Supporters of Delaware North Cos. rallied to the hospitality and food service giant’s cause Thursday, as politicians and business leaders began speaking out in favor of granting a package of tax breaks to keep the company’s headquarters in Buffalo.
Deeply concerned about losing one of Buffalo’s most iconic companies, Mayor Byron W. Brown joined forces Thursday morning with an unlikely ally in an effort to keep it here.
Brown, an urban Democrat, and Rep. Christopher Collins, a Clarence Republican, wrote a joint letter to the chairman of the Erie County Industrial Development Agency, urging him to approve tax incentives related to Delaware North’s relocation to proposed new office space at 250 Delaware Ave.
“This is too critical to gamble with,” Brown said. “I don’t know if there’s a legitimate concern that they would move. I know there are municipalities outside of New York State that have already begun to reach out to them, and Congressman Collins and I wanted to step up and wanted to state clearly that that would be disastrous for this community and … for the economic growth we’re seeing in Buffalo now.”
Those comments were echoed Thursday night by William G. Gisel Jr., CEO of Rich Products Corp., as he posed a range of questions to Delaware North Principal Jerry Jacobs Jr., son of CEO Jeremy Jacobs, at a public forum as part of World Trade Center Buffalo Niagara’s annual meeting. The ECIDA’s chairman, Christopher Johnston, is also CEO of the World Trade Center group.
“To lose a corporate citizen like Delaware North would be just unforgivable for us,” Gisel said. “So we certainly are very supportive of whatever we can do to make sure that not just the jobs stay here but the whole influence you have and the pride that you bring to our community to have a company like Delaware North call Buffalo home. These are really important citizens and we want to keep them.”
The Buffalo-based company, which will mark its 100th birthday in two years, is seeking to get approval for a plan to move from its current home at KeyCenter to a new 12-story office and hotel tower that Uniland Development Co. wants to build at Delaware Avenue and Chippewa Street. Delaware North said that after a two-year search, that’s the only property in Buffalo – new or existing – that would meet its new needs.
Delaware North is asking for an exemption of $807,000 in sales tax for building materials, but it has been questioned by some critics because Delaware North is a global company with $2.6 billion in revenues. However, Richard M. Tobe, deputy county executive and chairman of the ECIDA’s Policy Committee, noted Thursday that the request is consistent with what ECIDA typically approves.
But the larger plan has faced heavy opposition because of the unusual nature of the tax assistance that Uniland, in particular, is seeking. Besides sales and mortgage tax breaks, the developer proposes paying full property taxes but diverting a significant portion of them to finance a five-level parking ramp and then getting reimbursed by the state because Uniland says the property qualifies for special brownfields credits.
Some ECIDA members, as well as other elected Democrats, including Assembly Members Crystal D. Peoples-Stokes and Sean M. Ryan, have expressed concerns about Uniland’s proposed tax breaks. The proposal was tabled Monday after a rival developer raised other challenges that Uniland and the ECIDA are now trying to address.
Peoples-Stokes and Ryan will hold a public hearing to discuss tax breaks for Delaware North and Uniland at 5:30 p.m. Tuesday at Evergreen Commons, 262 Georgia St. In a joint news release, the state legislators said they share the concerns that have been raised “regarding the necessity of tax breaks for this type of project.”
Meanwhile, Delaware North says that it is not making threats to leave but that it does have options elsewhere. “We are not soliciting. We are not asking for proposals. But nevertheless, we’re getting the phone calls and they’re starting to come in over the transom,” Jerry Jacobs said Thursday. “We don’t want to leave. We want to stay. I don’t want to wake up in some other town. This is my town.”
Officials in Minneapolis-St. Paul reached out to Delaware North last month, and Brown fears the loss of 350 good-paying jobs downtown. He said Delaware North, which plans to add 65 jobs at the new headquarters, is not asking for anything beyond what any other business contemplating expansion would be eligible to receive.
Brown and Collins acknowledged they have their differences but stressed the agreement they have come to on this issue.
“While there is a tradition of Delaware North maintaining its headquarters in downtown Buffalo, the economic-development community cannot rely upon tradition alone – the decision must make business sense for Delaware North,” they write, adding that losing the company would “deal a crushing blow to our region.”
The letter to Johnston does not mention Uniland’s separate application for its tax breaks, and Brown said it was specific to Delaware North’s application. Officials have sought to distinguish between them, even though both companies say the project will not go forward unless both requests are approved. Uniland says there’s a $10 million financing gap that it needs help to fill. Brown said he would look to further negotiate on that company’s application.
Jacobs cautioned about further delays. “We need to really move forward and get this thing done,” he said, “before somebody throws something our way that is hard to turn down.”
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