A leading local architect specializing in historic preservation urged area developers Wednesday to take advantage of the state's new historic rehabilitation tax credit to revitalize the city by renovating both commercial and residential properties.
Speaking to the developer-dominated board of downtown's Buffalo Place, Clinton E. Brown, president of Clinton Brown Company Architecture PC, touted the new benefits offered under the legislation signed July 29 by Gov. David A. Paterson.
The new law provides for a 20 percent credit against income taxes for the costs of rehabilitating a historic property, up from 6 percent in the past. Together with an equivalent federal credit, developers can now reduce their taxes by as much as 40 percent.
"New York State has evened the playing field for reinvestment in historic properties and buildings," said Brown. "This is the biggest rehabilitation program the state has."
But the enhanced credit is only temporary, as lawmakers put a five-year sunset on it so they can evaluate it to make sure it's worthwhile. Brown encouraged those in attendance to use it and spread the word, calling it an "opportunity to transform Buffalo."
But developer Rocco Termini said it's still not enough to cover "transformational" projects, such as the AM&A warehouses or the Statler Towers. That's because the credit is capped at $5 million for commercial projects, far less than those projects would cost. So Termini and others already are working to get the law amended.
Under the legislation, the credit is available for owners of certified historic structures who undertake a certified historic rehabilitation. To qualify, the property must be listed in the National Register of Historic Places, or it must be certified as contributing to the significance of a historic district that is listed in the National Register.
Brown said about 4,000 commercial and residential properties in Buffalo are listed in the National Register either individually or as parts of historic preservation districts. Many thousands more may qualify. The credit is also focused on "distressed" census tracts, which includes almost every tract in Buffalo, Brown said.
"Most of the city is eligible," he said. "Most of upstate is eligible."
The renovation must be "substantial and must add to the investment in the building while retaining its historic character," he said.
The credit can be used retroactively for one year or saved for as much as 20 years into the future. It can be combined with the federal credit of 20 percent or the federal "New Markets" credit of 39 percent for investments in low-income communities. And it can be "transferred" to other investors within a commercial partnership or applied toward a residential mortgage, so that a buyer immediately gets a 20 percent equity stake in the building.
For owners of historic homes, the 20 percent credit for renovating is capped at $50,000, and the first buyer of a renovated home can claim the credit.
The state Historic Preservation Office will hold a pair of seminars on the credit on Sept. 30 at the Buffalo & Erie County Historical Society. The commercial seminar will be from 1 to 3 p.m., while the residential seminar will go from 5 to 7 p.m.