By: Denise M. Champagne//December 10, 2012
By: Denise M. Champagne//December 10, 2012//
U.S. Sen. Charles E. Schumer is fighting for tax credits that encourage developers to restore historic buildings.
Schumer met Monday with several local developers and Mayor Thomas S. Richards at the Academy Building, 13 S. Fitzhugh St., which is being renovated into 21 new apartments, retail and restaurant space by George Traikos.
Schumer said one of the advantages a city like Rochester has are its historic structures, which, he added, have collected cobwebs for too long. He said now that people are moving back into urban areas, the historic buildings are gems that could be the lynchpin for economic recovery and growth.
Schumer said he and Sen. Ben Cardin, D-Md., have introduced legislation — the Creating American Prosperity through Preservation Act— which would help cities like Rochester on renovation projects such as the Academy Building, and to continue progress on downtown revitalization.
The proposal would increase historic tax credits from 20 percent to 30 percent for building rehabilitation projects of $7.5 million or less, provide an additional 2 percent credit for a building that is qualified energy efficient and exempt taxing proceeds of state historic tax credits.
Schumer is also pushing to extend the New Markets Tax Credit, which is set to expire at the end of the year.
“Failure to extend it could stop the progress in its path,” he said, noting a developer can recover $390,000 in seven years from a $1 million investment, which can mean the difference between a project getting done or not getting done. He said every $1 invested in development generates $12 in the private sector.
“The math speaks for itself and we cannot afford to lose this program,” he said, adding that such projects attract people to downtown and add to the quality of life. He also said because they create jobs, they have bipartisan support in Congress.
Schumer said he is detecting much more of a sense of compromise in Congress and he is hopeful an agreement will be reached before Christmas to stop the country from going over the fiscal cliff. He said any agreement will likely include tax extensions of various programs with Congress addressing tax code changes in the spring.
The New Markets Tax Credit covers 39 percent of the cost of eligible development projects and is targeted towards low-income communities. Among the local projects that have benefited from the credit are Brooks Landing and the Kodak Hall expansion at Eastman Theater. Projects benefitting from the existing 20 percent Federal Historic Tax Credit include the Frederick Douglass Apartments, the Academy Building and the Mills II project at High Falls.
Schumer cited the work at the 140-year old Academy Building, which was the city’s first high school, as proof of what developers can do if given the tools they need to succeed. He said tax credits are key and that other projects that could benefit from them are the Cunningham Carriage Factory, Alexandria Apartments, the Cox building on St. Paul Street and the Mills III apartments in High Falls.
Traikos purchased the Academy Building in 2007 with help from federal historic tax credits, a state grant and a loan from the city for the $5.8 million renovation. He said the 20 percent federal tax credit is important, but that the state credits sealed the deal.
Traikos’ plans stalled after the recession hit. He said Schumer’s plan could help similar projects in terms of funding and accelerating the timeline. He added that preservation is one of the greenest type of projects; greener than tearing something down and building new.
Richards said two things are needed to renovate historic building: A respect for history and the mechanisms to transform them into a useful purpose
“We can make these programs work,” he said. “If we get tax credits in time, the city will make them work for this city.”
Among those also joining Schumer were Buckingham Properties CEO Larry Glazer; Chris DiMarzo, Mark IV Enterprises; Stephanie Benson, Edgemere Development; Cathy Sperrick, Home Leasing LLC; Tim Fournier, Conifer Realty; Heidi Zimmer-Meyer, Rochester Downtown Development Corp.; Carolyn Vitale, Urban League of Rochester Economic Development Corp.; and Mark Fuller, DePaul Properties.