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Fidelis Care New York’s $16.5 million plan to nearly double the size of its Amherst office and add 385 jobs over the next five years has cleared two major hurdles, winning approval from the Amherst Planning Board and gaining the $2.5 million in tax breaks it was seeking from the Amherst Industrial Development Agency.

The planning board voted 6-0 on Thursday night to approve the project’s site plan, clearing the way for the developer, Uniland Development Co., to apply for building permits.

The approval of the tax breaks by the Amherst IDA on Friday removed a key financial hurdle by approving incentives that the company said were essential to making the health insurer’s local expansion viable economically and beat out competing sites in Albany and Queens for the project.

“This is a fantastic project,” said James J. Allen, the IDA’s executive director. I’m thrilled they decided to expand here rather than in Albany or Queens.”

The project would double the size of its CrossPoint office by building an 87,737-square-foot addition to the facility, which has been open for a little more than two years. Fidelis’ fast-growing local operations already employ 645 people, and the expansion is expected to increase its local staff by 60 percent over the next five years, pushing its workforce above the 1,000 mark by 2018, company officials said. The new jobs are expected to pay an average of $53,000 a year.

Edward Stachura, an IDA board member, said those new jobs and the additional economic activity that they will generate – estimated at more than $68 million – make the tax breaks worthwhile.

“These developments are investments,” Stachura said, noting that even with the tax breaks, the project is expected to generate almost $368,000 in additional tax revenue for local schools and municipalities during the 10-year period covered by the incentives. “The return on that investment over the lifetime is more than 27 times” the value of the tax breaks, he said.

The scope of the Fidelis project, and the 385 jobs the health insurer expects to create, enabled it to qualify for the most lucrative incentive package available to local businesses. Those incentives span 10 years, rather than the seven years covered by most tax break packages, and Fidelis also has a more favorable tax abatement schedule that will allow it to make no payments for the first seven years of the deal.

“This is a level very few companies can achieve, and they did,” Allen said. “It has to be a company that’s creating a boatload of jobs to qualify.”

While the IDA approved the tax breaks in a unanimous vote, agency Chairman Fredrick A. Vilonen expressed concern that the enhanced tax break package that is part of the standard guidelines that all of the IDAs in Erie County follow might be too generous, especially by allowing companies to reap 100 percent tax breaks during the first seven years.

“There are too many zeroes in there in the early years,” he said.

The IDA property tax incentives apply to any buildings and improvements that are part of the project. The companies still pay full taxes on the assessed value of the land and must pay any special district taxes and assessments. The vacant land at 490 CrossPoint Parkway currently generates $9,850 in town, county and school taxes each year. Even with the tax breaks, those payments will generate an average of more than $46,600 per year in tax revenues once the project is completed. Allen said construction could begin in about a month.

During a public hearing on the project, resident Jud Payne wondered whether Fidelis Care would proceed with the project even without the tax breaks.

“I’m of the opinion they’re going to come here either way. It’s a done deal. They’re already here,” he said. “I think it’s ridiculous for an insurance company to ask for this. They don’t need it.”

But Peter A. Sayadoff, the director of Uniland’s capital markets group, said the Fidelis project was far from a done deal.

“The abatement program that’s provided, in many cases, just gets us even. There was a real chance of them not expanding here,” he said. “You may think this is all a farce. It isn’t. This is not a done deal.”

Fidelis Care opened its current 90,000-square-foot office after receiving $2.9 million in tax breaks through the Amherst IDA. At the time, Fidelis said it expected to create nearly 140 new jobs with its expansion, but the company has exceeded that job projection by more than 70 positions.

Fidelis officials said the latest Amherst expansion will help the company accommodate additional growth and make its operations more efficient by allowing the insurer to tailor its larger local office to meet its needs.

email: drobinson@buffnews.com