Legislation to raise New York State's historic preservation tax credit cap is expected to be vetoed by Governor Cuomo. Increasing the tax credit to $12 million was seen as providing a greater incentive for developers that would lead to revitalization of larger and more expensive structures.
Capped at $5 million per project, the State's tax credit program has been used successfully by developers in Western New York and throughout the state to renovate and restore buildings that have suffered from years of neglect and were in need of serious repair. Most of downtown's recent redevelopment projects have utilized the tax credit benefits.
The $5 million limit is seen as a disincentive for the development of larger, more blighted or more expensive projects. The proposed law would have continued the 20 percent credit but raise the maximum threshold to $12 million.
Rocco Termini had been counting on a raised cap to help finance conversion of the AM&A's Department store into a mix of apartments, retail space and a hotel. After his option on the property expired, Termini recently announced a pair of rehab projects along Elmwood Avenue in North Buffalo.
The veto may be a blessing in disguise. As discussed here, the main problem with the existing law is the inability to "bifurcate" the New York historic tax credit. Some are speculating that Cuomo may address the historic preservation tax credit issue in his budget that will be released next month that may extend the program beyond its current 2014 expiration date and allow for bifurcation.
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