WHEATFIELD – The planned move of Trek Inc. from Medina to Lockport cleared another hurdle Wednesday, as the Niagara County Industrial Development Agency approved a 20-year property tax break on the building to which the electronic instrument maker is to relocate.
However, Trek’s lease on that site – Building 4 of the former Harrison Radiator plant in downtown Lockport, now called Harrison Place – remains incomplete.
R. Charles Bell, city director of planning and development, said a bank’s appraisal of the 96,000-square-foot, three-story building is not finished.
Without the appraisal, 210 Walnut LLC, the city-controlled entity that owns Harrison Place, can’t complete the bank loan it needs to cover most of the tab for an estimated $4 million renovation of the largely vacant, unheated building. And without the loan terms being finalized, 210 Walnut can’t be sure how much to charge Trek for the space.
Bell said the company must pay enough to enable 210 Walnut to make its loan payments.
“We’re hoping to have something completed next week,” he said Wednesday.
The 20-year lease would give Trek the first and second floors of the building, with the third floor held open for five years in case Trek wants it for expansion. The deal also gives Trek an option to purchase the entire building at any time.
On Monday, the city’s Planning and Zoning boards approved the subdivision of the Harrison Place property to clear the way for the tax break on Building 4.
Although it’s controlled by the city, 210 Walnut is formally a private entity, which means it’s not exempt from property taxes without IDA action.
The payment-in-lieu-of-taxes agreement approved by the IDA board includes a 100 percent tax exemption for Building 4 for the first five years of Trek’s occupancy.
That was allowed under the IDA’s Opportunity Zone program aimed at luring tenants to vacant space in the downtown areas of Niagara County’s three cities.
In the sixth and seventh years, the assessed value added to Building 4 by the renovation and Trek’s relocation will be taxed at 20 percent of its full value. Taxation will be 30 percent in years 8 and 9; 40 percent in years 10 through 14; and 50 percent in years 15 through 20.
Trek, which says it has outgrown its current plant on Salt Works Road in Medina, will bring 72 jobs to Lockport and intends to add another 26 within three years.
The tax breaks, which include a mortgage recording tax exemption and a sales tax exemption on construction materials, furnishings and equipment for the new plant, will save the company an estimated $920,000 over 20 years. The annual payroll for 98 jobs is expected to top $5 million a year.
Trek moved 23 workers in research and development to 57 Canal St. in Lockport in 2011. Those workers will remain there.
The company considered moving its production facilities to South Carolina or Japan.
“We convinced them Niagara County was a good place to do business,” IDA Chairman Henry M. Sloma said.