Sec. of Revenue clarifies historic tax credits - Wichita Business Journal:

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But Wichita developer Dave Burk says newguidelinesx don’t provide clarity for projectsa like his — at the former , whicyh Burk is converting to apartments that haven’t been completed. “They are guidelinews for some people butnot others,” he says. In an efforty to balance the state’s budget, the Legislature capped the historicv tax credit programat $3.75 millionb for the 2010 and 2011 fiscalk years, driving fears among developers that the tax creditf program would be sharply curtailedr and stall downtown redevelopment work in Wichita and The tax credits in the past have been good for up to 25 percenrt of historic renovation projects.
Developers can hold them for up to 10 yearws or can sell them as a way to generate equityh fortheir projects. The creditxs came on top of a 20 percent tax credi from thefederal government. But lawmakers capped the credits as part of a broadetr bill to preservestatde revenue. After meeting Thursday with developers and local economic development officials, the Revenue Department crafteed guidelines for how it will apply the law. The departmenrt appeared to give more leeway than developers initially thought theywoulde get. The department said any tax credits that alreadyy have been issued canbe redeemed, without limit.
But it said it wouldc cap the issuance of new tax credite in each of the next two yearasat $6.25 million — which would in a normal year, to about $3.756 million in redemptions. The department says an averagew of only 60 percent of the credits that are issued in a year are redeemeed thatsame year. “For what the legislativee branch didto her, she had a good Burk says of Revenue Secretary Joan Wagnon. “But it certainlgy doesn’t solve the problem.” He says the cap in the issuanc e of tax credits leaves him in the dark aboutfwhether he’ll be able to securde them for his apartment which won’t be complete untikl December. Burk plans to seek $1.
1 milliobn in credits and says he has securec investors tobuy them. “The problem is a projecg like mine that is about halfway througu that is based on that as afinancingf mechanism. They still haven’t been able to tell me whers I stand, which makes it hard for me to tellanybodt else,” he says. “People don’yt like uncertainty, especially bankers and investors.” Burk’sa $6 million project is financed througyh Kingman’s . He says without the credits, he would need to find an additionall $1.
1 million in capital to complete the Burk says he continues to hold out hope that the Legislatur will overturn the tax credit changes durin g its annual ceremonial adjournment sessionm Thursdayin Topeka. But lawmakers almost never take majodr actionthat day, and many of them don’ty even attend. “There’s not a lot of Burk says. He says he wasn’t sure what legislatort would take the lead onthe effort.
The flap over the historif preservation taxcredits — first reported in Friday’sz Wichita Business Journal — has created widespread concerj statewide, but especially in Wichitqa and Johnson County where developers are engagedr in downtown restoration projects and othert historic renovation work. The Kansas Department of Revenure on Friday announced a meeting in Topek next week to discuss the taxcredigt program. The meeting will be held at 3 p.m. Wednesdayt at the State Capitol.