SCOTT DETROW, HOST:
Pennsylvania is packed with historic properties dating back to colonial times, but for years, there had not been much state tax incentive for historic rehabilitation efforts. That's changing, as Aaron Moselle with member station WHYY reports.
AARON MOSELLE, BYLINE: Developer David Waxman is standing outside a historic brick building that spans an entire city block in Philadelphia. The hulking property was a brewery until Prohibition. It later became an armory and eventually a warehouse before returning to its sudsy roots as a brewery again for a time. When Waxman's company bought it in 2019, it had been vacant for nearly two decades.
DAVID WAXMAN: It was blighted, and, you know, another year or two of sitting, it probably would have been beyond repair and torn down. And so then you would have this sort of gem that spoke to the history of the neighborhood gone and replaced with, you know, probably what we like to call spaceship buildings, you know, these new-build mid-rises with 10 materials on the facade.
DETROW: With the renovations, the property is now home to more than 100 apartments and a handful of businesses. The development was helped with tax credits offered by the state for rehabbing historic properties. Waxman says the subsidy helped his company borrow money for construction.
WAXMAN: It's very challenging in this market to get these projects financed. So any kind of subsidy that you can layer on is extraordinarily helpful.
DETROW: Pennsylvania is now in a position to offer more developers the same opportunity. Even though it ranks in the top states for historic sites, some other states have offered more tax relief for preservation. But in early July, lawmakers raised the budget for historic preservation tax credits from $5 million to 20. State Senator Nikil Saval, a Philadelphia Democrat, introduced the legislation.
NIKIL SAVAL: The net result will mean that a lot of buildings that are loved or people want to see loved more will get reused and turned through adaptive reuse into parts of our communities and also help revitalize some of those communities.
MOSELLE: Robert Powers leads a Philadelphia consulting firm that specializes in historic preservation and rehabilitation. He says he's watched developers skip over Pennsylvania and go elsewhere because they knew there were more tax credits to dole out.
ROBERT POWERS: We've had a number of projects in Ohio that have moved forward with, you know, developers who do work in this area but are not doing work in Pennsylvania. So it says how attractive those credits can make a project.
MOSELLE: Ohio budgets for three times as much tax relief for historic renovation. And in Pennsylvania, of the $20 million available, individual projects can only receive up to $500,000 each. In nearby states like New York and New Jersey, developers can apply for tax credits worth twice that.
NANCY GEPHART: Just for context, this is going to be the lobby. It is a two-story atrium. It used to be the lobby of the bank itself.
MOSELLE: Nancy Gephart is showing me around a massive empty building that's stripped down to the studs. The Art Deco structure in Philly is formerly known as the Beury Building. Gephart's company wants to transform this 14-story, graffiti-tagged eyesore into a regional hotel. She says a more robust tax credit program could help push the development past the finish line if the state offered bigger subsidies.
GEPHART: And it would just help us to demonstrate to lenders that we're really doing this project in concert with the city and the state and the community, and everyone has bought into the idea.
MOSELLE: She hopes lawmakers feel the same way about preserving Philadelphia's history. For NPR News, I'm Aaron Moselle in Philadelphia.
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