Three New Cultural Districts to be Established in Lafayette
The applications for Greater Freetown-Port Rico, University Gateway and the Oil Center Cultural Districts were conditionally approved by the Department of Culture, Recreation and Tourism this week. To finalize the districts, Lafayette Consolidated Government, CREATE Initiative and the neighborhoods will be working with the state’s Cultural District Program to finalize a list of businesses within the districts, agree to serve as a liaison and communicate the benefits associated with the pending certification.
Upon final certification effective on July 1, 2019, the Cultural Districts will have the ability to apply for state historic tax credits for revitalization projects and to exempt local sales tax only for original artwork sold within the designated districts. By incentivizing cultural activity in these ways, Cultural Districts throughout the state are benefitting from increased commerce, improved occupancy, a greater sense of community identity, and more artistic and cultural production.
“The establishment of these new cultural districts is an example of the CREATE Initiative working with the State to enhance the impact of our cultural economy. With historic state tax credits now available, developers are already reaching out to us about redevelopment in these districts,” said Mayor-President Joel Robideaux.
These three cultural districts join Downtown Lafayette, McComb-Veazey, Carencro and Scott as the newest cultural districts in the parish.
“We commend you for being part of this progressive program. You have my enthusiastic support and encouragement as you use the Cultural District program to advance the cultural economy. Our staff will work with you in the coming weeks to establish the Cultural Districts and assist as you implement procedures to capitalize on the new incentives,” said Richard H. Hartley, Deputy Secretary, State of Louisiana, Department of Cultural Development.
About the Louisiana Cultural District Program:
The Louisiana Cultural District Program is administered by the Louisiana Department of Culture,
Recreation, and Tourism, and was created by the Louisiana Legislature in 2007 and launched in 2008. The program provides incentives in designated cultural districts that contribute to increased business opportunities; new markets for cultural products; increased artist production; renovations of older buildings; increased cultural activity; and a greater sense of community identity.
The Cultural District Program:
· Allows a local government to designate a cultural district for the purpose of revitalizing a community by creating a hub of cultural activity.
· Allows state historic tax credits for eligible expenses for qualifying structures in a cultural district.
· Requires local governments who designate such districts to report on the impact to their community annually.
· Requires the Louisiana Department of Culture, Recreation and Tourism to collate reports received and submit a single report biannually to the legislature.
State Historic Tax Credits
State Historic Tax Credits are an important component of the Cultural District Program intended to spark renovations and reuse of historic buildings for revitalizing communities and providing facilities for cultural activities.
The only way historic buildings can access the 20% State Historic Tax Credit is if they are income-producing buildings 50 years or older that are contributing elements to certified Cultural Districts. If they meet this criteria and adhere to the rehabilitation standards set forth by the State Historic Preservation Office, then 20% of their eligible rehabilitation expenses can be submitted for a transferrable State Historic Tax Credit.
These three new cultural districts, University Gateway, Oil Center, and Greater Freetown, are based on larger planning efforts for these areas in an effort to further open up State Historic Tax Incentives for income-producing historic properties within these cultural district boundaries.
The following is the breakdown of historic income-producing properties within the five Cultural Districts:
· Downtown Cultural District: 541 total historic income-producing properties (includes 319 historic commercial properties and 222 single-family historic residential rental properties).
· McComb-Veazey Cultural District: 1,085 total historic income-producing properties (includes 221 historic commercial properties and 864 single-family historic residential rental properties).
· University Gateway Cultural District: 254 total historic income-producing properties (includes 35 historic commercial properties and 219 single-family historic residential rental properties).
· Oil Center Cultural District: 177 total historic income-producing properties (includes 117 historic commercial properties and 60 single-family historic residential rental properties).
· Greater Freetown Cultural District: 619 total historic income-producing properties (includes 258 historic commercial properties and 361 single-family historic residential rental properties).
Approximately 950 historic commercial properties would be eligible to access the 20% State Historic Tax Credit with these new cultural districts. In addition, 1,726 historic residential rental properties would be eligible to access those State Historic Tax Credits as well. In total, approximately 2,676 properties would now have access to State Historic Tax Credits that without the Cultural District they would not be able to access.
Tax Exemption for Original Art
The Cultural District Program requires that local sales taxes on qualifying original art be exempted within a designated cultural district. All sellers of original art must register with the state and the local tax administrator before conducting sales.
Original Art is defined as: Original, one-of-kind, visual art; conceived and made by hand of the artist or under his/her direction; and not intended for mass production, except for limited editions specified below. An item must meet all aspects of the definition to qualify.
Examples of eligible visual art media and products include: visual arts and crafts, including but not limited to drawing, painting, sculpture, clay, ceramics, fiber, glass, leather, metal, paper, wood, installation art, light and digital sculpture, wearable art, or mixed media, and traditional and fine crafts; and limited, numbered editions (up to 100) of lithographs, photography, silk screen, intaglios, and etchings.
Examples of INELIGIBLE media and products include: performing art; food products; live plants, such as bonsai trees, floral arrangements, wreaths, and garlands; music recordings; and reproductions of original works of art, including digital prints or giclees.
Financial Implications of Tax Exemption for Original Art
With regard to the tax exemption on Original Art, the total taxable arts sales in 2017 for the State were $6.5 Million. The total cost to the state on the state’s 2% exemption was $300,000 in 2016 for all of the state’s cultural districts (about 60) which places the average impact on state sales tax collection was just under $5,000.