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Providing tax support for legacy business building owners.
Providing economic support to building owners as part of a legacy business program helps to steady rental costs for legacy businesses and stabilize the physical spaces that house them. Maintenance and renovation costs, increased taxes, or real estate market pressures can strain building owners financially, directly threatening the displacement of legacy businesses through higher rents or building sales. Offering tax support initiatives like tax credits, abatements, or freezes can be powerful incentives for building owners to retain legacy businesses, especially when tied to or requiring long-term leases and rent control. Although not currently implemented in legacy business programs, the example shown outlines additional economic support that could be provided to your legacy businesses.
Tax Abatements and Freezes
While not currently used by legacy business programs, tax abatements or freezes could serve as a powerful economic support incentive for building owners to help prevent the displacement of legacy businesses. By temporarily freezing property taxes at current levels or reducing them through abatement programs, municipal governments could provide a powerful incentive for property owners who commit to maintaining long-term leases with stabilized rents to qualified legacy businesses. This approach provides a two-sided financial benefit: building owners receive tax relief, and business owners receive stabilized rents over long-term lease periods. While complex to integrate, providing tax abatements and freezes as part of your legacy business program could help you initiate and incentivize property stewardship that maintains historic businesses and preserves cultural heritage.
Commercial Property Tax Abatement Program | Falls Church, Virginia
The City of Falls Church, Virginia, offers a Commercial Property Tax Abatement Program for owners of commercial properties that are at least 20 years old who invest in rehabilitating or expanding their buildings. The property owners receive 100% abatement of the new assessed value of the property for five years, followed by 50% abatement for the subsequent five years. While the goal of this program is to create more available commercial property, a similar approach could be used to make commercial property available for legacy businesses.
Case in point.
Historic Preservation/Historic Property Tax Abatements and Credits
See the Historic Preservation-Specific Economic Support section of this website for more information on historic preservation tax credits and abatement programs.