The city is trying to get most of central downtown designated as a historic district in the National Register of Historic Places, giving developers access to millions of dollars in tax credits for rehabilitation projects.

The National Park Service will likely decide by the end of the year whether to create the new district, which would span about 0.33 square miles from the River Walk tourist area to just north of the Tobin Center for the Performing Arts, said Shanon Shea Miller, director of the city’s Office of Historic Preservation. The Texas Historical Commission approved the city’s application this month.

Creating the district would help speed up development downtown, especially for large historic properties that are expensive to fix up, city officials say. The city has tried to stimulate downtown growth in recent years with new policies providing subsidies to developers and fining owners of vacant buildings.

If the district is approved, developers could apply for state and federal tax credits equal to 45 percent of most renovation expenses. Nearly 200 historic buildings and other structures would be eligible, including the Tower Life Building, the Hilton Palacio del Rio and the Light building, which developer GrayStreet Partners is under contract to buy from Hearst, the publisher of the San Antonio Express-News. The newspaper’s building also falls within the proposed district.

“It’s hard to ignore the potential of getting 45 percent of the eligible project costs back,” Miller said. “It is definitely a powerful incentive to enable someone to redevelop a building that they may not have been able to do financially without the credits.”

If developers choose to use the credits, they would have to submit their renovation plans for the approval of the Texas Historical Commission and the National Park Service, said Patrick Kennedy, a local attorney who helps developers apply for the credits. State and federal authorities would also conduct inspections, and the credits would only be given after work is done.

The tax credits have been used for local buildings that are already on the National Register, including the St. Anthony Hotel, which reopened last fall after a 30-month renovation. The majority investor, Sid Greehey, said the credits amounted to more than $5 million but declined to disclose a specific amount.

“We wouldn’t have started that project had we not gotten the tax credits,” he said.

But Greehey said he had to pay extra to meet the “strict” standards of the Texas Historical Commission and the National Park Service. For example, they required him to restore the building’s flooring and roofing to its original condition.

“There are some good and bad things about it,” he said. “Overall, though, we took advantage of it. I would say it probably represented maybe 10 percent of the cost of the project.”

Mike Litofsky, a local developer who owns many properties downtown, supports creating the national historic district but said he would only use the tax credits for large-scale, well-financed projects that are worth the effort. He applied for the credits for a renovation project near Market Square but ended up withdrawing because it was taking longer than he wanted to wait.

“It wouldn’t be worth the effort if it was a small mom and pop,” he said, noting that the district “would add to the prestige of the city.”

The National Register district wouldn’t limit what building owners could do with their properties unless they choose to use the tax credits. In fact, large parts of two local properties that are on the National Register, the Friedrich Building and Merchant’s Ice House industrial complexes on the East Side, are eligible for demolition after the City Council removed the city’s historic designation in December.

The owner of the complexes, Dallas developer John Miller, asked the council to remove the designation in order to make the properties easier to develop. Miller’s lawyer, James McKnight, said Wednesday that Miller is still considering his options and that no demolition is planned.

The federal tax credit covers 20 percent of rehabilitation costs and is subtracted from the developer’s income tax, Kennedy said. The state credit is equal to 25 percent of costs and reduces the developer’s franchise tax. Developers have the option of selling the credits at a mark-down.

Some areas of downtown are already districts in the National Register, including the areas around Alamo Plaza, La Villita and Main and Military plazas, according to the National Park Service website. Several downtown buildings are already on the register, such as the Aztec Theater, the Maverick Building and the Milam Building.

Large parts of Southtown and Midtown are national historic districts as well, including the neighborhoods of Lavaca, King William and Monte Vista. The tax credits only apply to properties that produce income, such as apartment buildings and hotels, said Anna Hudson, a historic preservation consultant for real estate firm Yndo Urban.

The proposed district would give the city another tool to encourage downtown development, which has been gaining momentum lately but still lags behind many other major cities.

Last year, the city began using fines and court actions to prod property owners to develop vacant buildings in downtown and other historic areas. Some property owners aren’t happy with the policy, but city officials say it has encouraged owners to fix up dozens of buildings. The council voted this month to triple the policy’s geographic reach.

In 2012, the city adopted the Center City Housing Incentive Policy, which offers low-interest loans, property tax relief and fee waivers to developers building downtown and in other parts of the urban center. The Inner City Reinvestment and Infill Policy, which waives city fees in downtown and other areas of the city, was created in 2010.

While approving the city’s application for the district, the Texas Historical Commission requested some minor changes, Miller said. The commission will send the completed application within a few weeks to the National Park Service, which will probably make a decision by the end of the year, she said.

City officials want to create additional national historic districts elsewhere in San Antonio, Miller said — perhaps reaching farther north on Broadway.

“We’re definitely looking at where it makes sense to go next,” she said.

The city spent about $45,000 on the application, which includes detailed descriptions of dozens of downtown landmarks.

The federal tax credit for National Register properties has been around for decades, but the state’s credit went into effect only last year after the Legislature passed it in 2013, Kennedy said.

Other major Texas cities have National Register districts in their downtowns, although they aren’t as large as the one proposed in San Antonio, according to the park service’s website. In Austin, the areas around Congress Avenue and Sixth Street are historic districts.

The idea of creating a National Register district has been a source of controversy in El Paso. Last year, the City Council there voted to turn down a grant from the state to fund an application to create a national historic district downtown, according to news reports. Many property owners were skeptical of creating the district, saying that preserving historic buildings can discourage other investments.