia $20.6 299 $13.9 $18.7 $36.2 $1,382 $554 $2,809 $4,746

Florida $86.1 1,502 $60.8 $82.4 $161.3 $4,454 $2,692 $14,533 $21,679

Georgia $33.7 666 $23.4 $34.4 $61.8 $1,591 $1,545 $5,706 $8,841

Hawaii $0.0 0 $0.0 $0.0 $0.0 $0 $0 $0 $0

Idaho $0.0 0 $0.0 $0.0 $0.0 $0 $0 $0 $0

Illinois $807.4 11,903 $587.7 $758.5 $1,576.7 $25,585 $23,223 $141,396 $190,203

Indiana $30.3 531 $21.6 $29.1 $57.8 $9,976 $6,647 $5,146 $21,769

Iowa $84.4 1,526 $57.2 $85.3 $148.5 $2,827 $2,515 $13,242 $18,584

Kansas $35.9 653 $25.1 $34.8 $66.6 $8,481 $5,900 $5,783 $20,164

Kentucky $33.0 631 $22.8 $32.2 $60.4 $3,297 $2,626 $5,255 $11,178

Louisiana $253.6 4,480 $180.8 $236.8 $480.4 $8,848 $9,217 $41,606 $59,671

Maine $65.6 994 $38.5 $57.9 $125.7 $2,975 $2,766 $10,387 $16,128

Maryland $295.9 4,571 $207.8 $279.4 $549.0 $9,602 $8,688 $47,378 $65,668

Massachusetts $331.5 4,308 $232.6 $312.1 $617.3 $8,845 $10,671 $53,507 $73,023

Michigan $80.0 1,272 $56.7 $76.0 $151.0 $2,372 $2,885 $13,222 $18,479

Minnesota $133.0 2,094 $93.4 $125.8 $248.3 $4,669 $5,282 $21,443 $31,395

Mississippi $22.4 466 $15.6 $22.1 $41.2 $1,691 $1,347 $3,617 $6,655

Missouri $172.3 2,952 $122.9 $162.8 $327.6 $4,759 $5,443 $28,533 $38,735

Montana $2.6 50 $1.8 $2.5 $4.8 $96 $89 $405 $591

Nebraska $48.9 936 $33.4 $48.3 $87.4 $10,091 $6,895 $7,561 $24,547

Nevada $0.0 0 $0.0 $0.0 $0.0 $0 $0 $0 $0

New Hampshire $34.2 525 $23.8 $33.1 $63.2 $1,334 $474 $5,445 $7,253

New Jersey $32.1 460 $22.7 $29.9 $60.9 $629 $947 $5,244 $6,820

New Mexico $21.6 415 $15.3 $21.0 $40.8 $929 $917 $3,547 $5,394

New York $425.3 7,035 $303.0 $404.7 $800.3 $27,559 $23,350 $73,102 $124,011

North Carolina $62.4 1,169 $44.0 $62.5 $116.9 $1,509 $2,183 $10,678 $14,370

North Dakota $0.0 0 $0.0 $0.0 $0.0 $0 $0 $0 $0

Ohio $231.0 4,150 $164.5 $227.6 $438.7 $10,030 $8,451 $40,067 $58,548

Oklahoma $50.1 988 $35.7 $50.1 $95.7 $1,207 $1,742 $8,599 $11,548

Oregon $47.7 844 $34.6 $45.4 $92.9 $1,241 $1,673 $8,320 $11,234

Pennsylvania $478.5 7,777 $347.3 $460.4 $933.0 $15,948 $13,525 $84,245 $113,718

Rhode Island $98.5 1,502 $67.1 $100.8 $177.1 $3,561 $3,114 $15,383 $22,058

South Carolina $37.4 700 $26.0 $38.0 $68.4 $1,072 $1,201 $6,222 $8,496

South Dakota $6.9 139 $4.9 $6.3 $12.9 $223 $130 $1,039 $1,393

Tennesse $34.3 608 $24.1 $33.3 $64.0 $970 $736 $5,601 $7,307

Texas $78.5 1,268 $56.9 $74.4 $153.8 $2,712 $1,558 $14,014 $18,284

Utah $16.3 302 $11.4 $16.0 $30.3 $430 $544 $2,686 $3,660

Vermont $22.8 405 $16.5 $21.7 $43.8 $894 $1,126 $3,718 $5,737

Virginia $231.7 3,899 $165.8 $224.0 $441.4 $6,003 $7,781 $39,673 $53,456

Washington $28.6 459 $20.5 $27.8 $55.0 $1,321 $1,035 $4,940 $7,297

West Virginia $7.0 133 $4.8 $7.0 $12.7 $211 $244 $1,119 $1,574

Wisconsin $32.1 559 $22.7 $31.3 $60.3 $1,133 $1,293 $5,415 $7,840

Wyoming $0.0 0 $0.0 $0.0 $0.0 $0 $0 $0 $0

Totals $4,804.2 77,762 $3,414.1 $4,592.2 $9,122.7 $210,285 $190,125 $812,526 $1,212,936

State

National Economic and Tax Impacts of Federal HTCͲrelated Investment by State, Fiscal Year 2014

Total Rehabilitation National Economic Impacts Tax Impacts

Costs (in 2014 $

millions)

Employment (in 2014 $ millions)

(jobs)

(in 2014 $ thousands)
ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014

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SUMMARY EXHIBIT 1

NaƟ onal Economic and Tax Impacts of Federal HTC-related AcƟ vity

FY 1978 through FY 2014 (HTC Investment: $117.6 billion in 2014 dollars)
ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014

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SUMMARY EXHIBIT 2

NaƟ onal Economic and Tax Impacts of Federal HTC-related AcƟ vity

FY 2014 (HTC Investment: $4.8 billion)
ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014

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Project Profi le

Historic Name: Cliff ord B. Connelley Trade School

Original ConstrucƟ on Year: 1933

RehabilitaƟ on Years: 2013-2016

Original Use: VocaƟ onal training school

New Use: Research space for companies in the energy industry 

EsƟ mated Total Project Cost: $49,850,000

Federal Historic Tax Credit 

 (HTC) Equity: $8,500,000

Other Financial IncenƟ ves: $16,600,000 of New Markets Tax Credit (NMTC) Loans

Property and Project Details

Energy InnovaƟ on Center (EIC), historically known as the Connelley Trade School (Connelley School), was 

constructed in 1933 on Bedford Avenue in PiƩ sburgh’s historic Hill District. The school consisted of a six-story 

academic block with a large shop facility located behind. The school was built in accordance with the SmithHughes Act of 1917, which was intended to separate vocaƟ onal training from strictly academic learning and 

focus on preparaƟ on for jobs and employment. As such, it served as an exemplary high school for decades, 

and prepared thousands of graduates for well-paying jobs throughout the western Pennsylvania region.

Energy InnovaƟ on Center

CASE STUDY #1

1501 Bedford Avenue, PiƩ sburgh, PA 15219

Exterior, before

Interiors, aŌ er; photos by Charlie Uhl, Heritage PreservaƟ on Services
ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014

11

The rehabilitaƟ on of the 160,000 square-foot school is being undertaken in two phases. SubstanƟ al work has 

been completed under the fi rst phase which involved the former shop facility and the fi rst-fl oor level of the academic block. These spaces are designed as offi ce space for research, development, and job training in the energy industry. The disƟ ncƟ ve “circular roadway” in the shop has been retained; a new roof installed; non-historic 

windows having been replaced in the shop; and uƟ liƟ es modernized, including installaƟ on of an extraordinarily 

complex and expensive HVAC system in the shop facility. The shop area is designed as space for training in the 

energy-effi ciency, construcƟ on, and alternaƟ ve-energy industries and an area for offi ces, labs, and classrooms. 

The project is creaƟ ng workforce development and job training programs for permanent employees and will 

be providing services to the local community such as job-readiness skill preparaƟ on for the unemployed, skill 

enhancement for operaƟ ng engineers, programs to prepare women and minoriƟ es for construcƟ on training, 

and conƟ nuing educaƟ on for apprenƟ ce operaƟ ng engineers.

Since its opening in 2014, the Center is becoming a place for collaboraƟ ve university-industry projects, proof-ofconcept energy technology demonstraƟ on laboratories, an early-stage business incubator, and targeted workforce training programs. Expected corporate partners, such as Penn State, University of PiƩ sburgh, and Carnegie Mellon, will be showcasing new products and deploy advanced energy management systems. As the EIC 

becomes fully operaƟ onal, it is also expected to be a catalyst for development in the surrounding Hill District. 

Project Budget

Sources of Funds Amount

Federal HTC Equity $8,500,000

NTCIC NMTC Loans $8,000,000

North Side Community 

 Development NMTC Loans $3,800,000

PiƩ sburgh Urban IniƟ aƟ ves 

 NMTC Loans $4,800,000

State and Local Grants $10,200,000

Managing Member Property 

 Value ContribuƟ on $8,350,000

Other Sources $6,200,000

Total $49,850,000

Community Benefi ts

Permanent Jobs: 364

ConstrucƟ on Jobs: 270

State & Local Taxes: $2.1 million

Gross State Product: $30.2 million

Uses of Funds Amount

AcquisiƟ on Costs $8,550,000

Hard Costs $34,120,000

SoŌ Costs $5,150,000

Reserves $2,030,000

Total $49,850,000
ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014

12

Knapp’s Centre

CASE STUDY #2

Project Profi le

Historic Name: J.W. Knapp’s Company

Original ConstrucƟ on Year: 1937-38

RehabilitaƟ on Years: 2012-2014

Original Use: Department store

New Use: Mixed-use for small business incubators, offi ces, retail, and mixed-income 

 apartments 

Total Project Cost: $35,738,773

Federal Historic Tax Credit 

 (HTC) Equity: $6.2 million 

Other Financial IncenƟ ves: $8 million of New Markets Tax Credit (NMTC) loans and $8.5 million in 

 State HTC equity

Property and Project Details

One of the fi nest examples of streamlined Art Moderne-style commercial architecture in the Midwest, the J.C. 

Knapp Company store opened in 1938 and operated as a major downtown Lansing department store unƟ l its 

closure in 1980. Individually listed in the NaƟ onal Register of Historic Places, the building was constructed of 

glass block, yellow brick, and blue-enameled steel and cast-in-place concrete composite panels known as “Maul 

MacoƩ a,” aŌ er the company that manufactured it. Subsequently used as government offi ces unƟ l 2003, the 

building remained vacant unƟ l its recent rehabilitaƟ on by the Eyde Company, a Michigan real estate fi rm headquartered in Lansing.

AŌ er, photo by James Haefner Photography

Before, photo by Quinn Evans Architects

300 South Washington Square, Lansing, MI 48933
ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014

13

Community Benefi ts

RehabilitaƟ on work included both common and innovaƟ ve soluƟ ons. Historic storefronts were rehabilitated; 

the glass block was replaced with new glass bock due to seal failures of the original units; and the blue-enameled steel panels, which had begun to rust through, were replaced with a new metal panel system matching the 

original’s brilliantly blue historic appearance. On the interior, energy-effi cient lighƟ ng and mechanical systems 

were installed, an atrium was created to bring natural light into the building, and the historic main stairs in the 

former retail space was retained and preserved. 

The Eyde Company rehabilitated the fi ve-story, 175,000 square-foot Knapp’s building into space for small business incubators, offi ces, retail, and residenƟ al space. Besides the Eyde Company, which relocated its headquarters to the building, commercial tenants include The Runway, a fashion incubator and retail showroom which 

also uses some of the historic store windows for display of apparel; Dewpoint, a leading IT systems integrator 

and technology consulƟ ng fi rm and Draper Eyewear, an eye care pracƟ ce that has operated in downtown Lansing for over 46 years. The fiŌ h fl oor and penthouse levels were converted into 23 residenƟ al units, covering 

23,233 square-feet, with both market-rate units and units targeted to households with incomes at 80% or less 

than the area median income. 

In 2014, the newly renovated and renamed Knapp’s Centre was offi cally opened. It joined other employers in 

the downtown area to enhance the pedestrian experience. As a result, they have generated greater demand 

for restaurants and entertainment establishments as well as for other services that support them. Its prominent corner locaƟ on is adjacent to Thomas Cooley Law School Library and within walking distance to the State 

Capitol, Davenport University, and Lansing Community College. The Knapp’s Centre is also on track to a greenbuilding cerƟfi caƟ on by The Society of Environmentally Responsible FaciliƟ es (SERF).

Project Budget 

Sources of Funds Amount

Federal HTC Equity $6,243,177

NMTC Loans $8,000,000

Managing Member Equity $7,843,947

Other Sources $13,651,649

Total $35,738,773

Uses of Funds Amount

AcquisiƟ on Costs $2,700,000

Hard Costs $23,466,455

SoŌ Costs $8,884,718

Reserves $687,600

Total $35,738,773

Permanent Jobs: 279

ConstrucƟ on Jobs: 198

State & Local Taxes: $1.9 million

Gross State Product: $24.2 million
Edward J. Bloustein School of Planning and Public Policy

Rutgers, The State University of New Jersey

Civic Square Building

33 Livingston Avenue

New Brunswick, NJ 08901

848-932-5475

Web: policy.rutgers.edu

Email: ejb@policy.rutgers.edu

Technical PreservaƟ on Services

NaƟ onal Park Service

U.S. Department of the Interior

Washington, DC 20240