Higgins seeks extension on tax-credit program
Rep. Brian Higgins said he has introduced a measure that will see the New Markets Tax Credit program remain in place through 2016. The 11-year-old federal program is due to expire at the end of this year.
Higgins said the program, which offers federal tax breaks to developers who undertake the restoration of designated historic building, has played a key role in a number of high profile projects moving forward. Among them the renovations of such downtown landmarks as the Electric Tower, Babeville. the Oak Street Lofts and the Thomas Beecher Innovation Center.
Since 2005, $64 million in New Market Tax credits have leveraged more than $141 million of private-sector investment in various downtown Buffalo projects.
“For older cities like Buffalo, there is great potential to take charge of our own future by reclaiming our past,” Higgins said.
The program provides critical gap financing historic renovations. Such projects can carry price tags that run 20 percent or more than traditional new construction.
Paul Iskalo, Iskalo Development founder and chief executive officer, said the tax credits made his acquisition and renovation of the 1912-era Electric Tower financially viable.
“It was a complex project but the tax credits gave me the financing necessary to the fill the gap,” Iskalo said. “Don’t under estimate how important of a tool they are.”
Tom Cassady, National Trust for Historic Preservation,vice president of government relations, said the New Market Tax Credits coupled with the federal Historic Tax Credit often times provide developers with the gap financing they need to make a project fiscally viable.
“In these economic hard times, we can ill afford to cut programs like the New Market Tax Credits that have a proven track record of economic stimulus,” Cassady said.
The New Markets Tax Credit Coalition estimates that for every dollar in federal investment in historic projects, $12 in private sector investment is generated.
Higgins said he expects a vote on the extension request later this fall.