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Saving the Randolph before Congress acts

South Boston News
The Randolph Inn / November 22, 2017
A developer working with the Town of South Boston to revive the John Randolph Hotel is racing against the clock to secure historic tax credits for construction before Congress acts to eliminate the program.

Hal Craddock, a Lynchburg architect best known for spearheading the restoration of the Craddock Terry Hotel in downtown Lynchburg, has been working with town officials to carry out a similar project with the Randolph in downtown South Boston. Craddock said this week he is scrambling to complete an application for the Federal Historic Tax Credit program to submit before the end of the year.

The haste is necessary as Congress eyes elimination of the FHTC subsidy program as part of its overhaul of the federal tax code. Historic tax credits are on the chopping block as Republican lawmakers search for sources of revenue to offset a $1.5 trillion tax plan that lowers corporate tax rates and showers other benefits on individual payers. The U.S. House of Representatives has passed a tax bill that eliminates the Federal Historic Tax Credit altogether.

“The HTC is used by South Boston to attract developers, and many of our revitalization projects, like the planned renovation of the John Randolph Hotel would not happen without it,” said South Boston Town Manager Tom Raab of the program’s importance to the area.

The federal credits are being counted upon to generate roughly $2 million towards the cost of renovating and expanding the Randolph to serve as a modern, boutique downtown hotel. Plans call for opening a 27-room, three-story inn with a first floor restaurant and a rooftop bar. The planned start of construction is targeted in 2018.

In addition to the Federal Historic Tax Credit program, the project will rely on outside grants and loans. The Virginia Tobacco Commission has awarded $600,000 for The Randolph, and the Governor’s Office has furnished $475,000 through the state Industrial Revitalization Fund. Raab has estimated that $5 million in grants and loans are available for the project, the overall cost of which he has pegged at $8 million.

In the context of those numbers, Craddock said it was essential to claim the roughly $2 million in available historic tax credits before the federal program can be axed in Washington. “If I get Part II of my application in before the [tax] bill becomes law, this project will be grandfathered.” Otherwise, Craddock said he has no incentive to move forward.

Ed Gaskins, another developer who specializes in renovating old buildings — his company is currently finishing the Imperial Lofts apartment project at the site of old Tultex Mills plant — has been working with town officials on The Randolph in an advisory capacity. Gaskins called the downtown hotel restoration “a complex project” that becomes “even more complex with the elimination of that program.

“You’re effectively moving the goalposts further from its current status,” said Gaskins. “It’s a prime example of the type of project that depends on historic tax credits for economic viability.”

In the past 14 years, the Historic Tax Credit incentive has attracted almost $32 million in investments for South Boston, resulting in the preservation of seven historic buildings including the tobacco warehouses now used by The Prizery, the Southern Virginia Higher Education Center, The Innovation Center, and the New Brick Exchange Lofts. The program also was used by Gaskins, the Tultex building developer, to renovate the old Halifax Elementary School building as market-rate apartments.

For his part, Craddock has relied on the program to finance construction of Lynchburg’s Bluffwalk Center, home to the Craddock Terry Hotel, apartments and restaurants. When he purchased two falling-in buildings in downtown Lynchburg, Craddock said he was paying $638 per year in property taxes. Today, the Bluffwalk Center generates considerable revenue for the city with its boutique hotel, apartments and restaurants. “In the last three years I’ve paid over $540,000 in all taxes — property, income, meals and lodging,” said Craddock.

His other projects over two decades in the restoration business include the 1901 Anheuser Busch factory in Lynchburg — converted into office space — and a boutique hotel and restaurant in the southwestern Virginia town of St. Paul.

Craddock said the federal tax credit program is one of the biggest reasons Virginia has brought back downtowns that were hurt when textile and tobacco industries folded up. The Historic Tax Credit (HTC), introduced by the Reagan administration in 1981, provides a 20 percent tax credit for the revitalization of historical buildings that have fallen into disrepair. Paying out only after the project has finished, the program generates approximately $1.20 in tax revenue for every dollar spent, according to the National Trust for Historic Preservation.

The House tax bill eliminates the program, while pending legislation in the Senate spreads the redemption of the credits out over five years. Craddock said the Senate approach is tantamount to killing the program: “99 percent of these tax credits are sold to corporations who use them to offset passive income. They want to use the credit immediately, in the first year. Take that away and these projects stop.”

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The people that own this building should never have let the place fall apart. Now they want tax monies to fix up trash property. Tear It Down.


Just thinking.......I would like to know if this information is public =
who owns all the vacant buildings on Main Street in Halifax and South Boston. Do the owners have to pay taxes each year? And who is responsible if there is an accident, say a chunk of cement on the outside falls and badly hurts people that may be walking on the sidewalk.

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