Thank you for giving us the opportunity to present to you this morning. This is a joint presentation from Simpson Roberts Architecture and Heritage Property Corporation.
Simpson Roberts Architecture is an architectural firm that has a very large focus on the preservation and restoration of our historic buildings. Heritage Property Corporation is a developer that is focused exclusively on the restoration and sensitive rehabilitation of our historic buildings in Alberta.
What we are advocating today is a tax credit for historically designated properties through a federal rehabilitation tax credit. Such incentives are already available in Canada in the areas of environmental heritage and also for cultural objects and should be extended to Canada's built historic resources. Such heritage tax incentives have been proven to be successful in other jurisdictions. The United States has had a program for decades that has proven to be tremendously successful.
Given that all Canadians benefit from the restoration and preservation of our historically significant resources, it is only proper that the federal government provide the necessary tax incentives to encourage their preservation.
The benefits of restoring our historic buildings and preserving the built historic fabric are numerous. Regretfully, tax incentives are often a necessary catalyst for historic preservation, but they've been proven to be cost effective.
One of the benefits, which has been overlooked recently and should not be underestimated, is the environmental impact that restoring our built heritage affords us. The amount of debris that contributes to our landfill and the reduction of costs to municipalities to participate in and maintain landfills are a substantial benefit to heritage preservation.
Unfortunately, programs such as the LEED program, which provides incentives or certainly a way of monitoring construction practices and environmentally appropriate construction practices, simply do not consider restoration or renovation in their models. They're exclusively focused on new construction. So historic preservation is something that has been significantly overlooked.
If we intend to have a sustainable society, we simply can't build our way to that. We must restore and renovate our way to that.
The second part of our presentation is going to focus on a particular project in Calgary, the Lougheed Building, as an example of how a tax incentive helped restore this important building. The Lougheed Building was built in 1912 and it occupied a significant future development site in downtown Calgary. In 2001 a development permit was issued by the city to allow for its demolition and replacement by a high-rise office building. When we purchased the building in 2003, the purchase price alone for the development site made the project uneconomical. The only way the building could be preserved was with government support. Unfortunately, the economic incentives from the Province of Alberta, through grants offered from the Alberta Historical Resources Foundation, were insufficient to change the economics of the proposal. This was an approximately $30 million restoration project, and the maximum provincial grant was $100,000.
The federal government at the time had a grant program under the Commercial Heritage Properties Incentive Fund, and we were eligible for $1 million under that program. That was certainly a significant incentive. Regretfully, that program has since been cancelled, but in addition, that was only available if the building were historically designated, and there would be no guarantee, if it were designated, that the grant would be either fully or partially available.
The grant we did obtain from the City of Calgary, which was a $3.4 million grant paid over 15 years, was the catalyst for the restoration of the building. This grant was calculated based on the estimated increase of property taxes for the 15 years following the building's restoration, and it was successful, because we knew immediately upon obtaining historical designation, the building could be preserved. Such an economic-certain tax incentive could be and should be provided by the federal government.
From a developer's point of view, the only way our historic buildings will be preserved is if the federal government participates through a tax incentive program.