The City of Tacoma announced yesterday the Washington State Department of Community, Trade and Economic Development accepted recommendations from the City and the Tacoma Community Redevelopment Authority for $12 million in Commercial Revitalization Deductions (CRD) this year.
The CRDs were awarded to three commercial building projects in Tacoma.
Each year projects compete for $12 million in CRD allocations. The State of Washington awarded the allocations to:
— Fred Roberson, office building: $900,000
— Carrera GT, LLC, office building: $2.6 million
— Pacific Plaza Development, LLC, office building: $8.5 million
The benefits to these projects include a reduced federal tax bill and an increased ability to make their projects “pencil” by giving owners financial relief early in the projects when they incur the most expenses.
Tacoma is the only place in Puget Sound — and one of only 28 urban communities around the country — to maintain a U.S. Department of Housing and Urban Development (HUD) Renewal Community (RC) designation. With the designation, Tacoma businesses and developers within the RC area became eligible for a variety of federal tax credits and deductions through 2009. One of those is the Commercial Revitalization Deduction (CRD) allocation which allows property owners to use an accelerated depreciation schedule on their projects.
In addition to the CRD allocation available to property owners and developers, Tacoma businesses can also take advantage of the RC designation through other tax credits and deductions, including the RC Wage Credit, Increased Section 179 Deduction and Zero Percent Capital Gains. Unlike the CRD, these business tax incentives do not require an application. Instead, businesses can file the proper forms directly with the Internal Revenue Service.
The RC zone covers most of Tacoma’s downtown core, the Port area, Upper Tacoma and a portion of the City’s East Side. The RC designation replaces Tacomas former HUD Enterprise Community designation and is slated to last until Dec. 31, 2009. HUD ranked RC applicants according to their poverty, unemployment and low-income household rates on the 1990 Census.
Tacoma businesses and developers — both inside and outside the RC zone — can take advantage of more distressed community tax incentives than just those mentioned here. For more information, check HUDs Web site at hud.gov/cr or in IRS Publication 954 at http://www.irs.gov .
Commercial property owners, who are rehabilitating or developing their property, can apply for a portion of Tacoma’s $12 million Commercial Revitalization Deduction allocation. To get on the list to receive an application in for the 2008 CRD round, or for questions regarding the CRD or other Renewal Community tax incentives, contact Debbie Bingham, Community and Economic Development Department, at (253) 591-5117 or debbie.bingham@cityoftacoma.org.
