ALBANY – State lawmakers have reversed a plan by Gov. Andrew M. Cuomo that would have curtailed state tax credits that help support key historic preservation efforts in Buffalo and other upstate areas.
The reversal keeps intact millions in annual tax breaks that have incentivized restorations like the Richardson-Olmsted project and the Hotel @ The Lafayette.
In January the governor proposed state budget changes that developers say would have gutted a tax credit program begun in 2016 that has been especially attractive to upstate historic projects. Developers have said some projects were put on hold because of uncertainty about their financial viability without the credits.
“Luckily, we were able to not only beat back that proposal but we also put some positive changes into the law,’’ said Assemblyman Sean Ryan, a Buffalo Democrat.
Ryan, who along with some other area lawmakers pressed to undo the Cuomo plan, said some 100 projects have been completed in Buffalo and Niagara Falls areas over the years – with two-thirds of those in the city of Buffalo.
Developers say the tax subsidies are needed to help pay for rehabilitation of historic buildings and brownfields that otherwise would have remained shuttered or unused.
With the state facing a multibillion-dollar budget, Cuomo proposed a number of tax code changes, including $1 billion in higher taxes. Cuomo’s plan called for capping all tax credits, deferring benefits for at least three years and having the state follow changes in federal tax law that lower the annual amount of credit that could be claimed.
But Ryan said those ideas were undone by the Assembly and Senate. First, the new budget will extend the historic tax credit for five additional years; it had been set to run out in 2019. It “decouples” the state tax credit from the new federal tax law that would have paid out credits over a five-year period.
“We keep our New York State policy and return the credit in one chunk in one year,’’ Ryan said, noting that most developers could not have afforded to wait five years to be fully credited for their expenses.
The deal also permits projects located in qualified census tracts to remain qualified for a period of two years if the census tract changes. A new set of census tract data is due out sometime in May.
“It’s the greatest tax credit for upstate New York,’’ Ryan said. Citing a number of small to major projects over the years, he added, “None of those would have started were it not for the historic tax credit.’’
The Buffalo News recently reported that more than $3.5 billion has been invested in historic preservation credits statewide from 2015 to 2017, according to Preservation Buffalo Niagara, with more than 60 percent of the credits going toward upstate development projects.