Agenda - Council Work Session - 03/25/2025

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philanthropy is another avenue: companies such as Target, Xcel, or General Mills have foundations that give to community initiatives. These grants typically range from $5,000 up to $100,000+ depending on the foundation and project impact. To tap these, the City would usually need to apply through a competitive process highlighting the project's community benefit (e.g. education, civic pride, economic vitality). • Corporate Grants and Sponsorships: Local businesses or corporations with a presence in the region might sponsor the renovation. For instance, a construction materials company could donate or underwrite materials, or a bank might provide a community grant as part of its Community Reinvestment Act outreach (BMO). While not as formal or large as federal/state grants, such private -sector contributions can accumulate. • Community Nonprofits and Crowdfunding: Local historical societies (like Friends of Old Ramsey Town Hall, if one were established) or a dedicated Friends group can raise funds privately. They could apply for grants as a nonprofit, which sometimes is advantageous. Additionally, public crowdfunding campaigns have succeeded in supporting small-scale preservation platforms like GoFundMe or Kickstarter have been used to raise money for town hall restorations by engaging residents and others. While not "grants," these contributions can then be used by the City as match for grants or specific restoration tasks (e.g. "buy a brick" campaigns where donors finance the masonry repair one brick at a time). Example: The City of Peterson, MN (much smaller than Ramsey) raised community donations to restore its 1877 town hall, which then helped leverage a Minnesota Historical Society grant. A similar approach could bolster funding for Old Ramsey Town Hall. Tax Credits and Incentives • Federal Historic Preservation Tax Credit (HTC): This program provides a 20% federal income tax credit on qualified rehabilitation expenditures for historic buildings that produce income (e.g. commercial, rental, or business use). To qualify, the building must be listed on the National Register of Historic Places (or contributing to a National Register district) and the rehabilitation work must meet the Secretary of the Interior's Standards. While a city -owned building doesn't pay taxes, Ramsey could partner with a private entity to take advantage of the credit — for instance, by leasing the restored Town Hall to a business or organization. The private partner could claim the credit, significantly reducing restoration costs. The federal HTC has no set cap per project, and large projects often combine it with other financing. The process involves getting the project approved by the State Historic Preservation Office and NPS. Examples: Many Minnesota projects have utilized the 20% federal credit, such as the Schmidt Brewery redevelopment in St. Paul and the NorShor Theatre restoration in Duluth, both of which leveraged federal HTC equity (Renewal of state historic tax credit program draws praise, projects I MPR News). If Old Ramsey Town Hall were repurposed (for example, as leased office/event space), an investor could use the HTC to recoup a portion of rehab costs. • Minnesota Historic Structure Rehabilitation Tax Credit: Minnesota offers a state historic tax credit equal to 20% of qualified expenses, effectively doubling the incentive for projects that also use the federal credit. This state credit (which can be taken as a grant in lieu of a credit) was temporarily expired but in 2023 the legislature extended it for eight years (through 2030) (Renewal of state historic tax credit program draws praise, projects I MPR News). Like the federal, it requires the property be an income -producing historic resource and follow preservation standards. When combined, a project can get a 40% tax credit on rehab expenditures, greatly improving project feasibility. Examples: Since its inception in 2010, the state credit has aided nearly 200 projects. Notable examples include the Historic State Theater in Ely and the Duluth Armory project, which rely on the state credit alongside the federal credit. Even though the Town Hall renovation would be a public/non-profit use, the City could explore creative models — for instance, a public -private partnership or transferring ownership to a nonprofit that can utilize the credits via a development deal. Some cities have done this: a nonprofit restores the building using tax credits and then leases it back to the city for public use. This route is complex but potentially very beneficial financially if the project is large enough to attract tax credit investors. • Property Tax Abatement or Local Incentives: Ramsey could consider local incentives such as a property tax abatement for a partner developer if one is involved. Minnesota law allows cities to abate property taxes to support community development projects. In the case of the Town Hall, if a private entity invested in the building, the City could abate taxes for a period as a subsidy. • Energy Efficiency and Other Niche Incentives: Upgrading a historic building can qualify for energy rebates or incentives. Programs like Xcel Energy's Energy Design Assistance or the federal Investment