Mill Conversion - Historic Tax Credits

Historic Tax Credits

Often, parking, utilities and other infrastructure need to be upgraded as part of the mill conversion process. Many of the old industrial sites contain levels of contamination, which can be very costly for the developers to mitigate.

In recent years, many states have enacted Historic Tax Credit programs in an attempt to enable the rehabilitation of older structures deemed to be "historically significant". Typically, the major criteria for this determination is a listing with the National Register of Historic Places, usually followed by a review by state and local agencies. The development companies typically utilize the tax credits to offset the usually expensive process of renovation and site cleanup.

An example of a Mill conversion utilized by the use of a state historic tax program is the Royal Mills in West Warwick, Rhode Island, redeveloped by SBER a Baltimore-based company with a long history of historic preservation projects. This mill had sat vacant for many years, and was in serious threat of being demolished. The site has since successfully been converted into residential apartments, situated on the Pawtuxet River with a walking trail and bike path nearby.

While recently suspended due to the State's budget crisis, Rhode Island's Historic Tax Credit Program was deemed as one of the most successful in the nation, enabling hundreds of historic structures across the state to be preserved over the past several years since it was enacted.

The benefits historic tax credit programs to state budgets have been often controversial, but there are many indirect economic benefits to local communities.

The property tax value of a restored mill it typically about ten times greater than the existing underutilized mill building, and there is also the added benefit of many construction jobs and other services during the renovation process. The intangible value of having a historic factory building preserved for future generations to enjoy, as well as the benefits to the community are often harder to calculate. The restored mill buildings often become the focal point of the community.