Norfolk tightens tax break loophole for historic building renovations

NORFOLK, Va. (WAVY) — The city says developers who want to renovate historical buildings must now meet stricter requirements to keep more of the original building standing.

Construction is well underway at a soon-to-be apartment complex at the corner of Boush and Bute Street downtown. Mayor Kenny Alexander says the developer, Buddy Gadams, demolished most of the existing structure.

The mayor says less than one percent of the original building remains. Gadams is still cashing in on the city’s tax abatement program for making renovations to a building older than 50 years.,

“That’s not preservation. That’s just new construction,” said Alexander.

Susan George, who has lived in Norfolk since 1985, and has lived downtown since 2005, agrees with the mayor.

“I think more of the building should be preserved,” said George.

City Council unanimously approved the mayor’s proposal at Tuesday night’s regularly scheduled meeting.

The new rules require developers to maintain 51 percent of the historical building they renovate to qualify for any tax breaks. The new ordinance also makes a change that allows buildings 40 years or older to be included in the tax abatement program.

Alice Allen-Grimes, with the Norfolk Preservation Alliance, says she supports the ordinance but fears the 51 percent restriction could prevent developers from rehabbing older buildings.

“My only concern is the 51 percent square-footage requirement, which could be interpreted in a number of ways,” said Allen-Grimes. “Does that mean footprint? If you keep all four exterior walls and gut a building, does it not qualify? If there are multiple floors in a building, which counts towards square footage, and you remove certain floors, does it not qualify?”

After Allen-Grimes took the podium, a majority of council members expressed concern with the current wording of the ordinance.

City Council ultimately passed the ordinance to make sure any new requests submitted will be held to the higher preservation standards.

Councilwoman Andria McClellan and other members said the council could take a vote on amendments to the new policy as soon as their next meeting.

“I look forward to the continued discussion of this and perhaps revisions very soon.”

The council said city staff will look at other cities’ tax abatement programs, including Charleston, S.C., to see how the city can keep as much history alive while also making the renovation projects enticing for developers.

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