As government and business leaders fret over perceived threats by Delaware North Cos. to leave Buffalo if it doesn’t get tax breaks for a new headquarters, a former Western New York economic development official is trying to recruit the company – to Minnesota.
David Griggs, now a vice president with the economic development agency for the Minneapolis-St. Paul area, fired off an email letter to a Delaware North senior executive after reading about the difficulties that the company and its developer are having in getting approval for a new headquarters project.
In his Oct. 29 letter to Dan Zimmer, vice president of corporate finance and development at Delaware North, Griggs sought to “introduce” the company to the Twin Cities area on behalf of his new employer, Greater MSP.
He acknowledged that “DNC may not be publicly considering a move from Buffalo,” but offered to “meet with you in person to discuss how we might be able to help DNC prosper.”
Delaware North is no stranger to the Twin Cities. The Buffalo-based hospitality and food-service giant runs the concessions at Target Field and the Target Center, homes to the Minnesota Twins baseball team and the Minnesota Timberwolves basketball team, respectively. It also operates food, beverage and retail services at Minneapolis-St. Paul International Airport and three retail stores for the Twins. However, it lost out to another vendor on concession rights for the new stadium for the Minnesota Vikings football team.
Delaware North provided the letter to The Buffalo News as an example of the kind of attention it is receiving from outside of the region. “In fact, as a result of the recent media coverage on this issue, Delaware North has begun to receive overtures from other major metropolitan areas where Delaware North has business operations,” the company said in an emailed statement. “With only two years remaining on the company’s current lease, the opportunity to secure a new global headquarters location needs to move forward without delay.”
Griggs’ former boss at Buffalo Niagara Enterprise, CEO Thomas Kucharski, said he was neither surprised nor offended.
“David is a former employee who is extremely qualified in his field, and I would expect him to execute his new responsibility to his region and organization to the best of his abilities,” Kucharksi wrote by email. “This is nothing personal, it’s just the way our business works.”
Kucharski also said it’s not unusual for organizations like BNE or MSP – both public-private nonprofit organizations – to take advantage of such situations. “It is a tactic that many economic development groups employ,” he said. “The research team at BNE monitors business intelligence information daily.”
Delaware North and Uniland Development Co. are seeking tax breaks and other government incentives to support construction of a 12-story office and hotel tower at the corner of Delaware Avenue and Chippewa Street in downtown Buffalo. The 516,000-square-foot project, which involves demolition of the existing Delaware Court Building, would include about 200,000 square feet of office space, including Delaware North’s new corporate headquarters, as well as a 119-room hotel, retail space and a five-level parking ramp.
The project has been approved by the Buffalo Planning Board and Historic Preservation Board, but it has run into opposition over the tax breaks, particularly a special financing arrangement in which Uniland would pay full property taxes on the facility, but a major portion of those would be diverted to help finance the parking garage. The state has also rebuffed the company on its efforts to secure an additional grant of $3 million to $5 million.
Monday, the Erie County Industrial Development Agency’s Policy Committee tabled the proposal at the companies’ request before it came up for a vote, after questions were raised over the weekend about whether the project was truly eligible for all of the benefits. The companies said they needed more time to work out some details and answer some questions, but sources say Uniland also recognizes the intense community opposition and may look at alternatives.
Delaware North’s current lease in Key Center at Fountain Plaza runs out in 2015, and the company says its current space is inadequate for its needs. As part of the proposed project, it has pledged to create 65 new jobs, paying an average of $70,000 a year, while keeping 350 good-paying headquarters jobs in its hometown.
It asserts a commitment to Buffalo and has said it would sign a lease for at least 20 years. But it has also repeatedly noted that it has substantial operations in other locations, including Boston, California and Florida, and “other options for its headquarters.”
In his email, Griggs cited “an astonishing” number of Fortune 500 companies in the Minneapolis region – 19, including General Mills, UnitedHealth Group, Target Corp., 3M and Medtronic – that together “form a foundation that allows your enterprise to thrive.” He also cited that area’s labor pool of 1.8 million “highly qualified workers,” which he said is the “highest labor participation rate among the 30 largest metro areas.
There are more than 33 colleges and universities. And he cited the easy access to Minneapolis “by air, rail, road and water.”
He cited the average commute in Minneapolis of only 24 minutes. But as he would know after years working in the Buffalo Niagara region, the average commute here is only 19 minutes.