Developers have been enticed by state and federal tax credits that allow them to deduct up to 20 percent of construction costs for historic rehabs. The ranks of applicants seeking the incentive have swelled since 2006, when the state tripled the amount it disburses in credits to $50 million.

"We would not have been able to move forward without the tax credits," said Eric Ekman, project manager for Berkeley Investments Inc., during a recent tour of the Watch Factory in Waltham.