A Buffalo developer blasted a Republican senator Friday for singling out the renovation of the downtown Lafayette Hotel in a report about how to cut the deficit.
In "Back to Black," Sen. Tom Coburn, R-Okla., cites the Lafayette Hotel, a former Coca-Cola syrup factory in St. Louis and an historic building in Milwaukee as examples of why historic preservation tax credits should be eliminated. They appear under the heading, "End Special Interest Corporate Tax Breaks."
The recent report asserts that the program, which offers developers up to a 20 percent tax credit to buy and renovate historic buildings, is "highly duplicative of numerous other federal grant programs [available for historic preservation] or that can be supported through private sources."
"Eliminating [the historic preservation tax credit and the preservation credit for rehabilitation of non-historic structures] would result in savings of more than $7.6 billion over the next 10 years," the report said.
But Rocco Termini, the Lafayette Hotel's developer, said the claims in the report -- which he called "sort of a slap in the face of Buffalo" -- are grossly inaccurate.
He said the $40 million Lafayette Hotel project could not have gotten off the ground without both federal and state historic preservation tax credits.
"Sen. Coburn misrepresents the facts -- he 'Palin-izes' the facts," Termini said, in reference to former GOP vice presidential candidate and Alaska Gov. Sarah Palin. "One [program] has absolutely nothing to do with the other. The only duplication, maybe, is in the new markets tax credit, and that is such a small allocation that it has very limited impact on historic buildings," Termini said. The Coburn report also calls for its elimination.
Termini said the report fails to appreciate the "multipliers" -- economic spinoffs -- that the projects cited will provide.
He said the renovation of the Lafayette Hotel is creating 150 construction jobs, including 60 African-American trainees, and will result in 100 permanent jobs by April, when the building is expected to reopen as a boutique hotel, apartment building and retail establishment.
"This urban project, in the second poorest city in America, creates the critical mass you need to start developing retail and produce tax revenue, both locally and nationally, while raising the value of all the buildings in the vicinity," Termini said.
A 2010 Rutgers University study found federal historic tax credits added $4.4 billion to the U.S. treasury in inflation-adjusted dollars between fiscal years 1978 and 2008.
Coburn's report calls for reducing the deficit by $9 trillion over a 10-year period.
"The American people are tired of Washington waiting until the last minute to avoid a crisis, particularly when it is a crisis Washington itself created," Coburn said.