Gov. Andrew M. Cuomo has not yet signed legislation increasing the incentive for rehabilitating historic buildings, and time is running short.
The bill raising the state tax credit limit per project from $5 million to $12 million was passed by the Legislature last June. The new limit would allow larger, more-complicated projects to proceed, such as the old AM&A’s department store on Main Street. Developer Rocco Termini has promised to tackle that enormous eyesore if he gets the assistance needed from an increased tax credit.
Termini has recently finished a $43 million makeover of the Hotel @ the Lafayette using the $5 million in rehabilitation tax credits available under the current law. But he makes a convincing argument that a higher cap would drive the rehabilitation of more buildings, including the Women & Children’s Hospital campus when the hospital moves to the Buffalo Niagara Medical Campus.
Rehabbing Buffalo icons such as the Central Terminal and the H.H. Richardson complex is hugely expensive, but the higher cap could allow visionaries to undertake that work.
However, the push for what looked like a sure deal for a program that has delivered jobs, economic stimulus and new vitality across upstate has stalled over the past few months. Even if the governor signs the bill, developers will have just two years to apply. The Legislature failed to act on a proposal to extend the program, due to expire in 2014, for five years.
Unless the program is extended, only a few projects will be able to take advantage of the increased incentive before the program expires. For the tax credits to have a truly lasting effect in Western New York, the State Legislature needs to extend the program for five years.
The call for this program to balance the appropriate levels of incentives with fiscal restraint draws attention to the need for the governor to secure the commitment of the New York congressional delegation – and particularly Sen. Charles E. Schumer – to secure changes to the federal rehabilitation tax credit program. Improvements to the federal tax credits will have economic benefits for New York as well as boosting the state tax credit program.
The Creating American Prosperity through Preservation, (CAPP) Act, will serve projects in New York at no additional cost to the state.
The CAPP Act would improve the federal historic tax credit by making the 20 percent credit easier to use while fending off deficit reduction measures that have put the federal program at risk. The program would become more effective for smaller projects and lower the cost of entry – benefiting historic buildings on New York’s Main Streets and along the Erie Canal corridor in villages like Medina and Albion.
Historic tax credits incentivize development that helps New York’s fiscal stability by putting people to work and improving local economies.
The way to achieve that goal while restoring the architectural fabric across upstate is for the governor to sign the legislation and commit to a strategy for improving and extending the state tax credits as well as improving the federal credits. Together, they can help restore New York.