The City of Niagara Falls is finalizing its application for one of eight coveted slots as a federal renewal community, which would bring tax benefits and economic incentives to businesses that locate within its boundaries.
The program seeks to help what Community Development Director John C. Drake called "the poorest of the poor": urban areas with high unemployment and low income. The city decided to submit a stand-alone application after a joint submission with Buffalo was rejected by the U.S. Department of Housing and Urban Development because the two cities are not contiguous. Buffalo and Lackawanna are going forward with a joint application.
The city's target area encompasses its three poorest census tracts, which include the Highland Avenue area and Main Street from Ontario Street to Niagara Street. The three census tracts are contiguous.
The federal program will designate 28 urban zones, 20 of which are reserved for enterprise or empowerment communities, of which Buffalo is one. Niagara Falls is competing with seven communities in New York State and "God knows how many nationwide," Drake said.
"That was one of the beauties of a joint application," Drake said. "We're competing for one of the other eight. It's definitely not a slam-dunk. It's a very competitive process. We're hoping to be competitive. In our eyes, our criteria rank right below the City of Buffalo."
Based on the 1990 census, the criteria require an unemployment rate above 9.4 percent, a poverty rate of 20 percent and 75 percent of the population living at the low- to moderate-income levels. The city's low- to moderate-income population is right at the 75 percent benchmark. But its 1990 unemployment rate was 21 percent and its poverty rate 41 percent, both more than double the minimum criteria.
In recent years, the city has been developing strategies for both areas with its Highland Avenue Brownfields Marketing Plan and Main Street Development Plan. Under the federal program, one of the requirements is for the city and its partners to promote the area in terms of taxes and streamlining the development process, including environmental cleanup efforts and making surplus properties available at below market value.
The city's partners are the Niagara Falls Empire Zone, NFC Development Corp., Center City Neighborhood Development Corp., Niagara Falls Housing Authority, Main Street Business & Professional Association, and Niagara County's Employment & Training Office and Industrial Development Agency.
Under the law enacted in December, qualifying cities can grant investors a zero capital-gains tax for resale of new businesses in the zones, employer tax credits of up to 20 percent, and deductions for investment in plant and equipment of up to 50 percent. Cities getting zone designation would be allowed increases in low-income housing tax credits and more tax breaks for businesses that spend money to improve the environment.
The program offers tax credits for companies hiring employees, starting at $1,500 for any employee hired, but going much higher for young employees and those returning to work from welfare.
Developer Richard Hastings, who wants to turn the former Jenss store on Main Street in Niagara Falls into an office building, says the lucrative tax breaks under the program "could make the difference as to whether the program could go forward or not."