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Developer Carl Paladino’s $14.7 million plan to convert the decaying Arctic Freezer Building next to the Niagara Thruway is getting $634,000 in tax breaks through the Erie County Industrial Development Agency.

The IDA approved the sales and mortgage tax incentives Monday for Paladino’s Ellicott Development, which plans to convert the eight-story building into a mix of office and commercial space, along with as many as 30 apartments and even a craft brewery in the basement.

IDA officials said the project will convert a building in a highly visible spot that has become an eyesore, best known for its political billboard and a faded Coffee Rich sign, into a mixed-use facility that will complement the development now going on along the inner harbor.

“This is a very important project,” said Christopher Johnson, the IDA’s vice chairman.

“It’s the adaptive reuse of one of the most blighted buildings in Buffalo that everybody sees,” said Erie County Executive Mark Poloncarz.

The plan envisions the top three floors being reserved for office space, with tenants close to signing leases for two of the three floors, IDA officials said. The three floors below that would be used for 27 to 30 apartments that are expected to rent for $1,300 to $1,900 per month, with the second floor eyed for commercial space, including a proposed banquet facility.

The first floor would have retail space, while the brewery would be located in the basement, according to plans.

The project is expected to generate $738,000 in new tax revenue for the county and city during the life of the tax breaks. Ellicott Development is expected to receive property tax breaks through a separate program administered by the City of Buffalo.

The agency also awarded roughly $1.1 million in tax breaks to McGard Inc. for an $8.25 million project that will increase the size of its factory in Orchard Park by almost 30 percent. The company makes a variety of locking wheel lug nuts and other locking nuts for various uses.

McGard plans to build a pair of 35,000-square-foot additions on each side of its existing plant at 3875 California Road, one during each of the next two years. The project is expected to lead to the creation of 23 jobs over the next two years, boosting McGard’s workforce to 480 from the current 457.

The IDA incentives include mortgage tax breaks that could be worth an estimated $70,000 to the company, but McGard may not use that portion of the aid package because it is not expected to take out a mortgage on the new buildings, said Karen Fiala, the IDA’s assistant treasurer.

The project is expected to generate an additional $200,000 in county and local taxes during the seven years the property tax breaks are in effect, IDA officials said.

The IDA also approved $156,250 in tax breaks for Automated Machine Technologies, an Orchard Park company that makes tooling machines and provides contract engineering and design services.

Automated Machine plans to build an 8,000-square-foot factory and office at 3626 California Road in Orchard Park, not far from the smaller facility the company now leases on the same road. The project is expected to create two new jobs over the next two years, boosting the company’s workforce to five people.

The agency also gave unanimous approval to a plan to move its offices to the building at 95 Perry St. that now is home to Empire State Development and the local offices of the New York Power Authority.

By bringing the IDA and, most likely, the Buffalo Urban Development Corp. offices under one roof, officials hope to improve communication and coordination between the various economic development agencies and make it easier for companies to work with them.

email: drobinson@buffnews.com