via @joeflech @alextdaugherty
Behind the signature Miami pastels, perfectly symmetrical facades and terrazzo floors that give South Beach’s rich stock of Art Deco buildings its distinctive flavor, one section of the U.S. tax code fueled the rehabilitation of these once-crumbling structures.
As part of a sweeping tax overhaul, Republicans in Congress could eliminate the historic tax credit — a move that is upsetting local preservationists and developers who say the credit is an essential factor in the financial formula that keeps these decades-old buildings standing.
The tax plan passed by the House of Representatives on Thursday eliminates a 20 percent historic preservation tax credit. The tax plan under debate by the Senate currently keeps the tax credit, though it could be changed.
Locals who fight to save historic buildings and developers who take these buildings on as restoration projects agree that reducing the incentive would hamper future rehabilitation of Miami and Miami Beach’s historic architecture.
“In the development community, we take advantage of this,” said Sandor Scher, principal of Claro Development. “This is a real incentive.”
Claro is planning to rehab and reuse several late-era Deco and Miami Modern buildings in the redevelopment of Ocean Terrace, a block along the city’s north shore. Scher plans to apply for historic tax credits to help finance the project, which is currently under review by the city planners.
The credit enables developers to save on taxes and spend more on costly rehabilitation projects that preserve the facades of historic buildings while renovating the rest of the structure to make it economically viable.
Hotelier Alan Lieberman helped shape South Beach’s character through several historic restoration projects that met the stringent requirements set forth by the National Park Service, which runs the tax credit program and approves projects based on how faithful a restoration is to the building’s original look.
Lieberman’s company, South Beach Group Hotels, has preserved archetypal Art Deco hotels in the city’s tourist center, including the Collins Plaza Hotel, the Chesterfield and the Catalina Hotel and Beach Club. He said historic hotels are good for business because guests appreciate the uniqueness of the architecture.
So do people who live in the Beach, a rare intersection between tourism and resident interests.
“We take the buildings for granted,” Lieberman said. “It’s really nice, it’s interesting and it’s comfortable. People love historic buildings.”
At least one member of the local Congressional delegation agrees and hopes the final bill will leave the tax credit untouched when it comes to a vote.
“I will vote for this monstrosity with the hope that many of these things will get taken care of once the bill comes back and we have a conference and people come to their senses,” said Rep. Ileana Ros-Lehtinen, R-Miami, of the House bill. But she did not rule out voting against the final bill if enough changes aren’t made.
“Preservation is so important in my congressional district, not only in the Gables but in Miami Beach. Oh my gosh, those beautiful Art Deco hotels and homes,” Ros-Lehtinen said. “We want to preserve them. I’m not in favor of doing away with those deductions. Why take it out on the little guys like that?”
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