Make an Economic Impact on Your Community with a 170 Exchange
Edited by Joseph Garnett, Jr. – Written by Mike Wolfe
While the bargain sale can bring cash and tax savings to a business, its economic impact often makes a real difference.
Statista.com, an online statistics service, says American cities have high vacancy rates. That rate is projected to be 32.9% in 2017 for industrial, retail and commercial buildings. We all know hard-hit cities like Flint and Detroit, MI, but there are many smaller less-known communities with similar problems.
In Huntsville, Alabama, city leaders are considering a rezoning effort to spur growth in the Cummings Research Park to stimulate the economy in that area. There are also plans to develop a start-up village for businesses.
Tampa, Florida is also experiencing a revitalization of the collegiate areas in north Tampa, where some properties have remained vacant for years. The project to revive the area includes transforming several structures.
A 2014 HUD (the US Department of Housing and Urban Development) report shows that Pittsburgh, Pennsylvania repurposed an empty lot into a “greening” project for local youth and McAllen, Texas converted an empty “big box” store into a library.
How can a 170 Exchange help your neighborhood? Think about a vacant building and how it is generating no economic energy at all. Imagine that you have connected with a nonprofit which turns the building into a library or housing for the homeless. Or perhaps the nonprofit repurposes your building into a hub for entrepreneurs to create their innovations.
170 Exchange Economic Impact Creates Jobs, Revitalizing Community
All the situations above generate jobs, providing for the community, and saving money for the city. For example, creating housing for homeless can revitalize a city in decline. Many times, government funds or grants can be work in tandem with your donation to complete the entire project for the nonprofit.
Perhaps, your company has been having trouble selling a vacant building and this year you’re expecting a large tax bill. Consider structuring a 170 Exchange with a qualified charity, who may then be able to repurpose that building to house any number of uses that benefit the area where you live or work.
Maybe you believe your property needs too much work to be useful the way it is, then it might be good for “deconstruction” where a building is demolished, removing all reusable materials. What you are left with is a new usable space which could be used for a garden, a park or even a new building.
You may think a park wouldn’t stimulate the economy; think again. A park would need maintenance and security, which would create employment immediately. Additionally, a pool or community area would also create permanent positions for lifeguards, administrators or recreation specialists.
The cash and tax benefits of a 170 Exchange are very attractive, and making a charitable contribution looks good too. But this new way of looking at your property – repurposing – entices businesses in another way. Everyone wants to boost our economy. And, being one of the organizations that accomplish this, makes the company profile stronger, and receives its own economic incentive.
Let’s review how:
With a 170 Exchange, often referred to as a Bargain Sale, the seller finds a nonprofit buyer. The participants exchange the property for an agreed amount of cash at closing, while the seller receives considerable tax credits. For companies with large tax liabilities, this equates to sizable cash infusions in the form of tax relief.
A repurposing project through a nonprofit for a hard-to-sell property brings economic advantages to your community. This process is definitely a win-win scenario for all parties involved.