There are a number of specific incentives for owners or developers of historic properties in Tacoma, including development incentives, low interest loans, and property and income tax incentives.
Transfer of Development Rights
The City’s Transfer of Development Rights (TDR) program allows designated Tacoma Landmarks to transfer their rights to the development of their property as a TDR certificate to the owners of a property more suited to development.
A TDR transaction benefits all parties involved. For example:
- The seller may sell their development rights for monetary gain or other financial considerations.
- The buyer could gain more development potential than zoning would otherwise allow (i.e. greater building height, etc.)
How It Works
As the property owner you decide to transfer development rights, meet with staff, then submit an application for issuance of development rights. Sending site criteria can be found in TMC1.37.
Please contact the Planning and Development Services Department for help determining sending site eligibility and a description of the procedures.
TDRs may not be sold until a conservation easement is in place.
The transferable floor area from Tacoma-designated landmarks shall be the maximum square feet of floor area achievable within the area’s zoning and other applicable codes minus the floor area of the designated landmark.
The sending building must be on the Tacoma Register of Historic Places.
Historic Rehabilitation and Repair Loan Program
The Historic Rehabilitation and Repair Loan Program (HRRLP) is designed to encourage the rehabilitation, preservation and adaptive reuse of commercial and retail buildings that are listed on the Tacoma Register of Historic Places. This program provides gap financing, which is used in combination with the borrower's other financial resources.
In all cases, borrowers must demonstrate the ability to repay the loan and provide sufficient security.
How It Works
The HRRLP is administered by the Tacoma Community Redevelopment Authority (TCRA) and staffed by the City's Community and Economic Development.
Loans are made available on a reimbursement basis up to 50% of the approved project costs.
Loans carry an interest rate equal to the ten-Year U.S. Treasury Note plus 100 basis points (1%) with principal and interest payments due monthly for a maximum term of ten years.
For more information, contact Jacinda Howard at (253) 591-5221 or email@example.com.
- Property must be a commercial or mixed use building that is listed on the Tacoma Register of Historic Places.
- Business tenants must have a lease term equal to the proposed loan term, and must have owner consent.
- Work must be approved by the Historic Preservation Officer.
Special Tax Valuation
Through the Special Tax Valuation Program, property owners who complete a substantial rehabilitation within a period of two years may benefit from reduced property taxes for a period of ten years.
How It Works
Qualified expenses rehabilitation projects that meet the requirements are subtracted from the property assessment each year for ten years. Property taxes are still paid on the balance. In some cases, a project's costs may exceed the assessed value of the property for several years. This will negate property taxes.
This special valuation of the property offsets potential increases in taxes caused by building improvements and helps owners regain their investment. Special Valuation may be applied for repeatedly as long as the requirements are met and the qualified expenditures do not exceed the assessed value of the property.
Expenses claimed must associated with the historic rehabilitation and must occur within a building's original envelope. Additional requirements include:
Buildings in historic districts are usually eligible. Historic properties not already listed on the Tacoma Register of Historic Places can be placed on the Tacoma Register though a nomination and review process.
- Property must be listed on the Tacoma Register of Historic Places.
- Rehabilitation costs must equal at least 25% of the assessed value of the building prior to renovation.
- All project costs must fall within a working period of 24 consecutive months.
- Qualifying rehabilitation expenditures include the costs associated with design, materials, and construction necessary to bring a building to a state of modern convenience. This excludes costs associated with acquisition of the property or for work to expand the building's size.
- The project must meet the Secretary of Interior's Standards for Rehabilitation of Historic Buildings.
- Renovations must not adversely affect the building's historically significant character defining elements.
Federal Historic Rehabilitation Tax Credit Program
The Historic Rehabilitation Tax Credit (HRTC) program is a one-time federal income tax credit for the costs associated with the rehabilitation of historic buildings. It is jointly administered by the National Park Service and the Internal Revenue Service (IRS.)
The most commonly used tax credit is the 20% credit for income producing properties.
The Washington State Department of Archaeology and Historic Preservation (DAHP) coordinates projects using the federal HRTC.
- Property must be listed on the National Register of Historic Places.
- Property must be a building.
- The rehabilitation must meet the Secretary of Interior's Standards for Rehabilitation of Historic Buildings
- The design must be approved by the National Park Service in advance.
- Property must be an income producing property.
- Property must not be the applicant's primary residence.