Uniland Development Co. on Monday defended its bid for tax breaks for its proposed 12-story office and hotel tower downtown, but a half-dozen community activists denounced it at a public hearing as an inappropriate use of taxpayer dollars without public benefit.
Uniland is seeking more than $3.2 million in sales, mortgage recording and property tax breaks to support its proposed construction of a new headquarters for Delaware North Cos., along with a hotel, more office space and a four-level parking garage for 380 cars.
The developer claims its proposal is the only one that satisfies Delaware North’s needs, and that it took a big risk already in buying and cleaning up the contaminated brownfield site at 250 Delaware Ave. in preparation for construction.
Under the plan, Delaware North would move from Key Center at Fountain Plaza to the new building, bringing 350 existing jobs that pay an average of $97,000, while creating 65 new ones with an average salary of $70,000. Another 40 jobs would be created for the hotel.
Uniland executive Peter Sayadoff said the tax incentives are necessary to “bring this project to life,” and that “any incentives Uniland receives are passed along to the benefit of our clients.” He said Uniland can’t “offer a competitive rental rate” to Delaware North without them.
And the developer argued the property would yield much more in taxes in the future because of the development – $800,000 just in the first year compared to $47,000 now – than it would without. “The community’s return on its investment is clear,” said Sayadoff, Uniland’s director of capital markets.
But the six critics who spoke at the 35-minute hearing, many of whom said they were members or representatives of the Coalition for Economic Justice, called on the Erie County Industrial Development Agency to reject the tax breaks, saying the project is not a smart public investment. The ECIDA held the hearing, though only a few board members attended.
“The Uniland proposal is by no means as egregious as some of the projects routinely approved by the suburban IDAs... However, it still does not appear to create a net win for local taxpayers,” said Sarah E. Maurer, spokeswoman for the Partnership for the Public Good, in reading a statement from co-executive director Sam Magavern.
Instead, Delaware North would “move literally just a few blocks down the street,” while creating new vacant space in a market that can’t fill it, said Jennifer Diagostino, executive director of the nonprofit coalition.
“We should not be in the business of giving incentives to simply reshuffle existing jobs in the downtown corridor from one office building to the next,” she said. “Public subsidies should only be used for projects that will create real economic growth for our region.”
ECIDA also received dozens of written comments, most against the project. Those letters were identical in wording and similar in subject to the Coalition objections. Only a handful of other letters were submitted, supporting tax breaks.
“Every day, businesses across New York State are being called and recruited by other states,” Lt. Gov. Robert Duffy said Monday at a different event. “If the businesses leave and take these jobs with them, we all suffer. We’re in a fight.”
Uniland and Delaware North have each stressed that they are now only seeking the same standard set of tax abatements that are available to any developer or project, and which have been given out frequently. Nevertheless, approval is not a sure thing, and details are still being negotiated, Erie County Executive Mark Poloncarz said, who was not at the hearing but was interviewed at another event.
“Many of the issues that were brought up today are legitimate issues,” he said. “Many people feel Uniland has gone through this project as though they’re entitled to tax breaks. No one is entitled to tax breaks. They may qualify for them.”
The $76 million project calls for construction of the 472,320-square-foot building and parking ramp at Delaware Avenue and Chippewa Street. It includes 204,000 square feet of office space on seven floors, with Delaware North spending another $17 million on its own to outfit and occupy 110,000 square feet of it. The rest of the commercial space is designated for future expansion by the hospitality company, which has threatened to leave Buffalo if the project doesn’t go through.
“If we don’t get that approval... the project doesn’t move forward,” Uniland vice president Michael Montante said after the hearing.
The building also features four boutique retail shops on the first floor and a 119-room nationally flagged hotel, run by Delaware North as a training facility. The tax breaks are only for the office space and ramp.
Even with the payment-in-lieu-of-taxes, Uniland said, the project would generate an average of $390,000 in new tax revenues over 10 years, compared to $47,000 currently. After the 10 years, property taxes would exceed $1 million annually, while the hotel and retail stores would produce $650,000 in annual sales and bed taxes.
“If that’s not a good investment, I don’t know what is,” Montante said.
Delaware North submitted a separate request for $807,000 in sales tax breaks for the interior construction and equipping of its own space. That was unanimously approved last week by ECIDA. Delaware North is also getting $3.5 million in state Excelsior Jobs credits, while Uniland wants brownfields credits.
Comments can still be submitted online through the ECIDA website. Uniland’s proposal now goes to the agency’s Policy Committee on Dec. 2, at 8:30 a.m., followed by the full board on Dec. 16 at 9 a.m.