Politics & Government

Senate candidate opposed ending historic tax credits that had benefited her family

The large colonial home and rental unit that Stephen Wrinn, the husband of Democratic senatorial candidate Deborah Ross, purchased in Raleigh’s Boylan Heights historic district in 1992 before they married. The couple later spent $386,000 renovating the home and rental unit, qualifying for $131,000 in state and federal tax credits.
The large colonial home and rental unit that Stephen Wrinn, the husband of Democratic senatorial candidate Deborah Ross, purchased in Raleigh’s Boylan Heights historic district in 1992 before they married. The couple later spent $386,000 renovating the home and rental unit, qualifying for $131,000 in state and federal tax credits. Files of North Carolina Historic Preservation Office

Democratic senatorial candidate Deborah Ross has widely touted her promotion of generous tax incentives for renovation projects that preserve the character of North Carolina’s historic neighborhoods and the state’s abandoned mills and warehouses – ghosts of industries gone offshore.

What she’s less vocal about is that she and her husband, Stephen Wrinn, also have benefited substantially from the historic tax credits she helped champion.

The couple has qualified for more than $267,000 in credits – direct reductions in their state and federal income taxes – for renovations that preserved original features of their home in Raleigh’s historic Boylan Heights neighborhood, an adjoining rental unit and a nearly century-old, water-powered mill in the Blue Ridge mountains.

The tax credits for those projects were already in law well before Ross took office in 2003.

But Wrinn’s renovation hobby later created an awkward appearance that seemed to go unnoticed as

By proposing to repeal the sunset of all the historic tax credits, one of Deborah Ross’ bills would have extended the deadline for her husband’s preservation of a former grain mill. In the end, though, her bill never moved forward, and he finished the renovation before the deadline expired.

his wife tried to fight off attempts to kill the state tax credits, including a 2006 mill rehabilitation credit she authored that has drawn praise for generating upward of $2 billion in real estate development and thousands of jobs. The law has led to the restoration of long-vacant textile plants and tobacco and furniture warehouses and has helped transform the faces of cities from Winston-Salem to Durham to New Bern.

By proposing to repeal the sunset of all the historic tax credits, one of her bills also would have extended the deadline for her husband’s preservation and conversion of a former 2,000-square-foot grain mill in Ashe County into a rustic vacation rental with an industrial look.

In the end, though, her bill never moved forward, and Wrinn finished the renovation before the deadline expired.

While Wrinn was renovating the dilapidated structure in the state’s northwest corner, he grew anxious in 2013 because the General Assembly had voted in 2010 to reverse course and sunset all the historic tax credits. Even with a one-year extension of the sunset imposed in 2010, he was required to finish the work by Jan. 1, 2015, or risk losing 20 percent in state tax credits, worth at least $30,000.

“With the expiration of the state tax credits coming up in 2014, the pace of work on mountain time and other delays I have suffered, I already have concerns about finishing on time,” Wrinn wrote officials of the state Department of Cultural Affairs’ Office of Historic Preservation on Nov. 13, 2013.

Ross had taken on the role of the historic preservation movement’s leader in the House almost from the start of her decade in the General Assembly.

I am honored to have had the opportunity to work, in a bipartisan manner, to preserve North Carolina’s history through its buildings. . . . The fact of the matter is, if we don’t work to preserve North Carolina’s past it will be lost for future generations.

Democratic senatorial candidate Deborah Ross

In March 2013, shortly before she left office and months before Wrinn wrote his letter, she co-sponsored a bill to repeal the sunsets on the state’s historic tax credits and make those programs permanent. The legislation went nowhere, but Wrinn managed to finish his work before the laws lapsed. The renovated mill was listed in 2014 on the U.S. Interior Department’s National Register of Historic Places.

In a phone interview, Ross said she supported delaying or repealing the sunsets because “there were deals that were going to go sour” – major preservation projects across the state that were unfinished and in jeopardy due to what amounted to surprise deadlines for completion. Among them was the renovation of Gastonia’s 600,000-square-foot Loray Mill, said to have been the largest single-roof textile operation in the South.

Extension of the credits had bipartisan support, including from the administration of Republican Gov. Pat McCrory, his departments of Commerce and Cultural Resources and the Historic Preservation Foundation of North Carolina, Ross said.

Ross did not respond to questions about the impact her bill might have had on her husband’s project.

VIDEO: Democratic hopeful for NC Senate race speaks about challenging incumbent Sen. Richard Burr.

A year after all the tax credits expired, the legislature reinstituted a less-generous regime of historic tax credits, which began this year.

Detailed restoration

Ross has mounted a formidable challenge to Republican Sen. Richard Burr as he campaigns for a third term in a swing state and an election climate that Donald Trump’s tumultuous presidential run has made uncomfortable for him and a number of the party’s other senators. With stakes in the race carrying national ramifications because the outcome could decide control of the Senate, Burr and Ross are scheduled to face off Thursday night in their only televised debate.

There’s no evidence that Ross engaged in illegal or unethical behavior in pushing her historic preservation agenda.

“I think certainly for some voters this will smack of personal interests, combined with the public good,” said Michael Bitzer, a political scientist at Catawba College. “I think for the majority of voters right now, their minds are made up, not just for the presidential but down-the-ballot races. But you certainly don’t want negative press going into the final homestretch towards November.”

“If there’s the appearance of coincidence that she was lobbying while their family could benefit from it, I think that appearance of coincidence may be the strongest weapon that could be used in an attack ad. It doesn’t take much. Campaigns nowadays can just skim the surface.”

It seems that if there’s any hint of guilt by association, somebody’s going to take advantage of that. That could probably be the case in this instance.

Michael Bitzer, Catawba College political scientist

Helen Hare, a spokeswoman for Ross, said that “first as a resident and then in the state House, Deborah worked with communities across the state to restore our neighborhoods.”

Ross was asked by McClatchy whether she had paid zero state or federal taxes in some years due to all the credits. She said she would have to check.

Hare said only that Ross “always paid her taxes.”

Wrinn, an engineer, bought the colonial wooden house with its alluring front porch in Raleigh’s Boylan Heights neighborhood in 1992, while the pair were still dating. He was working for Progress Energy, and Ross headed the North Carolina chapter of the American Civil Liberties Union.

In 1997, three years after the couple married and well before Ross became a state lawmaker, the General Assembly passed a law offering a 30 percent tax credit for the historic renovation of personal residences and increased a state credit for preservation of rental property from 5 to 20 percent. The state limited taxpayers to applying the credits over five years in equal sums.

Wrinn and Ross’ restoration project won federal approval in 2006, and Ross and Wrinn qualified for $131,000 in tax credits on their residence, with another $60,000 for the rental unit, according to state documents obtained under a public records request. The state Department of Cultural Resources acts as the U.S. Interior Department’s agent in providing guidance for such projects to ensure that each property is worthy of designation as a certified historic place and the renovation work preserves its character.

Preservationist in office

In 2003, Ross won a seat in the North Carolina House. She said she soon met J. Myrick Howard, the president of the nonprofit group Preservation North Carolina and a fellow resident of Boylan Heights, who was looking for a legislator who would champion his group’s causes. The two quickly struck up an alliance, which led Ross to spearhead legislation that transformed five blocks of deteriorating state-owned properties along Blount Street near the Capitol in Raleigh into a vibrant historic zone.

“She was our go-to person for the whole time she was in the General Assembly,” Howard said in an interview, emphasizing that his group is nonpartisan and Ross always found Republican allies for historic preservation legislation.

Ross became part of a tight-knit community. In 2003, she offered a bill to provide $250,000 in state funding to Howard’s group to help boost its revolving fund for acquisition of endangered historic properties, to be resold to developers who abode by preservation requirements. She served in 2005 among more than two dozen members of an advisory board to the state Historic Preservation Office while her husband had a project pending.

Four years later, when a New Orleans developer ran into personal problems and was unable to renovate the Clark-Miller Roller Mill in Ashe County, Preservation North Carolina ceded its right of first refusal on the property to Wrinn, who bought the mill for $50,000 after its sale was publicly advertised, Howard said. As with his home, Wrinn estimated the construction costs would be $150,000. But his final qualifying expenditures totaled $340,000, earning the couple another $136,000 in state and federal tax credits.

$119 million The North Carolina Department of Revenue’s estimate in biennial reports of how much the historic preservation tax credits have cost the state in lost revenue over the last 10 years.

“He’s done a beautiful, very cool renovation,” Howard said. “It is very rustic, and yet all of the mechanical equipment from the mill is still there.”

In 2005, Ross authored and later won passage of the bill calling for tax credits of 30 to 40 percent for renovations of historic industrial buildings that cost at least $3 million.

Not only did the measure lead to the $200 million renovation of the former American Tobacco cigarette factory in Durham into a bustling mixed-use facility, but it also resulted in an even bigger renovation of the onetime RJR tobacco complex in Burr’s hometown of Winston-Salem. The complex is now home to Wake Forest University’s biotech center.

Ramona Bartos, North Carolina’s deputy chief historic preservation officer, said she’d attended the ribbon-cutting for the RJR project on a cold day in early 2012.

Among the speakers, she said, was Burr, who “spoke positively” about the restoration.

Greg Gordon: 202-383-6152, @greggordon2