A key panel of the Erie County Industrial Development Agency approved a set of tax breaks totaling $8.42 million for Uniland Development Co.’s proposed 12-story office and hotel tower in downtown Buffalo on Monday morning.
The agency’s 13-member Policy Committee, meeting in the auditorium of the Central Library, sent the proposal to the ECIDA’s full board by an 11-2 vote, with only the committee’s two labor representatives dissenting. The board will take it up Dec. 16.
“The overwhelming support for this project by the Policy Committee was great to see,” said Uniland Vice President Michael Montante.
The overwhelming vote means Uniland jumped a key hurdle in securing final approvals for the 472,320-square-foot complex at 250 Delaware Ave., which would become the new corporate headquarters for Delaware North Companies.
The global hospitality and food service giant would relocate from Key Center at Fountain Plaza, where it occupies most of the South Tower. The developer has said that the tax breaks are a critical part of making the $93 million project work and that without the combination of sales, mortgage recording and property tax breaks, it could not meet Delaware North’s needs at a low enough lease rate.
“We don’t get days like this very often where we’re asked to steer an effort to maintain a global headquarters in our community,” said Deputy Erie County Executive Richard Tobe, chairman of the committee.
Most ECIDA committee members appeared to heed those concerns and also cited the significant financial benefit to the community. Specifically, Tobe said that, with an average annual payroll of $42.55 million, Delaware North would spend $851 million over 20 years on its local employees, plus about $100 million in charitable contributions locally, for a total of over $951 million.
Uniland did not get everything it wanted, however. The committee approved sales and mortgage recording tax breaks of $1.817 million and $400,000, respectively, plus $6.2 million in property tax abatements.
But while the much lower payment-in-lieu-of-taxes will apply for the full 10 years for the office space to be used by Delaware North, the parking ramp and unused office space will only get the benefit for seven years because it did not qualify as having a significant economic impact under ECIDA rules.
Montante said the company will try to meet further with ECIDA staff to argue for the full 10-year PILOT, but Tobe said he was confident in the agency staff’s calculations.
Uniland has been working to overcome resistance to the tax breaks for its project at the corner of Delaware Avenue and Chippewa Street. Plans call for 204,000 square feet of office space on seven floors, with Delaware North taking up 110,000 square feet, and the rest available for its future expansion.
The project features a 119-room hotel that Delaware North would operate as a training facility and test kitchen, plus conference space, four street-level retail shops and a four-level parking ramp with 380 spots. It would seek LEED certification.
Delaware North would agree to a 20-year lease, with options to extend beyond that. The company would move 350 existing jobs, paying an average of $97,000 per year, and create 65 new ones, paying an average of $70,000 per year. Another 40 people would be employed by the hotel, and the project would create 450 construction jobs.
Delaware North separately received $807,000 in sales and mortgage breaks for the $17 million interior construction of its own space, and neither the hotel nor retail space is eligible.
According to the ECIDA, the project would still generate $644,264 in additional revenues to Erie County and $3.4 million to the city over the next 10 years, and the full tax payment after the PILOT would total $1.078 million, compared with just $43,000 currently. The facility will also generate $650,000 annually in sales and bed taxes, officials said.
“This project is not about giving away taxpayer dollars,” Montante said. “It’s about generating additional tax revenues to the community. And in order to generate those additional dollars, this project must be built.”