Without the federal New Markets Tax Credit, the Galesi Group would have had a tough time completing a $33 million overhaul to breathe new life into Center City.
Once a largely vacant structure in the center of Schenectady’s historic downtown, the four-building complex on State Street was transformed into 212,000 square feet of modern mixed-use space following a massive $33 million construction project undertaken in 2009. Galesi also used the credit to help restore the Mica Insulator Co. building on Broadway, and build the Bowtie Cinema across the street from Center City and Price Chopper’s headquarters over the former site of the Big N Plaza on Nott Street.
“You could not develop urban areas, particularly in upstate,” explained David Buicko, Galesi’s president and chief operating officer. “We are blessed and cursed with our history.”
The tax credit allows developers to recoup 39 percent of their cost of investment in cities like Schenectady, where 20 percent of the population is considered low-income. The credit has led to at least $96 million worth of redevelopment projects across the city.
But at the end of this year, the credit will expire. And if it’s not renewed on Capitol Hill, the progress of reinvigorating the state’s urban centers could grind to a halt, U.S. Sen. Charles Schumer, D-New York, told a gathering of state and local officials Monday.
“If we don’t act soon, we could lose one of these critical credits that finance so many important projects like this one,” Schumer said during a news conference at Center City Plaza. “Failing to extend it could allow countless projects to stall and new ones to never start.”
Schumer also threw his support behind the Creating American Prosperity Through Preservation Act, which proposes to boost the federal Historic Tax Credit available for rehabilitation projects valued at $7.5 million or less from 20 percent to 30 percent. The legislation proposed by U.S. Sen. Ben Cardin of Maryland in February and co-sponsored by New York’s senior senator would also offer an additional 2 percent credit for buildings meeting certain energy efficiency goals.
Schumer said extending the one credit and expanding the other will be critical to bringing to fruition plans for blighted and vacant sites across the city. He said projects to redevelop sites like the former American Locomotive plant on Erie Boulevard, the Robinson Furniture property on lower State Street and the former Foster Hotel would all benefit greatly from the credits.
“This site was just like those sites several years ago,” he said, gesturing to Center City as workers toiled away inside Johnny’s, a new restaurant under construction inside.
Alco site work
Plans are already afoot to redevelop the Alco site. The Galesi Group owns the nearly 60-acre parcel and announced the first phase of a massive redevelopment project would be the construction of a multi-story hotel and upscale apartment complex.
The former Foster Hotel was recently stabilized and is now awaiting investment to transform it into a viable site for redevelopment. Likewise, the vacant lot that exists where the Robinson Furniture Co. once stood is awaiting redevelopment.
“In the past, many of these structures collected cobwebs,” Schumer said. “We’re here to say that can’t happen anymore.”
Schumer said the credits ultimately pay hefty dividends for the communities that use them. On average, he said, every dollar worth of credit generates $12 in private investment.
“It’s vital for the future of many areas,” he said. “While downtown Schenectady is doing better than ever, the best is yet to come.”
Buicko said the credits are crucial in bringing development to urban centers. Without them, he said it’s tough for cities to compete with towns.
“We need that to level the playing field in competing with the suburbs,” he said.