Summary of Tax Incentives available for renovating historic buildings in Houston, Texas prepared by Anna Mod, Cultural Resources Specialist

INDEX OF TAX INCENTIVES

• CITY OF HOUSTON LANDMARK (LOCAL)
• COUNTY TAX EXEMPTION (COUNTY)
• SALES TAX EXEMPTION ON LABOR (STATE)
• INVESTMENT TAX CREDIT (ITC) - FEDERAL INCOME TAX CREDIT

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SUMMARY OF TAX INCENTIVES

CITY OF HOUSTON LANDMARK (LOCAL)

• PROCESS: Application is made to the Historical Preservation Officer  of the City of Houston for consideration  of Landmark Status for the building.  Completed application is reviewed by staff and presented to the Houston Archeological and Historical Commission (HAHC) for consideration.  HAHC meets monthly in a regularly scheduled meeting.  Upon their approval, the application goes then to Planning Commission and then to City Council.  City Council is the only entity that can grant a building landmark status.  The complete process to landmark a building can take as long as 6 months - plan early.  Once a building is a city landmark, a Certificate of Appropriateness (C of A) must be applied for and approved prior to any work on the building in order to qualify for the tax exemptions.
• BENEFITS:  A tax exemption of City of Houston taxes (Ad Valorem) of the improvement value for a period of 15 years is granted to locally desnigated landmark buildings that have an approved C of A. The value of the exemption could be as high as 100% of the City of Houston property taxes assessed by Harris County Appraisal District (HCAD) for 15 years for the improvement value.  To qualify, planned work to the exterior MUST be approved by the HAHC and the owner be granted a C of A, and the owner must spend at least 50% of the improved value establlished by HCAD (both exterior and interior costs apply to meeting the 50% threshold) which is the HCAD value established at the time work begins.
• EXAMPLE:  An improved tract of land is worth a total of $300,000, such as:

                          Improvement:        $100,000

                          Land:                       200,000

                          Total HCAD Value:  $300,000

       If the owner of this historic landmark designated building spends:

                  $ 50,000 on improvement = tax benefit of 50% of City Property Taxes for 15 years on $50k

                  $ 75,000 on improvement = tax benefit  of 75% of City Property Taxes for 15 years on $75k

                  $100,000 on improvement= tax benefit of 100% of City Property Taxes for 15 years on $100k

Once the work has been completed and/or the minimum amount is spent to qualify, the applicant may

apply for the Property Tax Exemption provided the project was granted a C 0f A.  Once HCAD has reass-

essed the improvement as a result of the rehabilitation work on the building, then the exemption applies

to the new improved value for 15 years.  Should the improvement value be increased by HCAD subse-

quently after the exemption is granted, the property owner must pay the property taxes on increases

thereafter during the 15 year exemption period.

SEE TABS IN UPPER RIGHT CORNER OF THIS PAGE FOR INFORMATION ON HARRIS COUNTY, STATE AND FEDERAL TAX INCENTIVES..... 

Houston Studios Building (under arrow) 1912

FOR INFORMATION

Contact: Dave Cook/Scott Miller

Cushman/Wakefield

713-963-2888

david.cook@cushwake.com

The 3-story building would make ideal office space for any business that wants large open spaces with a high-tech/industrial look.  Creative enterprises will especially appreciate the ambiance of the building.  Perfectly suited as office space for Architects, Advertising Agencies, High-Technology start-ups, a Downtown Medical Center, or support facilities for the Ballet, Opera or Alley Theater. It would also work great as a Fashion and Design Center with showrooms, offices and common-use areas for productions and displays. Trendy offices for brokerages or traders.  Employment Agencies...especially agencies dealing with high-tech jobs.  Any of these uses could be complimented by using the basement as a Jazz Club/Bistro at night and sharing the available parking.

ALTERNATIVELY, a downtown Entertainment Center could be created using the soundstage as a Performance Venue/Nightclub and the rest of the building for Shops, Bistros and Bars to support THE MAIN DRAW.