Encouraging the Renaissance
By: Christopher Smith
Date: June 2, 2006
On Tuesday, the Buffalo News profiled Rocco Termini and his rehabilitation of classic downtown buildings. The article focuses on the stated need for New York State to provide historic tax credits for those who wish to return classic buildings like the Webb, Vernor, and the Graystone to life as mixed use residential/retail complexes.
Rocco Termini wants to convert Pearl Street’s historic but run-down Webb Building into loft-style housing.
What would make the project more viable and hasten, he believes, the restoration of other vacant downtown structures would be providing developers state historic tax credits.
“The tax credit would raise an extra $900,000 in equity to do the Webb Building,” said Termini, who estimates the cost to rehab the 1888 structure at $9.2 million. “Just walk down Main Street. All those buildings would qualify for this program.”
More importantly, the designation of historic state tax credits allows the developer to pursue federal rehabilitation tax credits for a project. When both tax credits programs are utilized, 50% of the cost to the developer is reduced. This makes it economically feasible to undertake a massive rehabilitation project in a market with a low rental ceiling.
In today’s edition of the News, Donn Esmonde joined the discussion.
There is a way to turn the trickle of downtown revival into a stream. There is a way stop the rot and speed the revival. Albany can untie the hands of Termini and other developers simply by doing what most other states do: Kick money into downtown revival. Pump tax-credit dollars into old buildings. The breaks cover a tenth of the cost of a project - and free up twice as many Washington dollars.
There has been tremendous success with these programs in other states like Illinois, Missouri, and Rhode Island which have seen exponential growth in historic restoration projects. These projects bring construction jobs, revitalize city centers, and return properties to the tax rolls. It’s a case of “invest a little to gain much”.
So, why has there been relative inaction on the part of Albany lawmakers to kickstart downtown development?
It is the Sheldon Silver-controlled Assembly that blocks Buffalo’s restoration path. Power lies downstate, and Silver is supposedly worried that restoration aid would speed the yuppie-fication of New York City’s ethnic neighborhoods. It is a problem any upstate city would love to have.
I understand Silver’s apprehension as gentrification in NYC is a problem on a massive scale. There are few places in the city where the working class can reside. Previously sponsored legislation was statewide in nature and was referred to committee due to the possible negative effects it would have on the downstate residential market.
However, Assemblyman Sam Hoyt has introduced two bills that are focused on the general upstate market and one that is hyperfocused on the Downtown Buffalo residential market. As you should know by now, if you want to get something done in Albany, you need to submit AT LEAST three bills with varying language in order to weave one of them through committee and on to the floor.
Bill A04285:
TITLE OF BILL : An act to amend the tax law and the public housing law, in relation to providing a “downtown residential credit” against the articles 9-A, 32 and 33 franchise taxes and the article 22 personal income tax for construction or rehabilitation of certain downtown area and central business district buildings for certain residential purposes in cities having a population of less than one million inhabitants
In plain English, every city in NY, other than NYC would be eligible for tax credits. No co-sponsors and it’s languishing in committee, unlikely to pass.
Bill A08870:
TITLE OF BILL :
An act to amend the tax law, in relation to enacting the “city of Buffalo historic preservation tax credit”
PURPOSE :
To create the “City of Buffalo historic preservation tax credit” in order to ensure funding for potential historic rehabilitation projects found within Buffalo and Western New York.
This bill is hyperfocused on Buffalo and requires less funding from Albany. It is co-sponsored by Peoples, Quinn, and Wirth…so, it has a mildly better chance of passing. It is also co-sponsored in the State Senate (S5681-A) by Dale Volker, Marc Coppola and Bill Stachowski. The nature of this bill is to simply apply a historic designation to a property so the developer can pursue federal tax credits.
Bill Summary A04633:
TITLE OF BILL: An act to amend the tax law, in relation to establishing a credit against income tax for the rehabilitation of historic properties
PURPOSE OR GENERAL IDEA OF BILL: To allow a state tax credit for the rehabilitation of certified historic structures equal to the amount claimed under section 47 of the Federal Tax Code.
This bill had previously been introduced in 2001, 2002, 2003, and 2004. It still languishes in committee but, has numerous co-sponsors. This is co-sponsored in the State Senate (S2431-B) by Dale Volker.
Hopefully, one of these bills will pass both the Assembly and Senate this year. If we are to continue the downtown renaissance, it is absolutely essential that developers be allowed to pursue historic tax credits at the federal level. Pick up a phone and call your local assembly member or State Senator to voice your support for the bills noted above.
Christopher Smith is the author of the blog BuffaloGeek. This column originally was posted on BuffaloGeek.
© Christopher Smith, 2006.
The opinions expressed herein are solely those of the author and do not represent those of the WNY Coalition for Progress.
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