If walls could talk, the Staples Pake Building at the corner of Royal and St. Michael streets would be buzzing with excitement about an ongoing project designed to breathe life into the 166-year-old building.
When completed, the project will provide the downtown area with two more floors of apartments and a ground floor of commercial space. According to Mike Rogers, the project’s general contractor, it would not have happened without the state’s historic rehabilitation tax credits.
The credits are important enough to Mayor Sandy Stimpson that his administration held a press event, along with officials with the Mobile Area Chamber of Commerce and the Downtown Mobile Alliance, to advocate for their renewal.
At the event, Stimpson said seeking a renewal of the credits from the state Legislature was a priority of what he called the “big five,” or a consortium of mayors from Alabama’s five largest cities — Birmingham, Montgomery, Mobile, Huntsville and Tuscaloosa.
“We all know what this can do to transform our downtown area,” Stimpson said. “The credit can be the difference between doing a project and not doing a project.”
Stimpson said he hopes the event will help create momentum with this week marking the start of the 2017 legislative session.
Downtown Mobile Alliance CEO Elizabeth Stevens said Staples Pake had been one of a few buildings downtown in a “death spiral” before its planned renovation. With tax credits and the vision of developers who can reimagine aging buildings, more spaces downtown can be saved, Stevens said.
The 25 percent credits, which are often paired with federal credits, are “vitally important,” Rogers said, not only for his current project but for historic structures throughout downtown.
“If you look at a lot of those buildings downtown … there are a lot of projects out there,” he said. “You look at the costs and many are too great for investment.”
For instance, Rogers said, the risks and “uncertainty” involved in redeveloping a historic property are greater than with a newer project. In addition, the costs associated with keeping historic guidelines can make a project less attractive, he said.
“It cushions that,” Rogers said of the credits. “At the end of the day, it makes for a more affordable project.”
Mobile City Councilman Levon Manzie, who represents the downtown area, said the credit was “key to revitalizing downtown” as well as other parts of Mobile. A revitalized city, he said, could “bolster the tax base” and “benefit the entire area.”
“You don’t have to look far downtown to see an example that this works,” he said.
Bill Sisson, president and CEO of the chamber, said the credit is an economic development tool and part of the chamber’s legislative agenda for 2017.
One particular area of interest, Sisson said, is innovation and entrepreneurship. The chamber hopes to grow startups through its Innovation PortAL, housed on St. Louis Street. The credit, he said, would help make the incubator more successful.
“We’re very blessed — the most blessed in Alabama — when it comes to having historic buildings,” Sisson said. “It’s a wonderful effort for us all to stand behind.”
But members of the local delegation have mixed reactions to the credit. Mobile State Rep. Chris Pringle and State Sen. Rusty Glover support the bill while Sen. Tripp Pittman, of Fairhope, remains cautious.
Glover, who was the only legislator to attend the city’s event, assured the crowd the bill to renew the credit “will pass.”
“The bill has strong support from both delegations in Jefferson and Mobile counties,” he said. “It’s a priority on our agenda in the 2017 session. I’m encouraged … to see swift passage. We want to get it passed and get it moving.”
Pringle said in a phone interview that he’s always been supportive of the measure and would continue to be. However, he said he doesn’t believe the credit should be extended indefinitely and should be used as it was originally intended.
“One of the problems is we give credits and don’t terminate them,” he said. “At a certain point, they need to recoup what they spent and start paying taxes. Do you really need a tax credit 20 years after you make your investment?”
Both Stevens and Pittman mentioned a legislative study commissioned on the historic preservation tax credit. Pittman said the study graded the initiative a “B” and he’d be in favor of a series of tweaks to get it to an “A” grade. Stevens criticized the study, saying it was commissioned too soon, only one year into the program.
Pittman, who at times has equated the credit to corporate welfare, has softened his stance a bit but still believes the credit, if renewed, should have a sunset date. He noted that the “subsidy” has been good for developers and cities.
“It’s a good deal,” Pittman said. “I don’t think any incentive needs to be permanent.”
The idea behind the incentive, Pittman said, was to spur revitalization, but if the credit is made permanent it defeats the purpose. He questioned whether it is truly still needed, but seemed supportive nonetheless.
“Is it really needed, or is it just icing on the cake?” Pittman asked. “Let them eat cake.”