Developers may soon get a big tax credit if they renovate and reopen blighted buildings under a bill that passed the South Carolina House this week. The “Abandoned Buildings Revitalization Act” is now headed to the state Senate after a unanimous vote Wednesday.
It would give a 25 percent tax credit to businesses that invest at least $500,000 in a building which has been abandoned for five years or more.
Rep. James Smith (D-Columbia) cited a study from the Strom Thurmond Institute that found the law would create $20 in revenue for every dollar of credit. “These buildings are either not on the tax rolls or are on the tax rolls at a very low value and there’s no activity,” he told South Carolina Radio Network, “We’re going to change that and we’re going to ultimately see greater revenue for the communities in our state.”
AUDIO: Rep. Smith talks about “Abandoned Buildings Revitalization Act” (5:01)
Revitalization of abandoned buildings is a particularly sensitive issue in Smith’s home city. Columbia is working on a major development project in its downtown that would involve several buildings on a former state mental hospital campus. A similar bill by Smith last year would have given tax incentives to companies that restored old government buildings. That version failed to gain traction in the Senate after some members complained it would unfairly make government real estate deals more attractive to developers.
Smith says he supported the concept behind the tax breaks even before Columbia took action on the former hospital. He pointed to the success of a similar 2010 tax credit for companies that renovated abandoned textile mills.
“We’d like it to be at least equally competitive to renovate and restore an older building as it would to build new,” Smith said. “I think it will help to focus development in these downtown Main Street corridors.”
The bill now heads to the Senate.