Galvin sitting on development tax credits

Secretary of State William Galvin is sitting on millions of dollars in tax credits designed to spur the economic development of historic buildings across the state.

Despite the severe economic downturn and developers desperate for financial help, Galvin decided last year to hold on to 10 percent of his $50 million annual allotment of historical rehabilitation tax credits.

Cover_large In letters to a number of developers in November, Brona Simon, who heads Galvin's Massachusetts Historical Commission, indicated there weren't enough tax credits to go around. "Numerous applications in this round resulted in requests that far exceeded the amount available for the entire year," Simon wrote.

Yet records indicate the commission was sitting on $5.2 million in tax credits that went unused last year. The unused tax credits were rolled over into this year's $50 million allocation. In the first of three allocations this year, the commission awarded $13.3 million, or 24 percent of what it has available, to 40 projects.

Galvin spokesman Brian McNiff said in an emailed statement that the commission routinely keeps millions of dollars of tax credits in reserve "to meet unpredictable calls on the tax credit program that may rise from threatened historic structures in the next calendar year."

Galvin has come under fire for the way he runs the tax credit program. He doles out the tax credits using a secretive selection process that creates uncertainty for developers and maximizes his political clout. He has also resisted attempts by lawmakers and developers to find out who is receiving the tax credits and what is being done with them. A CommonWealth investigation last summer, relying on documents obtained under the Public Records law, found out that the Boston Red Sox have received more tax credits than anyone else. The tax credits are being used for the renovation of Fenway Park.

Robert D. Ansin, chief executive officer of MassInnovation LLC, says he needs about $5 million in state tax credits to kick-start a $50 million development project in Lawrence called Monarch on the Merrimack. Ansin said he has received tax credits worth about $1.6 million so far and needs another $3.5 million. His requests for tax credit allocations were rejected last November, with the historical commission saying it lacked the funds, but he received a total of $600,000 in tax credits in March.

Ansin said there may be a need to hold some tax credits in reserve, but he urged state officials to think about making fewer but larger allocations of tax credits to projects to get them moving in the depressed economy. He said many projects are sitting idle while they wait for the tax credits they need to begin construction. Galvin typically makes tax credit awards in the $200,000 to $500,000 range.

Ansin also said state officials should explore whether they can retrieve tax credits awarded to projects that are no longer being pursued or not being pursued actively.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

A number of bills have been filed on Beacon Hill to raise the annual allocation of historic rehab tax credits to as high as $100 million — or remove the limit entirely in economically distressed Gateway Cities like Lawrence, Lowell, New Bedford, and Fall River. Some lawmakers have also said they would like to take oversight of the program away from Galvin.

Preservation Massachusetts, a nonprofit Boston organization that spearheaded the original legislative approval of the historic tax credit program, recently issued a report that said current demand for the tax credits totals $293 million, which could leverage development investment of $1.8 billion and generate nearly 26,000 jobs.

"State tax credits, when coupled with federal credits, are increasingly becoming the critical source for attaining project feasibility," the report said. "It is anticipated that the number of applicants and demand for state credits will continue to increase, and an expanded program will be needed to unlock the enormous amount of development potential that these projects represent."