Buffalo’s abundance of historic structures has made it an ideal location to benefit from the New York State Commercial Rehabilitation Tax Credit (NYSHTC). This credit has created opportunities for developers to breathe new life into historic buildings while preserving their legacy in the City’s fabric, and many projects completed in recent years have contributed to Buffalo’s broader “rebirth” story.
Buffalonians who aren’t plugged into the community development sector may have heard the term used frequently in news stories and reporting about these projects, but may not be familiar with what the NYSHTC program is and how developers utilize these credits to renovate historically significant buildings.
We’ve partnered with Hurwitz & Fine, P.C. – a full-service law firm headquartered in Buffalo that provides commercial real estate, development, and finance services—to help us break down how these credits work and how they benefit preservation efforts in the City.
“The New York State Commercial Rehabilitation Tax Credit is used primarily on projects to offset up to 40 percent of the costs of certain qualified rehabilitation expenditures. The NYSHTC can be used by the owner/developer or the credits can be syndicated to attract investors,” said Evan Bussiere, a partner at Hurwitz & Fine. “For an area like Buffalo with a considerable inventory of older structures, the NYSHTC has been a savior in the battle to save our irreplaceable historic buildings.”
Bussiere has represented several developers who have utilized this credit, assisting them from the formative stages of their property acquisition project through closing and post-closing. He handles contract negotiations, forming project specific entities, assisting with closing of construction loans, and the structuring of tax credit equity investment.
There are specific criteria that determine whether a building will be eligible for NYSHTC. In order to qualify for the NYSHTC, the structure targeted for redevelopment must be listed individually on the National Register of Historic Places or deemed by the National Park Service to be a contributing structure located in a historic district. Bussiere also notes that a preservation consultant is typically used to help complete the process to qualify the property for historic status.
“There has to be enough of the structure remaining to be restored to qualify—not just the remains of a foundation or a rendering of a once-existing building,” he said. “The project should also present a viable commercial end use since it will have to be used as an income producing property after rehabilitation.”
Additionally, to claim the NYSHTC, any structure must also be located in an eligible federal census tract with a median family income level which is at or below the NYS median family income.
As you make your way around Buffalo’s neighborhoods, you’ll pass numerous examples of historic buildings—many that sat vacant for some time—that were transformed into productive commercial or residential assets as a result of NYSHTC.
“The NYSHTC has been one of the game changers for the region,” Bussiere said. “It is hard to discuss Buffalo’s rebirth without mentioning a project that has utilized the NYSHTC—the Richardson Complex, Larkinville, Lafayette Hotel, Artspace Buffalo, Evergreen Lofts, and the Chandler Street district, the list goes on and on.”
One of the most widely recognized local examples is the renovation of the massive Richardson Olmsted campus located at 444 Forest Avenue. The complex, originally comprised of 13 buildings and 42 acres, was built in 1872 as the Buffalo State Asylum for the Insane and designed by H.H. Richardson and Frederick Law Olmsted. Over time as the field of psychiatric treatment changed, the asylum downsized and the campus was reduced, and by the 1970s all patients had been relocated and the campus was abandoned.
The not-for-profit Richardson Center Corporation created a plan for the building’s restoration, beginning with transforming its three center buildings into a boutique hotel, restaurant and architectural center. The first phase of the redevelopment was completed in 2017 with the use of state and federal historic tax credits financed through M&T Bank. Not only did the use of the credits lead to the renovation of the structure, but this modern reuse of the space that has become an asset to the city’s economy and tourism industry.
“The NYSHTC has been a key factor in saving the majority of the large-scale commercial rehabilitation projects in town,” Bussiere said. “The NYSHTC program has been such a success that the inventory of applicable structures in the downtown area has been dramatically reduced.”
Another recent notable NYSHTC project involved the transformation of 683 Northland Avenue, a historic manufacturing complex that is now home to the Northland Workforce Training Center and the anchor of the broader Northland Beltline redevelopment. Hurwitz & Fine, which serves as general counsel to the Buffalo Urban Development Corporation (BUDC), assisted the agency with the project. Historic tax credits coupled with new markets tax credits made it possible for BUDC to transform the former Clearing Niagara Plant site into a modern facility for workforce development and other uses within the advanced manufacturing and energy sectors.
“683 Northland is indicative of how saving one historical industrial building can help transform an entire neighborhood,” Bussiere said. “The programming and educational services now being offered at the project are already having an effect in the region by helping to address the growing need for qualified workers across a spectrum of industries. With additional rehabilitation projects planned in the Northland corridor that may utilize the NYSHTC, we anticipate continuing involvement in the transformative process that is bringing back our historical building stock.”
This content is part of a sponsored series in partnership with Hurwitz & Fine P.C.
Photos by Devin Chavanne