Gov. Henry McMaster Signs Abandoned Buildings Tax Credit Bill into Law
COLUMBIA – Governor Henry McMaster today was joined by members of the General Assembly and local business leaders for a ceremonial bill signing of S. 1021, which extends the Abandoned Buildings Tax Credit through 2035 and increases the maximum tax credit that can be earned in a year from $500,000 to $700,000, further incentivizing investment in vacant buildings across South Carolina.
"Tax credits and tax cuts are among the most effective economic development tools we have as a state," said Governor McMaster. "By providing this tax credit, we encourage developers, business owners, and entrepreneurs to breathe new life into once-neglected properties. This will have a ripple effect in the areas around them, preserving our history, creating new jobs, and helping to bring even more pride to our communities."
“South Carolina is the only state in the nation with an Abandoned Buildings Tax Credit. We care about our history,” said Senator Tom Davis. “It may be cheaper to bulldoze an old building and ruin its character, but there is a value to rehabilitating and revitalizing.”
Additionally, it creates a new corporate income tax credit for railroads based on qualified railroad reconstruction or replacement expenditures. The credit is worth 50% of the qualified railroad construction or replacement, up to $5,000 per mile of track replaced or repaired.
“Every restored building is a step toward a more vibrant, prosperous South Carolina,” said Representative Micah Caskey. “We are taking a proactive stance on safety, ensuring our towns and cities are not just beautiful, but also secure places for our families and businesses.”
-###-
THE BILL here.
When Andrew Baumgartner was looking to open a bar in 2017, he thought the buildings were perfect. Not only were they just across the river from the state’s capital city, but they had a lot of character, he said. At the same time, though, he knew refurbishing them would be expensive.
“The numbers simply didn’t work, especially for a project of this scope,” Baumgartner said Wednesday.
That was, until the Legislature extended its tax credit for abandoned buildings in 2018. Using close to the $500,000 maximum for each of the three buildings on the property, Baumgartner was able to open Savage Craft in 2021.
On Wednesday, at Savage Craft, Gov. Henry McMaster celebrated a law that again extended how long the credit is available, this time until 2035. The law, which actually took effect in May, also increased how much a developer can collect in reimbursements per property. And it added railroads as structures that can qualify.
Expanding the program will pave the way for more people to revitalize old buildings for their businesses, the same way the tax credits allowed Baumgartner to turn the historic buildings into a bustling bar, officials said Wednesday.
The original tax credit law went into effect in 2013. Between July of 2013 and June of 2023, the state gave more than 2,200 properties over $96 million in tax breaks, according to the Department of Revenue’s latest data available.
That included Savage Craft. In 2019, Baumgartner bought the 94-year-old fire station, which also served as city hall for what was once the New Brookland area, and the 111-year-old jail. Without help from the tax credits, though, turning those buildings into a bar “would never have been feasible,” he said.
Under the tax credit, developers can get reimbursed for up to 25% of the cost of rehabilitating a structure. The new law increases the maximum amount for each property from $500,000 to $700,000, paid out between three and five years. Only a few people and companies typically claim the maximum amount available each year, the Revenue and Fiscal Affairs Office noted in an analysis of the new law.
If legislators had not agreed to extend the tax credit, it would have ended in 2025.
In some cases, developers were reconsidering projects because of how much they would cost without help from the state program, said Sen. Tom Davis, the primary sponsor of the new law. Extending the timeline and increasing the amount will allow for more and bigger projects, which can in turn boost an area’s tax revenue in the long-term, the Beaufort Republican said.
“It may be cheaper to simply bulldoze an old building and ruin the character and what it gave the community in the past, but there is a value in rehabilitating it,” Davis said.
Savage Craft, for instance, has brought in more revenue over the past three years since its opening than it used in tax credits, Baumgartner said.
“That’s all gravy for the state, county and city,” Baumgartner said.
Abandoned buildings can also become a safety hazard as they deteriorate, said Rep. Micah Caskey, R-West Columbia. As foundations crumble, the structures can not only become an eyesore but also draw vandalism and crime to the area, he said.
But fixing up one building can encourage people to invest in the surrounding area, he said.
“When we see what was once an abandoned building transformed into a thriving business, a community center or affordable housing, we are reminded of the potential within each of our communities,” Caskey said.
Supporting the preservation of old buildings is especially important in a state like South Carolina, which is rife with history, McMaster said.
From Native American tribes to European settlers to soldiers in the Revolutionary War and Civil War, the state has played a large historical role, and its buildings reflect that, he said.
McMaster pointed across the river for an example of what can happen without a push to preserve a building. On Senate Street in Columbia, a plaque commemorates the last home of former Gov. Wade Hampton, who was a Confederate general and served as governor from 1879-1891. Where the home once stood is now an apartment building.
“That’s a nice apartment building, but wouldn’t it have been nice to have been able to have saved that home?” McMaster said.
