Today, U.S. Senator Charles E. Schumer announced a major victory in his efforts to encourage developers to renovate underutilized historic buildings throughout Upstate New York, with the 2-year extension of the New Markets Tax Credit program, as part of the fiscal cliff deal reached on Tuesday. This critical tool to developers covers 39 percent of the investment costs for eligible development projects in urban areas. The New Markets Tax Credit program has been an important component of a number of rehabilitation projects, and its extension is key to continuing the progress that has been made in revitalizing Upstate New York's cities. The NMTC expired at the end of 2011, and is extended through 2013.
"Upstate New York is full of historic buildings and landmarks that are calling out for redevelopment and rebuilding, and I'm thrilled that the previously expired New Markets Tax Credit will again be available to spur development and create jobs in these communities," said Schumer. "We have seen the tremendous impact these programs have already had throughout cities like Buffalo, Rochester, Schenectady and the Hudson Valley, and the extension of these credits will help continue this momentum to all pockets of the state. I will continue to push for the expansion of the Federal Historic Tax Credit in the coming months."
Schumer has long been focused on developing this plan to help revitalize historic buildings and rejuvenate impoverished neighborhoods, and during fiscal cliff negotiations in recent months emphasized that it was critical for the New Markets Tax Credit to be extended. Schumer's push will now help development in downtown Buffalo, Rochester, Schenectady and elsewhere throughout Upstate New York continue on its current path. By bringing hotels, restaurants, businesses and other projects to these locations, young people, businesses and other residents would be encouraged to stay in New York's downtowns.
Schumer highlighted the importance of the New Markets Tax Credit, which helps leverage private investment and jump-start construction efforts in cities throughout the state. The NMTC program was created ten years ago in order to spur new business development and real estate projects. In exchange for investing in qualifying projects, individual investors and corporations can receive a tax credit on their federal income tax return, creating an incentive for individuals to invest. The federal tax credits are allocated to banks and other organizations that review applications and award the tax credits to investors for specific projects. Schumer had highlighted the NMTC program as one of his top priorities going into the end-of-session flurry.
Schumer also vowed to continue to push for passage of the Creating American Prosperity Through Preservation (CAPP) Act in the coming months, which would increase the Historic Tax Credit from 20 percent to 30 percent of investment costs for smaller projects that cost less than $7.5 million and make more buildings eligible for the tax credit. The CAPP Act also adds additional tax credits for including energy efficiencies in redevelopment projects and allows for any state historic tax proceeds to be exempt from federal tax. For three decades, the Historic Tax Credit has been instrumental in boosting the local economy of cities, towns and rural communities as it rewards developers who rehabilitate underused historic spaces for new businesses to use and attract new jobs. The CAPP Act increases the current 20 percent credit to 30 percent for projects under $7.5 million or less in qualified rehabilitation expenses and would incentivize the development of less-expensive projects that could attract small businesses. This is also a green bill that grants an additional two percent tax credit to projects that increase energy efficiency by 30 percent or more. Additionally, it allows for any State Historic Tax Credit to be tax exempt for federal purposes.