Rocco Termini, gearing up for the grand reopening of the Hotel Lafayette scheduled for May 29, says the project was possible only with state historic tax credits. And the developer is pushing for improvements in those tax credits that could bring more of our historic buildings back to life.
The Hotel Lafayette, which originally opened about a century ago, underwent a $43 million transformation that put about 270 people to work on the renovations and should put about 200 people to work permanently at the various businesses that will occupy the space. The project includes a boutique hotel, 115 apartments and retailers.
This is the type of effective and sustainable economic development that the state historic rehabilitation tax credit program was intended to spur. The Lafayette project shows why it should continue. Without the credits, the building would be continuing its slide into decay. With the credits, the city has another feather in its architectural cap.
State lawmakers now have three items on their 2012 "to-do" list that will improve and extend the program, which is due to expire in 2014 after its five-year run.
Termini and four state lawmakers -- State Sens. Mark J. Grisanti and Timothy M. Kennedy, Assemblywoman Crystal Peoples-Stokes and Assemblyman Sean M. Ryan -- want to raise the per-project cap on state historic tax credits from the current $5 million to $12 million. To keep the new cap from being too costly for the state, the regional economic development councils could each designate a few projects deserving more than $5 million in tax credits.
Raising the cap will make many more properties eligible for the rehabilitation program. Even $12 million would not be enough for a few very large projects in the area, such as redevelopment of the former AM&A's department store downtown, the Central Terminal and the H.H. Richardson complex.
Two additional rehabilitation tax credit bills were introduced in the Senate and Assembly last week, and deserve support from Western New York lawmakers.
One would remove restrictions that limit the ability of out-of-state investors to partner in New York State rehabilitation projects. Many more potential investors could be attracted to rehabilitation projects in New York State if the program allowed developers to separate the New York State tax credits, which are of no use to out-of-state developers with no tax liability in New York, from the federal tax credits.
The change would spur partnerships between New York State companies with state tax liability and national investors with federal tax liability. The state would benefit by getting the maximum project investment in exchange for its tax credit dollars.
The second bill would extend the program five years, to 2019, allowing planning and financing to begin now for the next round of redevelopment projects.
The rehabilitation program has earned an extension and the technical changes that will extend its reach.
If Albany officials need any more proof of the economic effectiveness of the state historic rehabilitation tax credit program, they should attend the grand opening of the Hotel Lafayette next month. That project is a shining example of what the program is designed to accomplish.