Let’s be blunt: The state historic tax credit should be extended through Dec. 31, 2024, and decoupled from the federal historic tax credit.
Right now, it is missing from Gov. Andrew M. Cuomo’s executive budget. There is a 30-day amendment window in which that omission can be corrected. That leaves a week to 10 days before the clock runs out.
If the state historic tax credit does not make the executive proposal in that second-chance format, advocates will look for reauthorization and enhancements in one-house budget bills in the Senate and Assembly. Ideally, both the governor and legislature will act. On a matter as crucial as this to Buffalo and other areas of the state, the governor and legislative chambers should be singing from the same hymnal.
This sort of bipartisan harmony on the state historic tax credit (which sunsets on Dec. 31, 2019) was on full display recently when politicians, developers and preservationists said there should be no delay in the ability to put the credits to use and advocated for technical improvements to the state program to help rural areas.
In attendance at an industrial building being renovated by developer Rocco Termini through the use of the state and federal tax credits, they spoke with one voice. The credits have played a significant role in helping restore and renovate dozens of Buffalo buildings over the past 15 years. Termini said: “Without a strong state historic tax credit, projects like mine simply can’t happen.” He has used the credit for other notable projects, including the Hotel @ The Lafayette and Foundry Lofts.
Changes to the federal tax credit make it even more important that New York State extend and strengthen its program. Termini projected 250 jobs will be created at 155 Chandler St., the industrial building that will be used for light manufacturing. The cost to rehabilitate is high and, he said, historic tax credits “are a part of the stack of financing” developers require to complete projects.
There is another component to a legislative fix. Speakers at the news conference urged implementing a mechanism so that tax credits for projects underway are not deferred for three years, and the refundable component for five years.
The federal credit shifted to a five-year payout and as the state credit is written (due to bill drafting in 2009) the state credit is inextricably tied to the format of the federal credit. The state credit has to be delinked from the federal credit so applicants get a full state credit payout in one year, not five.
The concern remains for projects in the pipeline such as the later phases of the Richardson Olmsted Campus, the Sibley Building in Rochester and potential new projects such as the Central Terminal.
Albany needs to reauthorize the state credit so developers know it will be available in “out” years. It must decouple the program from the federal credit so the state credit does not suffer as a result of Washington’s decisions.
In addition, the state needs to consider a series of enhancements that can make the program of greater value to small projects. They would promote greater geographic distribution of the credit by allowing it to reach more rural areas, smaller towns and Main Streets.
The governor led the reauthorization effort in 2013. It is not unfamiliar territory. He enhanced the program back then under reasonably similar budgetary challenges. The commitment to the program he made in the past is the one he should make going forward.