NEWPORT CITY – Two downtown businesses are among 28 establishments to receive historic preservation tax credits from the state this year.
Lago Trattoria received $142,200 and the Tasting Center received $118,605. Newport City’s designated town status made the two business owners eligible to receive the tax credits.
Sen. Vince Illuzzi of Derby, whose committee has been a strong proponent of the credits, is delighted that some of the money is coming to Newport City. The credits, he said, encourages investments in historic downtown buildings and avoids sprawl.
Vermont business owners who applied for the credits competed for about $1.8 million.
“It’s highly competitive,” said Caitlin Corkins, Tax Credits and Grants Coordinator for the state. “We had about $3 million that was requested. There were some really worthy projects that didn’t get funding.”
The Downtown Designated Board evaluated each request. The board looked at community need, job creation, financial need, and the status of each project. The board also had $500,000 to allocate to businesses that suffered damage from Tropical Storm Irene.
The tax credit is a dollar for dollar. A business that has a $20,000 tax credit gets $20,000 off its business' income tax liability. Businesses that receive tax credits may keep or sell their credits. The buyer, usually a bank, will typically buy the credit at less than face value.
The credits, said Corkins, encourage investment in the rehabilitation of downtown businesses, which ends up paying for the tax revenue. Some buildings are currently empty or partially empty. The projects will generate tax revenues with the purchase of goods and services and by employing people.
“It’s an allocation appropriated by the legislature,” said Corkins. “It’s not like an appropriation for a grant or something. It’s not a pot of money that’s not being given away. Basically it's taxes that aren’t coming in.”
Frank Richardi, owner of Lago Trattoria, has plans to renovate the second floor of his restaurant into a boutique hotel and add a roof top bar. The total cost of the project is about $1,010,200, which entails installing an elevator and sprinkler system, and doing façade and window work, all while keeping the building in its historic state. The tax credits help lessen the cost of the work. Richardi is following strict guidelines to keep his building historic and is not receiving an actual check from the state.
Richardi’s project will bring upwards of 11 full-time and part-time jobs. He plans to begin in the spring and have his project complete by fall of 2013.
Eleanor Leger, manager of the Northeast Kingdom Tasting Center and president of Eden Ice Cider Company, plans to renovate and open the business in a vacant storefront. The money, she said, will help cover the cost of installing an elevator and sprinkler system, renovating the storefront and updating the infrastructure, like the plumbing and wiring. The project will cost $920,000.
Leger also has plans to move the winery operations to the basement of the building. She hopes it will be up and running by late January. Leger predicts the first part of the tasting center will open in May or June.
The announcement for the tax credits was made at a press conference in Barre Monday.
“This is huge,” said Trish Sears, executive director of the Newport City Renaissance Corporation. The tax credits remind other businesses and other property owners of opportunities to improve their properties and bring them to code. “This is a great way to take care of our historic buildings that is manageable and affordable for the local landlords.”