Congressman Brian Higgins (NY-27) was joined by Western New York small business leaders to sound the alarm on a provision excluded from the tax bill, up for a vote by the Senate and House this week that is poised to kill an economic development program creating jobs in New York.  

“If the intention of the tax cut proposal on the table is to create jobs, I can see no explanation for why the Renewal Community program extension, which has a track record of success in this area, is not included,” said Higgins, a member of the House Ways and Means Committee. “I am working to have the program included and will fight for these provisions important to businesses and jobs right here in Western New York.” 

Established in 2001, the Renewal Community program provides job creation and investment tools for businesses who decide to locate in economically distressed urban areas and employ eligible residents who live in those areas.  The 40 communities awarded this federal designation have to meet strict eligibility criteria and received no federal dollars to administer this program.  This program is a “use it or lose it” benefit as it focuses all credits and deductions on those for profit business that do what they say they are going to do – hire eligible residents, build new or renovate existing buildings.     

"In Buffalo and Niagara Falls, businesses have taken advantage of the Renewal Community program as a way to help them expand and hire new employees," said Congresswoman Louise Slaughter (NY-28) who represents the East Side of Buffalo, Niagara Falls and Rochester which each have a Renewal Community zone. "In Niagara Falls alone since 2004 new companies, like green-energy employer Globe Specialty Metals, have qualified for over $18 million in deductions in return for creating jobs and new development in our urban cores. This is what our priority must be and I believe the Renewal Community program is one worth saving.”

The tax bill package that is currently moving through the Senate does not extend the Renewal Community package.  This is inexplicable for several reasons:

1. this is a proven job creation tool for businesses of all sizes that invest in economic distressed areas;
2. the goal of the program, to revitalize these areas, is far from complete; and 
3. the Empowerment Zone program, which is very similar to the Renewal Community program, was extended.

Congressmembers Higgins and Slaughter sent a letter to Senate and House Leadership urging extension of the Renewal Community Program in the final tax cut package.  In addition Higgins is leading an effort urging his colleagues representing Renewal Community areas across the nation to join his fight to save the program.

The tax and economic development benefits provided through the Renewal Community program have been instrumental in attracting new jobs and economic investment to communities across the country that desperate need investment.  The Commercial Revitalization Deduction alone has been responsible for nearly $1.4 billion in direct investment nationwide, creating an estimated 20,000 jobs since 2002 alone.  In addition, the wage tax credit, work opportunity tax credit, and capital gains benefit benefits are critical incentives to businesses making decisions to relocate, remain, or expand within these economically distressed areas. 

The Renewal Community designation is based on unemployment, crime and poverty statistics from 1990 and 2000 census data.  Five of the 40 designated Renewal Communities are located in the State of New York:  Buffalo-Lackawanna, Jamestown, Niagara Falls, Rochester and Schenectady.  Congressman Higgins’ district includes two of these regions.  In Higgins’ district the Commercial Revitalization Deduction alone has been responsible for more than $150,000,000 in direct investment, creating an estimated 2,300 jobs since 2002. 

In October of 2009 Buffalo-based Larkin Development Company Partner Howard Zemsky provided testimony on the success of the Renewal Community program at a House of Representatives Ways and Means subcommittee hearing.  Today the Larkin at Exchange building is home to approximately 2000 employees working for over 30 companies and organizations.

In May of 2010 President Obama visited Industrial Support Inc, another Western New York company benefiting from the program.  Founded in 1995, under the ownership of David Sullivan, Industrial Support has grown from 4 to 70 employees and named one of the 50 fastest growing companies in the area.

Since 2002 the Renewal Community program has created 747 jobs in the City of Jamestown and created and retained 450 jobs in the City of Niagara Falls.

Niagara Falls Mayor Paul Dyster said, “The Renewal Community program avoids many of the alleged pitfalls of other government attempts to stimulate business in economically distressed areas.  First, since it's a tax credit, you actually have to get the project done and be making money to get the benefit.  Second, there is very little overhead, since the developer in effect gives the credit to himself while filling out his tax returns.  What could be simpler than that?  Virtually every key private sector development project that has gone forward in Niagara Falls since the Renewal Community program  was created has used it.  I fought as a City Councilman to get it established; now I'm fighting to keep it alive.  The last time it was threatened to my knowledge was in 2005, by the Bush Administration.  I don't want to go back to those days, when the federal government was threatening to turn its back on our cities."

"The Renewal Community Program has been the key to providing the necessary incentives that has brought almost $65M in outside private investment into Jamestown,” said Jamestown Councilman Vince DeJoy.  “The development and the corresponding 747local jobs created has helped to attract additional local investment, and this is precisely the type of federal program that works and it should be continued."

Congressman Higgins’ Chautauqua County and Erie County district offices are both located in historic buildings, within renewal community zones, that have seen significant improvement and job growth due to the designation and subsequent investment.