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

Fiscal year 2025 and historic theater and event spaces case studies

Key findings

For projects approved in fiscal year 2025

• 11 historic property rehabilitation projects received initial approval.
• Proposed future uses included:
  • Housing
  • Office space
  • Hotels
  • Venues
  • Restaurant
  • Mixed-use development
• Six of the 11 projects (55 percent) are located in Greater Minnesota, including Duluth, Hibbing, Rochester, Saint Cloud, Saint Peter, and Winona. 
• Developers intend to spend nearly $150 million on their rehabilitation projects. Estimated state historic tax credits awarded to total $23.5 million. 
• The projects will:
  • Generate an estimated $244.9 million in economic activity. Includes $94.6 million in labor income.
  • Support 1,035 full-time equivalent jobs.
  • Generate an estimated $11.7 million in state and local tax collections.
• About 50 percent of the tax credit extended will be repaid through the taxes generated from construction-related activities.
• For every dollar of tax credit awarded, the projects will generate $10.40 of economic activity. 

For projects completed during the periods of fiscal years 2011 to 2025

• Generated an estimated $7.2 billion in economic activity.
• Supported 32,600 jobs, paying $2.6 billion in labor income.
• Projects have occurred in 24 of Minnesota’s 87 counties.
• Of the 11 approved in fiscal year 2025, six were in Greater Minnesota, demonstrating a growing trend for more projects being located outside of the Twin Cities metropolitan area.

Case studies of adaptive reuse for theater and event spaces

One benefit of historic preservation is that each project reflects both the history and current needs of the community. While each project is unique, a few common themes emerged when the projects were examined together:

• Theater and event spaces pose specific challenges for reuse and rehabilitation. 
  • Large, open concept spaces, particularly those with few windows (such as theaters) can be challenging for adaptive reuse.
  • Theaters are often best repurposed for uses that maintain most of their open spaces and characteristics.
•  Local commitment and investment are critical to project success. 
• Both public-private partnerships and a mix of funding sources are necessary to ensure a successful project.

About the report

Since the creation of the federal historic tax credit in 1976, many states have implemented similar state historic tax credits. The Minnesota Historic Structure Rehabilitation Tax Credit was enacted in 2010, sunset in 2022, and reauthorized in 2023. The 2023 reauthorization set a new sunset date of 2030.

For a property to be awarded a Minnesota tax credit, the project must be eligible for the federal historic tax credit. Like the federal program, Minnesota’s tax credit is 20 percent of qualified rehabilitation expenditures. In Minnesota, project developers can receive a grant in lieu of the credit — 90 percent of the allowable 20 percent credit on qualified rehabilitation expenditures — or a combination of both the grant and the credit. 

Each year, the State Historic Preservation Office (SHPO) partners with University of Minnesota Extension to measure the economic value of projects leveraged by the credit. In 2025, Extension conducted three analyses: first, a case study of five projects that represented theater and event space adaptive reuse; second, the economic impact of projects approved in the fiscal year; and finally, the economic impact of all projects approved between fiscal years 2011 and 2025. 

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