A key Erie County Industrial Development Agency committee has recommended approval of tax breaks requested by Uniland Development Co. for its planned $75 million downtown Buffalo office building.
A formal votes of the agency's directors will be held later this month.
The ECIDA's policy committee approved by a 11-2 vote a series of tax breaks for the 472,320-square-foot, 12-story mixed-use building planned for the corner of Delaware Avenue and Chippewa Street.
The sales and mortgage-recording incentives plus a seven-year payment-in-lieu-of-taxes package amount to $8.2 million.
Delaware North Cos. has pledged to sign a 20-year lease with Uniland to bring 350 jobs to the building, plus creating another 65 new jobs. Delaware North will be investing more than $17 million on its new offices.
“You have to try and understand what this project means to this community,” said Deputy Erie County Executive Richard Tobe, who is also ECIDA policy committee chairman.
The project and incentives being offered separately to Uniland and Delaware North have come under fire. Critics say the companies do not need the incentives while supporters say the tax breaks are essential to moving the project forward.
Tobe said by signing the 20-year lease, which comes with a pair of 10-year renewable options, Delaware North’s local payroll alone will top $851 million during that period and the company may also be making an estimated $100 million in local charitable donations throughout the 20 years.
“That’s almost $1 billion in salaries and charitable donations,” Tobe said. “Our decisions help this play out.”
Delaware North will initally occupy 109,000 square feet of the building’s 204,000 square feet of Class A office space. It has options on another 80,000 square feet.
In addition, a 120-room nationally branded hotel, another key element of the project, will be used by Delaware North as a training center for its tourism and hospitality divisions. The hotel portion of the project will not receive any tax breaks.
The four-level parking ramp will be used exclusively for the hotel and Delaware North employees.
“We view this as an iconic building in the heart of the central business district and a positive impact on the Delaware Avenue streetscape,” said Michael Montante, Uniland vice president.
Currently, the property pays just $47,000 in annual real estate taxes. Just in the building’s first year of operation, it will generate $196,000 in new property taxes. Full taxes, including sales and bed-tax dollars, will approach $800,000.