Developers abandon $29M in tax credits

Developers abandoned $29.4 million in Rhode Island historic tax credits last month by failing to make progress on six approved projects, the R.I. Division of Taxation said Monday. More

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Developers abandon $29M in tax credits

Posted 6/3/13

PROVIDENCE – Developers abandoned $29.4 million in Rhode Island historic tax credits last month by failing to make progress on six approved projects, the R.I. Division of Taxation said Monday.

Combined with previously forfeited credits, the incentive pool for historic redevelopment projects under a proposal by Gov. Lincoln D. Chafee to restart the program for new projects using old credits is now $34.5 million.

Since the state historic tax credit program was frozen to new projects in 2008, there have actually been $55.3 million in credits abandoned, including $25.9 million as of last November.

But according to tax officials, using all of the abandoned credits would exceed the $299 million made available to pay for the program by a state bond issue in 2008. As a result, the pool has been limited to $34.5 million.

The General Assembly is discussing proposals to bring back some form of the historic tax credit program, with House Speaker Gordon Fox’s plan not relying on the pool of abandoned credits, but instead including a $5 million per-project cap.

Citing taxpayer privacy laws, tax officials did not release any information about which projects failed to meet the May 15 deadline to show they had spent at least 10 percent of their qualified construction expenses.

The report estimated that, should all $34.5 million in credits be put to use under Chafee’s plan, it would generate $138.1 million in direct construction spending.

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