Community Renewal Good Stories - Tacoma

Information by State  Print version

Tacoma RC Maximizes Use of Commercial Revitalization Deduction

Tacoma, Washington, RC

Just a year into its RC designation, the Tacoma, Washington, RC had received requests for more than double the amount of tax relief available. Applications for CRD allocations exceeded $26 million. This deduction, limited to a combined total of $12 million each year for projects in the RC, saves property owners thousands of dollars annually by allowing them to use a rapidly accelerated depreciation schedule.

Tacoma was the only community in Puget Sound-and one of only 28 urban communities around the country-to receive a HUD RC designation in 2002. The State of Washington, following the recommendation of the Tacoma RC, awarded CRD allocations to five firms:

•  Albers Mill building (Albers Mill LLC), $3.9 million.
  
•  Courtyard Marriott Hotel (Hollander Investments, Tacoma Hospitality LLC), $3.2 million.
  
•  Rainier Pacific Bank Building (Rainier Pacific Bank), $3.1 million.
  
•  Ted Brown Music Building (Broadway Center Investors LLC), 1.3 million.
  
•  Fraternity Hall (Roberson Building Co.), $0.5 million.
  

Each of the projects will benefit from a reduced Federal tax bill. The RC's ability to provide financial relief early in a project, when a large number of expenses are incurred, is a distinct advantage. Albers Mill LLC, for example, will be able to deduct its $3.9 million in construction costs evenly over just 10 years instead of the normal 39 years. This will yield thousands of dollars in annual tax savings for the company.

In addition to the CRD allocation, a business in the Tacoma RC can take advantage of RC employment tax credits, Increased IRS Section 179 Tax Deductions, and zero-percent capital gains when it sells property after holding it for at least 5 years.

The RC 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 Tacoma's former HUD Enterprise Community designation.

For more information on the programs of the Tacoma RC, contact Renewal Community Coordinator Debbie Bingham at (253) 591-5117