The rehabilitation of the Hotel Lafayette is expected to move forward now that lawmakers have approved changes in the state's historic preservation tax credit program.
The changes, sponsored by Gov. David A. Paterson and pushed by Assemblyman Sam Hoyt, a Buffalo Democrat, are designed to correct what developers considered deficiencies in the tax credit law.
"We're planning to start the Lafayette 60 days from the point the governor signs the bill," developer Rocco Termini said Thursday.
Termini's plans for the structure at 391 Washington St., at Clinton Street, include a high-end hotel, apartments and banquet center.
Like numerous other projects across the state, the Lafayette and another Termini project, the former AM&A's department store at Main and East Eagle streets, have been held up because of perceived failings in the law.
"Now, their projects can be done," Hoyt said. "This will result in hundreds of millions of dollars in new investment across upstate New York."
In Western New York alone, he said, nine projects with an estimated value of $175 million now can move forward.
While developers such as Termini are cheering passage of the legislation, others are likely to question how lawmakers can support a bill that might reduce tax revenues while cutting funding for schools, hospitals and others entities.
State budget officials estimate the legislation will cost the state $3 million this year, although supporters claim that income and sales taxes generated by construction projects would offset that figure.
The bill now before the governor reopens a law that developers once hailed as a boon to historic rehabilitation projects but later realized was flawed.
The changes will allow developers to help finance their projects by selling the tax credits to banks and insurance companies, which, like other investors, would be allowed to claim them on their state tax returns.
Hoyt said the new law will open the eligibility pool for the tax credit, providing more incentive to invest in rehabilitation projects.