NYLO Hotels has formed a partnership with Don Landry of Top Ten hospitality advisory company and Campo Architects to help developers maximize incentives for restoring historic structures. "The tax credit for rehabilitating historic buildings can offset the equity developers must put up behind a project by millions of dollars," Landry says. Developers who qualify and spend $25 million rehabilitating a property, for example, could get a $5 million tax credit on top of other tax deductions for the property.
In the current credit crisis, developers are finding difficulties in securing reasonable financing. Lenders have tightened credit standards, typically requiring 40 to 50 percent equity in commercial projects. Through a combination of state and federal tax credits, developers can offset that amount, bringing it closer to the pre-recession norm of 20 percent, according to Landry.
"Many of the buildings that qualify for historic preservation and other tax credits are in prime locations, such as New York, Los Angeles, Chicago, Miami, and New Orleans, to name just a few," says John Russell, CEO of NYLO Hotels. "By working with Top Ten and Campo Architects to develop a comprehensive repositioning strategy, NYLO reduces project costs and opens the door to development in high-barrier markets."
