Key Center owners fight Uniland proposal

December 13, 2013 Updated Dec 13, 2013 at 4:23 PM EDT

By James Fink, Buffalo Business First Reporter

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Key Center owners fight Uniland proposal

December 13, 2013 Updated Dec 13, 2013 at 4:23 PM EDT

In the latest chapter of the ongoing economic development soap opera involving a proposed downtown Buffalo office building, the owners of a prominent Fountain Plaza office complex are urging the Erie County Industrial Development Agency directors to reject an incentive request being sought for the $80 million project.

And, if the incentives are approved when the agency's directors meet on Dec. 16, the group may seek a legal recourse to have them overturned.

The matter is addressed in an Dec. 9 letter the midtown Manhattan law firm of Heller Horowitz & Feit P.C., which represents Key Success LLC - owners of the Key Center at Fountain Plaza project - sent to members of the ECIDA's board of directors.

At issue is an incentive package sought by Uniland Development Corp. for its proposed 12-story, mixed-use building, planned for the corner of Chippewa Street and Delaware Avenue. The ECIDA's policy committee recommended approval during a Dec. 2 meeting.

The tax breaks, which include sales and mortgage recording incentives plus a seven-year payment-in-lieu-of-taxes package for the 472,320-square-foot project, amount to $8.2 million. Uniland's $80 million proposal will also guarantee that Delaware North Cos. will have a home for its corporate and global headquarters in downtown Buffalo.

The project has slightly more than 200,000-square-feet of Class A office space of which Delaware North will occupy 110,000-square-feet. A 120-room hotel, which will serve as a Delaware North training center for its hospitality services division, is also part of the project but not subject to ECIDA tax breaks.

Delaware North has said it will move its headquarters from the Key Center complex to Uniland's building when its lease expires in 2015.

Delaware North has pledged to sign a 20-year lease with Uniland bringing 350 jobs to the building, plus creating another 65 new jobs. Delaware North will be investing more than $17 million on its new offices.

Tax breaks for Delaware North's portion of the project were approved last month by the ECIDA board.

Key Success said it feels the tax breaks Uniland is seeking gives the Amherst-based developer an advantage in the Delaware North office space derby.

"It is difficult, if not impossible, to understand how Uniland's stated intention to leave 100,000-square-feet of pristine, brand new Class A office space empty will contribute to either the creation of jobs or economic development of the downtown Buffalo area," wrote Eli Feit, a Heller Horowitz & Feit partner.

Feit believes losing Delaware North to an incentive-backed project is unfair to his client.

County IDA incentives were approved in 1999 when Delaware North agreed to move its offices from the Goldome Court building to Key Center.

Feit, in his letter, also warns if the incentives are approved "our client has authorized us to further pursue this matter and to seek to enforce all of its legal rights in such venue as it deems appropriate."

The ECIDA incentives are the final step in what has been a long process for Uniland and Delaware North in the quest to have the project approved and constructed.

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