The overhaul that Henry Lambert and his partners are giving an old awning factory here on Julia Street is squarely in the mainstream of urban rehabilitation today. An unused, run-down structure in an old part of town is being transformed into a chic place to live and to shop. This project and others like it have a common origin: the federal income tax credit for historic preservation.
Similar projects dot New Orleans's warehouse district and comparable areas in St. Louis, Philadelphia, Providence, R.I., and dozens of other cities in the United States. All of them preserve local architectural traditions, and many have been commended for creating jobs and producing needed housing.
This tax credit, instituted by Congress in 1981, will disappear if the tax simplification plan proposed by the US Treasury takes effect. That prospect has generated an extensive grass-roots campaign to save the measure. Fifty ``tax task forces'' have been organized around the country to ``document the local benefits'' of projects spawned by the tax credit, says Mona Ferrugia, executive director of Preservation Action, the Washington-based lobbying group spearheading the campaign.
``People all over the country are seeing downtowns renovated and not realizing it's the tax credit behind it,'' adds Ms. Perrugia. She says the goal of her group is to bring home to senators and congressmen the gains from federally stimulated historic preservation.
The Julia Street project in New Orleans -- turning a cavernous former factory into a 101-unit apartment complex, replete with light wells, a roof-top pool, and retail space -- springs directly from the tax credit. ``It has been difficult with it, impossible without it,'' Mr. Lambert says. Under the credit program, he and his associates will be able to subtract 25 percent of their construction costs from the amount of income tax they owe. That provides the incentive needed to lure developers like Lambert into the costly business of restoring old buildings in the inner city.
``If it weren't for the investment tax credit, they'd be doing motels in the suburbs,'' says Patricia Gay, director of the Preservation Resource Center here.
The National Trust for Historic Preservation has drawn up estimates of the economic benefits that have accumulated since the 25 percent tax credit was passed in '81. Its findings:
A total of $5 billion invested in rehabilitation of historic downtown buildings.
More than 180,000 jobs generated by restoration projects.
More than $5 billion in local retail sales and other business activity.
More than 30,000 new rental housing units produced.
Weighing against these figures are the US Treasury's estimates of how much the federal government could save by doing away with the tax credit for historic preservation.
Art Siddon, a Treasury spokesman, says the department foresees savings of $346 million in added income-tax revenue from individuals and $143 million from corporations in fiscal year 1987, building to $1.6 billion from individuals and $521 million from corporations in fiscal year 1989.
But what the Treasury figures overlook, according to Ian Spatz of the National Trust, is the investment tax credit's record as an ``economic engine pumping vitality into local economies.''
Treasury's Mr. Siddon, however, explains that opposition to the credit stems from more than prospective tax savings. He mentions, for instance, his department's belief that the best way for the federal government to encourage preservation is through direct grants, not tax credits.
Ward Jandl, who heads the Preservation Assistance Office of the National Park Service, points out, however, that the current program has been successful expressly because it eschews the grant approach. Grants are by nature exclusive, he says, while the tax credit is open to ``anyone with a historic building and quality plans for restoration.''
Mr. Jandl's office has final approval of projects applying for the tax credit. To qualify for the credit, a developer has to meet four criteria: His building must either be on the National Register of historic buildings or in a local historic district; his restoration work has to be certified by the state; he has to spend more on rehabilitation than he spent for the building itself; and his project has to be income-producing, not a private dwelling.
Those watching the evolving tax-reform picture in Washington say it's too soon to predict whether the historic preservation incentive will survive. Cleve Corlett, an aide to Rhode Island Sen. John Chafee, a longtime proponent of the measure, says the tax credit is not in the ``untouchable'' category with deductions for home-mortgage interest payments and charitable contributions.
But it is among those provisions that are generally conceded to have been successful in doing what they were designed to do, he adds. Still, he foresees a ``good deal of debate'' on the measure as Congress struggles toward a decision on just where the tax-reform line should be drawn.