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The Buffalo Niagara Medical Campus risks losing historic tax credits considered vital for large redevelopment projects if it pursues the removal of most of the Trico Complex.

That’s the view of the state Office of Parks, Recreation and Historic Preservation, which has informally reviewed the Buffalo Niagara Medical Campus’ plan to remove four of five structurally independent buildings and found it eliminates too much of the site’s historic fabric.

The plan – the most invasive of three options considered – would retain 42 percent of the National Register of Historic Places complex by keeping Building No. 8, the trademark brick and re-enforced concrete structure that wraps around Ellicott Street onto Goodell Street.

“Demolishing more than half of the complex will result in the BNMC being unable to participate in the historic preservation incentives tax credit program. If you decide to participate, you have to meet the Secretary of the Interior’s standards,” said Elizabeth Martin, historic sites restoration coordinator for Buffalo.

“We would technically de-list the property, and therefore it would not be eligible for the 20 percent federal and 20 percent state tax credit programs.”

The Medical Campus’ action could impact other public funds needed to build a planned 250,000-square-foot expansion of the Innovation Center within the Trico footprint. That’s because any time state or federal monies are used in a project, other agencies are required by law to consult with the state preservation office on how the project affects historic and cultural resources.

Public funds could be crucial, since 96 percent of the campus’ funds in 2010 and 2009 came from public sources, according to annual filings required for tax-exempt organizations.

Martin stressed that her agency supports economic development and believes historic preservation can be a catalyst for that. She said the feasibility study’s second option – which called for more targeted demolition centered on the Ice House, the oldest and most threatened building – appeared justified by the condition of the buildings.

“The Ice House, I think, is severely deteriorated, and the Park Service said they would feel comfortable – not happy, but comfortable – in losing that but still having the complex eligible for the full tax-credit program,” said Martin, who works for a division of the state Office of Parks, Recreation and Historic Preservation.

That option would retain 81 percent of the original complex, as opposed to 42 percent in the Medical Campus’ chosen course of action, a choice swayed by economic considerations.

The study estimated the redevelopment cost at $113.7 million to retain the entire complex, $97 million for the second option and $52 million to retain just Building No. 8.

The complex was found to have significant environmental cleanup costs, as well as roof and structural challenges inside and out that constitute a big part of the redevelopment costs.

A member of Preservation Buffalo Niagara warned that a loss of tax credits for the historic property could scare away future developers.

“Projects of this magnitude need historic tax credits, and the proposed selective demolition could doom any future rehabilitation effort,” said Jason Wilson, director of operations. “The present revitalization of downtown, championed by projects like the Hotel @ the Lafayette and ECC’s Lofts at 136, is in large part due to the use of historic tax credits.”

But Doug Swift, the developer who was hired by the Medical Campus to oversee the feasibility study, said there is still a long way to go.

“This is the first step in a very long process that will lead to a redevelopment of this site. There are multiple options for the final footprint of the Trico Complex that weren’t analyzed as part of the study, because of its limited scope. That could change as we move forward with a solicitation of interest from potential developers,” Swift said.

Martin suggested that redeveloping Building No. 8 and mothballing the rest of the site should also be considered.

“I’m just hopeful that BNMC will slow the process to make sure they have all the information,” Martin said. “We really want to be part of the process.”

email: msommer@buffnews.com