PRESERVING CREDITS
Historic tax credits deemed safe; threats put First National redevelopment at risk
Federal and state historic tax credits are seen as being safe following serious threats on the program last fall that could have resulted in abandonment of the $250 million redevelopment of downtown Oklahoma City’s First National Center.
U.S. Sen. Jim Inhofe, Mayor David Holt and Greater Oklahoma City Chamber President Roy Williams joined developer Gary Brooks on a tour of the landmark Wednesday afternoon, where they saw floors cleared of debris and asbestos and plans for redevelopment of the building’s vault and Great Banking Hall.
Built in 1931 at Robinson and Park avenues, the former home of First National was closed in July 2016 as it went into receivership and was purchased by Brooks and partner Charlie Nicholas the next year. The building is being redeveloped into 145 hotel rooms, 193 apartments, 700 parking spaces and several restaurants, bars and shops.
To get the job done, the developers needed a mix of historic tax credits ($70 million), tax increment financing (about $45 million) and other assistance. Brooks confessed to feeling “sheer terror” when the U.S. House of Representatives proposed a budget last fall that eliminated all federal historic tax credits.
“We knew the only way to bridge the gap was through historic tax credits and assistance from the city,” Brooks said. “Fortunately, the discussion at the nation’s capital started after we bought the building. Had it started before, we might not have had the courage to close. It was that important.”
Loss of the historic tax credit program, Brooks said, likely would have led to abandonment of
the project.
“We probably would have sold the building,” Brooks said. “We would have taken a $15 million to $20 million loss and walked. There is no solution to that. There is no way to fill that gap.”
Fighting to keep the credits
Inhofe, himself a developer in Tulsa in the years before he was elected that
city’s mayor and then was sent to the Senate, told Brooks he has observed how the historic tax credits have been used in Oklahoma City to restore landmarks like the Skirvin Hilton and similar properties throughout the state.
“When the U.S. House came out with the tax bill, the credit was eliminated,” Inhofe said. “And we got to work on restoring it. People like things like this. What Gary is doing for the city, with the help of the mayor and the city, is going to add a lot of beauty and livability to the culture of Oklahoma
City.”
The threat to historic tax credits has placed the program on the top five incentive programs defended by the chamber. Holt, who was a state senator before he was elected mayor earlier this year, said he has fought similar efforts to kill state historic tax credits.
“It was at its worst a few years ago when there was one state legislator from Oklahoma City who was in charge of a lot of tax policy and he really hated these historic tax credits,” Holt said. “But it prompted people to defend them and
make their arguments. It was a good thing and the right side won.”
Both Inhofe and Holt say they believe the threat against historic tax credits has subsided.
An economic impact study by Place Economics and commissioned by the Tulsa Foundation for Architecture, created in response to threats at the state level in 2016, reported Oklahoma's rehabilitation tax credit attracted more than $520 million in investments, and was directly responsible for the creation of more than 3,000 jobs.
Seventy-seven historic building renovations have been completed statewide using the credits, directly generating 3,232 jobs, with another 3,514 jobs linked to the tax incentive. Those jobs meant $166,939 in direct salaries and wages, with indirect and induced wages totaling $142,869.
“The matter is resolved and the case has been made,” Holt said. “But we need to stay diligent. And what we’re learning from Sen. Inhofe is some of your greatest acts is stopping bad things from happening.”