WNY projects that saw construction delays will benefit
Following a request by Congressman Brian Higgins, D-NY-26, and other members, the Internal Revenue Service is granting an extension giving Federal Historic Tax Credit (HTC) applicants additional time to fulfil necessary requirements due to the COVID-19 pandemic.
In a bipartisan, bicameral letter signed by House Ways and Means Committee members Brian Higgins, Earl Blumenauer (D-OR), Terri Sewell (D-AL), Darin LaHood (R-IL) and Mike Kelly (R-PA), as well as Sens. Bill Cassidy (R-LA) , Benjamin Cardin (D-MD) and Susan Collins (R-ME) and Congressman Mike Turner (R-OH), the members requested an extension, writing: “Social distancing and stay-at-home orders have slowed the pace of HTC projects and jeopardize projects’ ability to meet statutory deadlines to qualify for the credit. In order for a building to qualify for the credit, projects must satisfy the ‘substantial rehabilitation test.’ This test provides 24-month and 60-month deadlines for determining whether the rehabilitation work is sufficient to qualify for the HTC. These deadlines are at risk of being missed as a result of COVID-19 work stoppages.”
The IRS issued a notice extending the “substantial rehabilitation test” deadlines to March 31, 2021, for 24-month and 60-month projects with previous deadlines that fall in between April 1, 2020, and March 31, 2021. The deadline extension also applies to the “transition rule,” which allows historic tax credits to be used as structured prior to the 2017 Republican tax law that weakened them.
Higgins said, “Projects have seen delays due to COVID-related construction slow-downs and supply chain disruptions. This extension provides the necessary extra time to ensure we don’t lose these valuable Historic Tax Credit projects, which will play an important role in needed economic recovery.”
Carmina Wood Morris, DPC, is an architecture and engineering firm in Buffalo that specializes in historic preservation and has a large portfolio of restoration projects in Western New York. President Steven Carmina, AIA, said, “This action is monumentally important to the many historic adaptive reuse projects suspended due to the coronavirus. All of the qualifying properties would have faced budget shortfalls as investors reduced their contributions. On behalf of the Nash Lofts development team, I want to thank all of the national representatives who lobbied for this extension, especially our own Congressman Brian Higgins who always shows up for Western New York.”
Last summer Higgins reported, in his district alone, Historic Tax Credits made over $1.27 billion in community investments possible since the program began in 1999. A map of the local projects is available here.
Additionally, Higgins fought to ensure Historic Tax Credit provisions were included in the House Democrats’ $1.5 trillion infrastructure stimulus proposal, H.R. 2, the Moving Forward Act.
In the letter, Higgins and other members pointed out the success of the program nationally: “First enacted in 1981, the HTC has been a proven success in communities large and small across America. The credit has attracted more than $130 billion in private investment, created more than 2.4 million jobs, and rehabilitated more than 44,000 buildings. HTC projects revitalize communities, spur long-term economic growth, and return more money to the Treasury than the cost of the credit – $1.20 in tax revenue for every dollar invested.”