The second of the Cherrytree series of blog posts designed to highlight some recent tax credit news.
There is currently a bill moving through Congress co-sponsored by Representatives such as Martin Heinrich (D-NM) and Dean Heller (R-NV) that outlines the same tax incentives for energy storage as those that solar power receives to date. With the passage of this legislation, sources such as lithium ion batteries, flywheels, compressed air, and pump hydro would all be eligible for a 30% investment tax credit (ITC). There would be certain restrictions for the batteries: residential storage would have to be at least 3kwh, and commercial storage would have a limit of 5kwh. There is language in current legislation that permits energy storage to receive tax credit benefits, but the qualifications are so stringent on the percentage of renewable energy input that it is extremely difficult to actually reap the tax credit benefits. Nevertheless, this bill has a good outlook: it is supported by Representatives from both sides of the aisle, and it does not necessarily introduce new tax incentives (it expands the technologies that can earn these tax credits).
The New York State Department of Environmental Conservation has recently adopted amendments to its brownfields program. These changes, which took place August 12, include the following: the eligibility requirements of a brownfields site will now include the terms “affordable housing project” and “underutilized” in its qualifications, and the existing definition of a “brownfield site” will be updated to its most recent version, or the one coinciding with the brownfield cleanup program law in 2015 that will ensure the implementation of an environmental standards-based approach to brownfield site eligibility determinations.
One Seneca Tower located in Buffalo, NY could be eligible for both state and federal tax credits regardless of the fact that it is less than 50 years old, an important qualifier for the historic rehabilitation tax credit (HTC). The Tower, which is the city’s tallest building, stands at 38 stories and could be an exception to this 50 year rule because of its historical significance as a key player in shaping downtown Buffalo during the urban renewable period. Tax credit experts have noted that it is certainly possible for newer structures like One Seneca Tower to receive the HTC “if they have a level of exceptional significance”. This importance can reign from connections to deceased or significant architects, a design feature that is no longer utilized, or to history itself. However, although some believe that the Tower could qualify for historic tax credits because of its deep involvement in Buffalo’s history, this is not in of itself sufficient for eligibility: the building owner or another third party must formally ask for an assessment of eligibility in order to add it to the National Register. Buffalo’s One Seneca Tower was originally built by the architectural firm Skidmore Owings and Merrill LLP during the years 1969-1972 and cost fifty million dollars ($50 million) to construct. The building, which is 1.2 million square feet and ninety six percent (96%) empty, would rack up about one hundred to two hundred million dollars ($100 to $200 million) in reconstruction costs, not including the initial purchase price. Ground-up construction may also be impeded by the fact that demolition itself would cost at least thirty five million dollars ($35 million), which would be in excess of construction costs. Because of all of the steep rehabilitation costs and limited new construction options, it would be crucial to the building’s survival that it receive historic tax credits from the state and/or the federal government.