Economic impact of projects leveraged by the Minnesota Historic Structure Rehabilitation Tax Credit

Fiscal year 2024 and historic warehouse building project case studies

Key findings

 For projects approved in fiscal year 2024:

• Developers filed 9 applications for new projects. Four are in Greater Minnesota.
• Project developers plan to spend $333.1 million on their rehabilitation efforts.
• The projects will generate an estimated $591.5 million of economic activity in Minnesota.
  • Included $160.8 million in labor income.
  • Supported an estimated 2,055 full-time-equivalent jobs.
• Every dollar of tax credit created $10.25 in economic activity in Minnesota
• 43% of credit costs were repaid immediately after completion of construction. Construction projects generate tax revenues as they are completed. 

For projects completed during the periods of fiscal years 2011 to 2024:

• Projects included in this report have generated $6.8 billion in economic activity since fiscal year 2011. The credit has supported nearly 32,000 jobs, paying $2.5 billion in labor income.
• There have been projects in 22 of Minnesota’s 87 counties.
• The number of both smaller projects and projects located in Greater Minnesota has increased.

About the report

In 1976, the United States Congress enacted language leading to the creation of the federal Historic Tax Credit. Subsequently, many states adopted state historic tax credit programs. Minnesota first authorized its Historic Structure Rehabilitation Tax Credit in 2010. It sunset in 2022 but was reauthorized in 2023.,

University of Minnesota Extension has analyzed the economic impact of projects leveraged with the tax credit since its inception. This year’s report includes three analyses: the economic impact of representative historic warehouse rehabilitation projects, projects approved in fiscal year 2024, and all projects approved between fiscal years 2011 and 2024.

Economic impact of representative historic warehouse rehabilitation projects

Many Minnesota communities have received benefits from projects completed with the state historic tax credit. A common use of the state credit is for the rehabilitation of historic warehouses. In the late 1800s and early 1900s, due to a booming agricultural industry, a Midwest location, and rail and water transportation options, Minnesota became a warehousing hub. While Minneapolis’s district might be the most recognizable, many river, port, and rail hub cities throughout the state featured warehouse districts.

During the last 14 years, multiple developers have used the state historic tax credit to rehabilitate warehouses. To understand the community benefits, SHPO and Extension selected six warehouse projects that reflect the use of the tax credit. The projects represent three different approaches:

• Approach 1: Addressing the housing shortage
• Approach 2: Redeveloping a neighborhood
• Approach 3: Tackling a community issue

Read the full report