Schenectady, N.Y. – Mayor Brian U. Stratton today announced that the U.S. Department of Housing and Urban Development (HUD) has approved a major expansion of Schenectady’s federally designated Renewal Community (RC), making a large portion of downtown Schenectady eligible for more than $60 million in federal tax credits through the end of 2009.
“The expansion of Schenectady’s Renewal Community will significantly enhance our ability to bring new businesses and jobs to our downtown, providing an added boost to the resurgence already underway in Schenectady,” Mayor Stratton said.
Mayor Stratton said one of his first priorities upon taking office in 2004 was to work with Senators Charles Schumer and Hillary Clinton to expand the RC program in Schenectady. In February 2004, Senator Clinton came to Schenectady with mayors from other Renewal Communities for a conference to help local officials learn how to take full advantage of the federal incentive program begun under President Clinton in 1993.
“As a direct result of Senator Clinton’s RC conference in Schenectady, and her work with Senator Schumer, legislation was introduced to expand the RC boundaries in Schenectady so we could maximize the benefits of this program to build our tax base and create new jobs,” the Mayor said.
Under the legislation approved by Congress, all of downtown Schenectady, the Vale and Central State Street neighborhoods to Route 7, portions of Schenectady’s riverfront including the Alco Plant and Riverside Tech Park, the former Big N Property, portions of the GE plant, part of Mont Pleasant and lower Eastern Avenue will be included in the Schenectady RC.
Mayor Stratton said under the previous city administration, Schenectady was widely seen by federal authorities as doing far less than the nation’s other 39 RC communities to promote and utilize incentives available under the federal program.
“With our aggressive and pro-active economic development team of the City, County and Metroplex, we will not take full advantage of this legislation moving Schenectady to the forefront of the RC program,” Mayor Stratton said.
Last fall, President Bush signed into Law the American Jobs Creation Act of 2004 (Public Law 108-357). Section 222 of the Act includes language authored by Senator Clinton to expand Schenectady’s RC. HUD gave final approval to the RC expansion for Schenectady and Corpus Christi, Texas last week.
Under the RC program, companies that agree to create jobs, invest in the community and hire residents from the local community, are eligible for wage tax credits, commercial revitalization deductions, zero capital gains for assets held over five years and other benefits.
Schenectady will receive an allocation of $12 million in commercial revitalization deductions for each year through the end of 2009. Instead of depreciating real estate investments over 39 years, investments in the Schenectady RC can be deduced in equal amounts over 10 years or in 1 year using half the amount of eligible deduction.
“This accelerated depreciation formula, coupled with zero capital gains on improvements if they property is held for more than 5 years, create a powerful incentives for firms to invest in new or rehab properties within Schenectady’s RC,” Mayor Stratton said.
Susan E. Savage, Chair of the Schenectady County Legislature said, “By Coupling the RC program with the Empire Zone and with Metroplex, we provide a powerful triple play for companies interested in growing their business. Now that Schenectady County has unified its economic development effort, we will be able to utilize all of these assets to bring new jobs and investment to our community.”