Rochester's downtown revitalization, after years of planning, and stops and starts, is finally becoming a reality. Main Street is undergoing a remarkable transformation, from a stark, vacant-looking corridor to a much more attractive place to work and live. Many of the city's most venerable historic buildings have been repurposed into a mix of housing, light retail, and entertainment. And more projects are in the pipeline.
But downtown's renaissance could be in serious jeopardy, says Wayne Goodman, executive director of the Landmark Society of Western New York. Much of the private investment in – for example, the $200 million Sibley Square project – was spurred by federal and state historic tax credits. The programs each give developers a 20 percent tax credit on their investments, a substantial lift toward projects that are often hugely expensive to undertake, Goodman says.
While the federal version of the Historic Tax Credit remains in the federal budget, the state version was not included in Governor Cuomo's proposed 2018 budget.
"The federal and state Historic Tax Credits are the primary tools to make these projects move forward," Goodman says. "The Sibley building is largest project in our community. It's a massive building. If you don't redevelop it then what do you do with it? It turns into a maintenance problem, a magnet for more problems in the area, and you lose an important architectural structure."
Projects like Sibley Square, which is getting the tax credits, have been a catalyst for more redevelopment, Goodman says.
The federal version of the HTC was signed into law in 1986 by President Reagan, and many states around the country followed the federal government offering their own version.
"It was created specifically to encourage redevelopment," Goodman says. "And there's been study after study that shows that there is a major economic gain from the HTC."
While the federal credit survived, investors are now required to claim the credit over five years instead of being able to claim it in the first year of a project. This diminishes the value of the credit, says Goodman. And a further complication: the state credit is linked to the federal program.
The Landmark Society and many other organizations in the preservation and building communities are urging lawmakers to do two things. One is to separate the federal program from the state's. This would leave the state version as a strong, stand-alone financing tool. Second, they want the state program extended through 2024. It's currently set to expire in December 2019. And the fear is that if the credit is not included in Cuomo's budget, it will signal instability, and projects in the pipeline could be stalled or abandoned.
While local lawmakers support the credits, the HTC may be not as important to downstate lawmakers, where the demand for real estate is extremely high. But the programs are vital to Upstate and Western New York, says Jessie Fisher, executive director of Preservation Buffalo Niagara. The tax credits have been instrumental in revitalizing that city's downtown, Fisher says.
"For the first time in many years," she says, "we have people returning into the city to live."