A Buffalo developer and a “clean-energy” firm plan to revive a Cherry Street building as a business incubator.

Rocco Termini’s Signature Development and ENrG are teaming up on an $8.7 million project to revitalize 127 Cherry St., near the Kensington Expressway.

Buffalo-based ENrG has been researching and designing ceramic components used in high-tech fuel cells since it started six years ago, and is moving into the manufacturing phase, said John Olenick, the company’s chief executive officer. The renovated 65,000-square-foot property will include a “clean room” to support ENrG’s work.

Joining ENrG as a tenant in the Cherry Street property will be entrepreneur Tim Talley, who has launched a product line called U-Lace. The elasticized shoelaces span a single set of eyelets, so that a pair of sneakers can be dressed up with laces of multiple colors.

The Erie County Industrial Development Agency on Monday approved about $2.1 million in tax abatements to support the Cherry Street project. The incentives consist of $1.8 million in property tax abatements, $275,000 in sales tax savings and $88,000 in mortgage recording tax waivers.

Termini said he hopes to begin work in April 2010 on the 110-year-old building, and complete it in early 2011. Part of the property’s appeal was its location “right on the cusp of the medical corridor,” he said.

Termini is known for local projects including the Ellicott Lofts and Webb Lofts. For the Cherry Street project, he plans to tap into federal and state historic tax credits to help keep costs down, since incubator tenants can’t afford to pay a lot in rent.

ENrG presently uses four locations and will combine them into one at the Cherry Street building, Olenick said. “We’re forecasting significant growth through the next couple of years. This made sense for us.”

The company has 17 employees, 13 of whom are full time. It expects to grow to a total of 30 to 60 employees in the next five years, Olenick said.

ENrG has an affinity for older properties and is already accustomed to working alongside other companies in the same property, Olenick said.

Talley, whose product development company is called “Okay, What’s Next?” said he has a similar mind set. He likes feeding off the energy of working alongside other businesses, even if their work is unrelated.

Talley was formerly a senior business unit director at New Era Cap Co. He sees his U-Lace laces as appealing to true “sneakerheads” who want to give their shoes a unique look, with a mix of colors. “This basically turns a sneaker into a blank canvas,” he said.

The laces are for sale in select Journey’s and Hibbett Sports stores, and Talley said he has also an international distribution network.

Talley said his vision is to grow his company with other innovative people and launch more products. “My goal is to build ‘Okay, What’s Next?’ into a product development giant in Buffalo,” he said.

The ECIDA on Monday also approved $352,000 in tax abatements for a $2 million redevelopment project at 775 Seneca St. Chaintreuil Jensen Stark Architectural will turn the building into offices for its firm, along with residential space.