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Downtown and Village Center Tax Credit Program

Tax Credits to Vermont Property Owners and Lessees
to Enhance Historic Buildings in Commercial Areas

Agency Type:

State

Funding Source:

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Vermont Agency of Commerce and Community Development (ACCD) - Department of Housing and Community Development (DHCD)

Conf. Date:

05/11/21

Deadline Date:

07/01/21 Close of Business (4:30 PM)

Description:

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Tax credits to Vermont property owners and lessees for projects that enhance non-residential historic and older structures in eligible areas. The goals of the program are to create jobs, stimulate investments, restore buildings, and encourage revitalization in communities throughout the state. Eligible commercial or community buildings are located within a designated downtown or village center.

The Downtown and Village Center tax credit program helps to stimulate private investment, create jobs, restore buildings, and jump-start revitalization in Vermont communities. Successful projects range from small bed and breakfasts and rental apartments to multimillion-dollar downtown redevelopments. State income tax credits are available to projects that enhance the historic character and improve building safety of older and historic commercial buildings located in Designated Downtowns or Village Centers. Credits support general rehabilitation work, code compliance work, and exterior façade improvements, and may be combined with the federal program.

Description of credits available through the program:  

  • 10% Historic Tax Credit: Available only for approved Federal Rehabilitation Tax Credit projects. This credit is not capped; however, the first $500,000, and half of the costs exceeding $500,000, are eligible for the credit. Work must meet the Secretary of the Interior’s Standards for Rehabilitation (see Appendix C of the Guidelines: https://accd.vermont.gov/sites/accdnew/files/documents/HTC/2021_HTCGuidelinesandApplication.pdf#page=12).
  • 25% Façade Improvement Tax CreditAvailable for exterior repairs and/or improvements to the front (public) façade of a qualified building. Up to $100,000 in eligible costs for a maximum of $25,000 in credits is available. Projects eligible for the 10% historic credit above are ineligible for façade credits. Work must meet the Secretary of the Interior’s Standards for Rehabilitation (see Appendix C).
  • 50% Code Improvement Tax CreditAvailable for investments made to bring buildings into compliance with current building codes. Credit allocations are up to $75,000 for elevators, up to $50,000 for sprinkler systems, up to $60,000 for limited use/limited application elevators (LULAs) and up to $12,000 for lifts. Other code work to meet ADA requirements, electrical or plumbing codes, and the abatement of hazardous substances like lead paint and asbestos is eligible for a credit allocation of up to $50,000 for the combined costs of these improvements. Code credit projects must be inspected by state code officials or, where authorized, a municipal fire marshal or building inspector.

Eligible Buildings: Buildings at least 30 years old at the time of application, located within a Designated Downtown or Village Center, and not used as a single-family residence.

Preservation Standards and Design Considerations:

The Downtown Board assumes that some alteration of older or historic buildings will occur to
provide for contemporary use. However, the project must not damage, destroy, or cover materials or features
that help define a building’s historic character. General design guidance is provided in the Guidelines: 
https://accd.vermont.gov/sites/accdnew/files/documents/HTC/2021_HTCGuidelinesandApplication.pdf#page=4

GrantWatch ID#:

GrantWatch ID#: 172538

Estimated Total Program Funding:

$3,000,000

Estimated Size of Grant:

- Minimum Expenditure: Total project costs must exceed $5,000 for any of the tiers of credits to apply.
- Maximum Amount: Projects within a single municipality may not receive more than $780,000 in tax credits per fiscal year (or 30% of the total available cap).

Term of Contract:

Tax credits may be used in the first tax year in which the project or an identifiable phase of the project is complete (for example, code upgrades or a sprinkler system installed, inspected and in service). A copy of an approved tax credit certificate is submitted with the first tax return following project completion and may be carried forward on subsequent returns until the credits are exhausted or up to a maximum of nine years. Applicants forfeit their credits if they do not complete a project and claim the tax credit within three years from the date of its allocation.

Additional Eligibility Criteria:

Eligible Applicant: Owners or lessees of a qualified building may apply for credits, including non-profit organizations. Federal, state, and local governments are not eligible for tax credits.

Projects completed before July 1, 2021 are not eligible.

Limitations: Buildings receiving tax credits are ineligible for additional tax credits for two years from the date of the initial allocation. The sales tax reallocation program for Designated Downtowns may not be combined with any of the tax credits on the same project.

Projects using inappropriate man-made materials, that include incompatible window replacements, or that damage, destroy, or obscure historic features are ineligible for tax credits.

Pre-proposal Conference:

Applicants are also encouraged to register for a free Downtown and Village Center Tax Credit Applicant Webinar, scheduled for May 11, 2021 at 10 AM.

Register here: https://attendee.gotowebinar.com/register/5435316299417291533

If you are unable to attend the live webinar, a recording will be made available on the website following the event.

Pre-Application Information:

Applications are due July 1, 2021 by close of business (4:30 pm).

Applications are reviewed by the Vermont Downtown Board and decisions are made within 45 days.

Site Visits: To schedule a meeting, email or call Caitlin Corkins. Depending on your community, you will also need to work with the Department of Public Safety or a locally designated Fire Marshal and/or Building Inspector. Scheduling a joint meeting with state or local code officials and Downtown Program staff is the best way for applicants to identify appropriate design options that protect both life and safety and a building’s historic character.

Application Time Frames: Applicants are encouraged to apply before work begins; however, they may apply for work that is underway.

Combining Credits: The 10% historic and 25% façade improvement credits may not be used on the same project. The 50% code improvement credit may be combined with either the 10% historic or 25% façade improvement credit, provided the applicant does not claim credits more than once on any eligible expenditure. Applicants intending to use more than one category of credits must do so on a single application.

2021 Downtown and Village Center Tax Credit Applicant Webinar: https://outside.vermont.gov/agency/ACCD/transparency_rpt/_layouts/15/Lightbox.aspx?url=https%3A%2F%2Foutside.vermont.gov%2Fagency%2FACCD%2Ftransparency_rpt%2FAudio%2FDowntown%2520and%2520Village%2520Center%2520Tax%2520Credit%2520Applicant%2520Webinar2021.mp4

Contact Information:

Before starting your grant application, please review the funding source's website listed below for updates/changes/addendums/conferences/LOIs.

Applications should be submitted electronically to Caitlin Corkins at caitlin.corkins@vermont.gov.

Applications may be submitted in hard copy by mailing them to:
Department of Housing and Community Development
One National Life Drive
Davis Building, 6th Floor
Montpelier, VT 05620-0501

For questions regarding this program, contact Caitlin Corkins, Tax Credits and Grants Coordinator, at the email address above, or by phone at 802-828-3047.

Grant Coverage Areas:

URL for Full Text (RFP):

Geographic Focus:

USA: Vermont

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