Here is a summary of the law from www.nycom.org/
Historic Rehabilitation Tax Credit – In 2006, New York joined 27 other states that have historic property rehabilitation income tax credit programs by enacting Chapter 547 of the Laws of 2006. The creation of New York’s Historic Rehabilitation Tax Credit program was a great first step toward preserving our historic communities’ rich architecture and diverse and unique neighborhoods. However, in order to maximize its benefits, the program needs to be enhanced by increasing the incentive and providing greater flexibility so that it will be an effective tool in preserving our communities’ historic character, revitalizing blighted areas, and preventing historic properties from falling into such disrepair that rehabilitation becomes economically infeasible. The proposed bill
(A.7935-A/S.5425-A ) introduced by Assemblyman Hoyt and Senator Padavan would do this by increasing the percent of rehabilitation costs that qualify for the tax credit, removing the cap on credit value, and making the credit assignable, transferable, and conveyable to entities with NYS Income Tax liabilities. This bill passed the Senate in June but has not yet passed the Assembly. Please contact your Assembly Member regarding this important legislation. (Staff contact: Wade Beltramo)
This is from
Friday, November 23, 2007
New York needs to expand tax credits for rehabilitation projects
by Uri Kaufman For The Business Review
When construction was completed in 1872, it was hailed as the Eighth Wonder of the World.
For decades, Harmony Mills was the largest factory in North America, and for three years, the largest building in the world. Cast-iron water wheels turned miles of leather belts that spun cotton into fabric and provided thousands of jobs to people in Cohoes, N.Y., 10 miles north of Albany.
The wonder was long gone in the year 2000. By then, the mills looked like a dead Empire State Building lying on its side, a quarter-mile-long rotting carcass of broken windows, crumbling façade and raining bricks. And as go the mills, so goes Cohoes. The city lost a quarter of its population between 1950 and 2000.
Through years of hard work, a portion of this Victorian-era factory has been converted into loft apartments. But the entire job might not get done at Harmony Mills--or even started in the thousands of other vacant or underutilized buildings in upstate New York--unless the state Assembly passes an expanded rehabilitation tax credit bill (A.7935-A/S.5425-A) that will revitalize our cities, safeguard our architectural legacy, and even benefit the environment.
The law currently allows a federal tax credit equal to 20 percent of the costs of restoring a historic building. Accordingly, $10 million spent restoring a historic building will result in a tax credit worth $2 million. While that sounds generous, when the expense of environmental remediation necessary in most older buildings is considered, along with the sheer cost of bringing an old building into compliance with modern building codes, the federal credit alone just isn't enough to get many of New York's historic commercial and industrial buildings to the finish line. It's a lot easier to build a sports car from scratch than to convert an old tractor.
New York already provides a rehabilitation tax credit to complement the federal credit, but it's capped at just $100,000--hardly enough additional incentive to make many projects viable. Smaller projects that might benefit from the existing credit are important, but these few projects aren't going to provide the momentum to jump-start or sustain community revitalization on the scale that is needed in Buffalo, Binghamton or other struggling upstate cities.
What New York needs is a cutting-edge rehabilitation incentive like the program in Rhode Island. Restorations of historic buildings there are eligible for a state tax credit worth fully 30 percent of the rehabilitation costs in addition to the federal credit value.
Rhode Island's credit has fueled an urban renaissance, both in Providence and in smaller municipalities throughout that state. In return for a one-time tax credit investment now, cities will reap the redevelopment benefits for decades to come: benefits that include job creation, increased sales and property tax revenue, environmental improvements and new housing in city centers.
The true incentive of the rehabilitation tax credit program is that developers only get out what they put in--nothing ventured, nothing gained. Historic tax credits effectively target ruined or rundown buildings for restoration and reuse. That approach in Rhode Island has resulted in that program's reputation as the most successful economic development program in state history.
Restoration isn't just about preserving our architectural heritage. Restoring historic buildings prevents open space from being developed, and prevents sprawl by reinvesting in the buildings and infrastructure that we already have. Our cities will benefit enormously if we give businesses, developers and homeowners a meaningful incentive to make investments in downtowns and older residential neighborhoods.
New York must not miss this opportunity to invest in the economic revitalization of our older upstate cities. By strategically expanding our state rehabilitation tax credit program, the Legislature can accomplish something historic, and develop a program for that will sustain reinvestment and truly renew New York.
URI KAUFMAN is a real estate developer who lives in Lawrence, N.Y. His company, Harmony Mills Riverview LLC, has redeveloped a portion of the Harmony Mills complex in Cohoes into loft-style apartments.
This is from
Back tax break on restoring vacant buildings
First published by the Times Union Saturday, October 20, 2007
Your Oct. 14 in-depth study of vacant and abandoned buildings in Albany illustrates a problem that the Preservation League has seen all over New York state: In many cases, the cost of rehabilitation exceeds the value of the property.
A powerful tool to make rehabilitation a viable option for more homeowners is the Historic Rehabilitation Tax Credit (A.7935-A/S.5425-A), which we are urging the Assembly to consider in its upcoming special session. The legislation would dramatically expand the existing state rehabilitation tax credit program established in 2006, and would serve economic development goals in a far wider range of municipalities and neighborhoods than the current program.
The Preservation League is leading a statewide alliance of municipal leaders, environmental and smart growth groups, and business interests in supporting this measure. The proposed changes will direct reinvestment to downtowns and historic neighborhoods in urban, suburban and rural areas, catalyze the development of affordable housing units, aid the redevelopment of brownfield sites, and serve as an engine for tax base and job growth.
A five-year study by Smart Growth Rhode Island, released in September, showed that a similar historic preservation tax credit in that state has been called the "most effective economic development program in Rhode Island history."
It's time to implement an enhanced tax credit program that will have real and sustainable impacts, and give New Yorkers the tools we need to win the battle against blight.
Preservation League of New York State