The City of Buffalo is enjoying the benefits of some exciting rehabilitation projects. The completed Hotel @ The Lafayette and the work-in-progress Statler City, to name just two projects, are attracting investment to the city and creating both construction and permanent jobs.
But such projects would never have come about without the financial help provided by federal historic tax credits. Now one side effect of a move in Congress to address an admittedly broken federal tax code would wipe away that vital incentive.
The federal historic tax credit program, created in 1981 as a tool to drive economic development by restoring and reusing America’s historic buildings, is widely recognized as one of the federal government’s most productive community redevelopment incentives.
Since the start of the program, the tax credit has rehabilitated more than 38,700 buildings, created 2.35 million jobs and leveraged $106 billion in private investment nationwide, according to the National Trust for Historic Preservation and the Historic Tax Credit Coalition. On average, the credit leverages about $5 of private investment for every $1 in federal historic tax credits.
Moreover, the cumulative $20.5 billion cost of this program has been more than offset by the $25.9 billion in federal tax receipts generated by these projects.
It is wrong for members of Congress to even suggest that this program be put on the chopping block, given its impact on downtown revitalization in communities across the country and the taxes generated.
Buffalo and other upstate cities need the federal rehabilitation tax credit to attract private investment from developers. As of June, there were nine projects in Buffalo – ranging from $3 million to $5 million in size – with pending applications to use the federal tax credit. These projects will impact neighborhoods and commercial districts across the city.
Sens. Charles E. Schumer and Kirsten E. Gillibrand have seen the benefits of this program firsthand in Buffalo. Rep. Tom Reed, R-Corning, has seen the same in his district, with smaller communities such as Corning, Jamestown and Elmira standing to benefit; they each have pending historic tax credit applications.
Holding New York’s only seat on the House Ways and Means Committee, Reed must work to protect the historic tax credit for the sake of his district and the continuing economic recovery of Western New York.
Reviving post-industrial communities means investing in their downtowns, and that is helped by incentivizing investments in historic buildings. It is frightening to think that some in Congress would undercut such an important and successful program.
Both the Senate Finance and House Ways and Means committees are developing tax reform bills this fall. We urge Schumer, Gillibrand and Reed to get in front of the federal historic tax credit issue.
Before it is too late.