The R&D Tax Credit Aspects of Harbor Redevelopment
Harbor-Redevelopment
Harbor redevelopment plays a significant role within
coastal regions because they offer opportunities for large scale
economic development. Redevelopment of harbors is beneficial because it
can help a region build up its economic and social potential. Recently,
there has been a large amount of redevelopment activity in various
harbors within the United States, including Baltimore, Milwaukee, and
San Diego.
The
Research & Development Tax Credit
Enacted in 1981, the Federal Research and
Development (R&D) Tax Credit allows a credit of up to 13 percent of
eligible spending for new and improved products and processes.
Qualified research must meet the following four criteria:
- New or improved products, processes, or software
- Technological in nature
- Elimination of uncertainty
- Process of experimentation
Eligible costs include employee wages, cost of
supplies, cost of testing, contract research expenses, and costs
associated with developing a patent. On December 18, 2015 President
Obama signed the bill making the R&D Tax Credit permanent.
Beginning in 2016, the R&D credit can be used to offset Alternative
Minimum tax and startup businesses can utilize the credit against
$250,000 per year in payroll taxes.
Major
Harbor Redevelopment Projects
Besides the implementation of technology within a
harbor, harbor redevelopment can also include the construction of new
buildings and infrastructure. Architects and engineers are responsible
for the design of new structures which requires a lot of coordination
and planning with one another. Developing a proposal for a city’s
harbor can be difficult due to the need for uniqueness and creativity
as well as meeting a city’s requirements.
Ultimately, developers must create infrastructure
that supports the harbor’s unique environment. When constructing
infrastructure and buildings, it is important to ensure the design is
beneficial for the surrounding environment and public. Extensive
research should be conducted beforehand to create the most optimal
design.
Baltimore
Inner Harbor, Maryland
Corporate Office Properties Trust (COPT) is a real
estate trust company based in Maryland that developed a plan
seeking approval from the city. The $1 billion development project
would create 1.1 million square feet (sqft) of office buildings,
100,000-square-feet of retail and dining space, a 300 room hotel, 350
residential units, and 200 marina slips on a new pier. The
proposed development would enlarge the waterfront promenade and
incorporate a green space. This huge development project would lead to
significant changes within the Inner Harbor area by increasing the
amount of public activity and economic commercial potential.
San Diego,
California
The San Diego port district recommended a
proposal created by OliverMcMillan Inc. in order to move forward and
redevelop the harbor area. OliverMcMillan Inc. developed a plan to
construct hotels, a “boatel,” recreational canals that support kayaks,
paddleboards and small watercraft, and a public administration campus
for the Harbor Police Department. The plan incorporates a mixed-use
concept where various hospitality, retail, office, BlueTech, building,
public market restaurant, and marine services would be developed.
Specifically, the BlueTech development would be a space dedicated to
research and development relating to the marine environment. Another
unique aspect of the plan is to construct a seaplane exhibit that would
include open spaces and piers providing individuals with an area to
connect and enjoy the harbor. The variety of uses available
within this development connects the community with one another and
offers an abundance of activities for individuals.
An issue with redevelopment for developers at this
harbor location is maintaining the existing commercial fishing
operations. A company, Tuna Harbor Dockside Market, expressed and
stated the technical and infrastructure requirements needed to allow
their fishing operations to continue in the future. Potential
developers must incorporate existing businesses that have a significant
presence within the harbor and figure out a plan that won’t compromise
their operations.
Milwaukee,
Wisconsin
Milwaukee’s Harbor District desires to develop a
water and land use plan by 2017. Four consultants were hired by
the city to discuss future plans. The consultants examined the region
and provided input to influence the water and land use plan. Each
consultant came up with a proposal for the harbor, with a major focus
on developing the city’s coal pile property which will soon be empty.
One of the challenges consultants face is preserving
existing activities and businesses within the area while adding new
uses and infrastructure. Designers must determine where new
development fits in and what the balance is for incorporating
industrial uses versus residential uses within certain areas. Mixed-use
planning can be beneficial, however individuals most likely do not want
to live near an industrial factory.
Most consultants developed similar concepts for
potential designs. Three consultants advised the city to keep
industrial uses in a particular area, Jones Island, while supporting
new development on the harbor’s western bank. Another significant
aspect to each plan was the addition of green spaces. Within these
proposals were unique ideas to create river walks, an “experimental
landscape” to research plants and technology, a beer garden, and a 3
mile breakwater. Each proposal was created to provide an
innovative concept designed to repurpose Milwaukee’s harbor area.
Implementation
of Harbor Design Technology
With the utilization of modern technology, the
potential for harbor redevelopment is even greater. Utilizing computer
modeling software and simulation software assists designers and
developers with creating an improved and rehabilitated harbor design. A
modern harbor design can incorporate new technology, such as sensors,
to create a more efficient harbor. Implementing modern technology in a
new harbor can create a safer and healthier environment for the city.
3D Modeling
Tetra Tech, headquartered in Pasadena, California,
was involved in modeling and engineering a design for the harbor in
Savannah Harbor, Georgia. Tetra Tech utilized their 3D modeling system
and watershed tools to examine the harbor and surrounding watersheds to
prevent negative impacts that may occur from deepening of the
navigation channel. The modeling system assisted in evaluating
the potential effects, such as possible increased salinity in the river
and marsh, decreased oxygen in the channel, thus impacting some
endangered species. Tetra Tech is planning two mitigation projects to
prevent these events from occurring. Overall, Tetra Tech was involved
with surveying, geotechnical fieldwork and analysis, environmental
permitting, and engineering design activities for this project.
Baltimore’s
Trash Wheel
Baltimore’s Inner Harbor contains an innovative feature consisting of a
water wheel, also known as a trash wheel, designed and constructed by
Clearwater Mills, LLC, from Pasadena, Maryland. The snail-shaped
structure serves the purpose of collecting litter floating on top of
the harbor’s waters. The water’s currents create power to turn the
water wheel in order to collect garbage from the water and transfer it
into a dumpster barge. In the event that the water current isn’t strong
enough, solar panels generate power for the machine. When the
dumpster is full, a boat comes to take away the dumpster and replace it
with a new one. Baltimore’s trash wheel has been in operation since May
9, 2014, and has since collected 483 tons of garbage. The greatest
amount of trash the wheel ever gathered in one day was 38,000 pounds.
The addition of this innovative machine to the Baltimore’s harbor
ultimately creates a healthier waterway, all while implementing an
environmentally friendly process.
Physical
Oceanographic Real-Time System (PORTS)
The harbor in Charleston, South Carolina utilizes a
Physical Oceanographic Real-Time System (PORTS) designed by the
National Oceanic and Atmospheric Association headquartered in
Washington, D.C. to relay real-time data to ship operators. The system
utilizes sensors to capture the water level, wind speed,
barometric pressure, and fog visibility. The availability of this data
decreases the number of potential accidents that can occur between
vessels. The sensor technology is powered by an AC source or solar
charged battery, and communicates through satellite and IP
sources. Once data is collected, it is transferred through the
Internet and a unique phone system, allowing users to obtain
information through a mobile device. The implementation of the PORTS
system assisted Charleston’s harbor to become a safer and more
efficient pathway for ships to pass through.
Conclusion
Harbor redevelopment offers many advantages to
cities due to various social and economic opportunities. Individuals
involved in the development process include planners, architects, and
engineers who partake in innovative and technical activities. These
particular activities make architectural and engineering companies
eligible to receive federal and state R&D tax credits.
