by Bill Knowles
TRINIDAD — The Trinidad Opera House has received a preliminary approval letter from the Colorado Office of Economic Development and International Trade (OEDIT) and History Colorado in the amount of $525,000 for the rehabilitation of the Trinidad Opera House, one of 13 properties throughout the state to receive the notices.
The approval is part of the new Commercial Historic Preservation Tax Credit Program initiated by the State and Federal Government allowing tax credits for rehabilitation projects. The program is spread across eight Colorado counties. The projects, under the program, will be able to take advantage of the new transferable state income tax credits that are part of the Job Creation and Main Street Revitalization Act.
In the application to ODEIT, the current owner of the opera house, Dan Wilhelm, indicated that the plans for the opera house involved building a boutique hotel and other commercial spaces in the building. His plans have been approved by OEDIT.
According to a press release, Colorado State Historic Preservation Officer Steve Turner said the projects that have been approved span throughout Colorado and reflect the diverse historic preservation needs of the state. “The goal of the new tax credit was to not only restore and preserve historic commercial buildings in Colorado, but also to provide an opportunity to stimulate economies across the state.”
The projects cover a wide and diverse range of uses, which will provide public benefits from boutique retail, multi-family residential and office space, to industrial and tourism.
The program is budgeted with $38 million over the four years it covers. For 2016, $5 million has been budgeted, with $10 million budgeted for 2017.
When a rehabilitation project has been completed, the owner files a request for the tax credit. The request is sent to History Colorado, who decides if the rehabilitation is consistent with its specifications of historic preservation. If approved by History Colorado, the application is then sent to OEDIT for approval.
The tax credit is calculated as a percentage of the actual qualifying rehabilitation expenditures. The percentage applied depends on two things: the actual amount of rehab expenditures and whether the structure is located in a recognized disaster area or not.
The following rates apply: in a regular area the first $2 million will see a 25 percent credit. If the rehabilitation is in a disaster the first $2 million will see a 30 percent tax credit.
Anything over $2 million will get a 20 percent credit in a regular area and 25 percent in a disaster area.
These percentages are added together, so a property not in a disaster area with $3 million in actual rehab expenditures would be eligible for a tax credit of $700,000 ($500,000 for the first $2 million, plus $200,000 for the amount over $2 million). The tax credit is based on the amount of actual qualifying expenditures, even though the reservation is based on the estimated expenditures.
The tax credit is a credit against Colorado income taxes. The credit is issued to the owner of the property when construction is complete and approved. The credit can be carried forward ten years, and any unused portion of the credit can be sold to third parties. If the owner chooses to sell the credit, both the owner and the purchaser of the credit must coordinate their transaction through the OEDIT website. After ten years, any unused and unsold credit will expire and cannot be refunded.