Historic and Mills Bill tax credits have been important tools for redevelopment across North Carolina. A recent post (here) profiled the use of historic credits on a redevelopment project in Durham, NC. Redevelopment of an historic structure can serve as a catalyst for revitalization and economic development in smaller communities as well, where mills were once the center of economic activity. Mills and other abandoned manufacturing facilities dot the landscape of small towns across North Carolina.
One reason that historic mill buildings sit vacant is that redevelopment costs can exceed the value of the property or the cost of a brand new development, and with that the amount of money a bank will lend or an investor will commit to a project. Tax credits increase the financial feasibility of redevelopment projects on historic or mill properties.
Monroe Hardware Warehouse, Monroe, North Carolina (pop. 33,475)
The Monroe Building was built in 1926. The building was the distribution center for Monroe Hardware, once located in downtown Monroe. After sitting vacant for more than 25 years, a team from Gastonia (“Downtown Pioneers”) approached the City with plans to convert the vacant mill space into a mixed use project including retail and residential. The redevelopment was completed in 2010. The total development cost for the project was approximately $6 million. Financing included Federal and State Historic tax credits, State Mills Bill tax credits and $1.25 million, 10-year loan from the City. The project includes 26 apartments and ground floor retail space, and has doubled the available downtown living options for Monroe residents. The property’s tax value is currently $4.7 million, prior to the redevelopment it was $200,000. According to the Assistant City Manager Brian Borne, the project is serving as a catalyst for further redevelopment downtown.
Emily Dorfman is a MBA student at UNC’s Kenan Flagler Business School.