Uniland Development Co., facing heavy criticism over its request for unusual taxpayer assistance for its proposed office tower for Delaware North Companies, is cutting back the scale of its project and will seek only standard tax breaks instead of anything special.
In a brief statement, the developer said that the “scope” of its massive project at 250 Delaware Ave. will be “modified and its financial plan revised.” That restructuring, it said, “has reduced the need for financial assistance,” so that the incentives it will request from the Erie County Industrial Development Agency “will be limited to the standard” programs.
The company did not specify what it will request for its $80 million project, and spokeswoman Jill Pawlik declined to elaborate.
Standard tax breaks for such large projects typically involve sales and mortgage recording tax abatements and a property tax break in the form a reduced payment-in-lieu-of-taxes, or PILOT, agreement over a period of seven or 10 years, based on the benefits to the community. The abatement on the mortgage tax is roughly equal to the administrative fee ECIDA charges, so it’s almost a wash.
Such benefits are routinely granted on major construction initiatives and company relocations, as long as they meet ECIDA guidelines for qualification. Uniland in its statement said it has met with ECIDA officials and would be filing its revised application next week. The ECIDA is closed Monday because of Veterans Day, so the soonest it could be filed is Tuesday.
Richard Tobe, deputy county executive and chairman of the ECIDA’s Policy Committee, also said he won’t comment on details until he can see the formal application. But he agreed that the company’s reference to “standard” programs appears to rule out the special financing package it was seeking.
“I want to see what their application says, but what they said … tends to lead in that direction,” he said.
However, he did not know if Uniland would still apply for $3 million to $5 million in special state grants, although Delaware North may be eligible for standard state grants for such things as job training.
“The application normally will lay that all out, and I’m waiting to see it,” he said. “We have asked them to submit it as soon as they can.”
However, the new application will trigger a restart of the entire process, including a new public hearing, which cannot take place until 10 days after the ECIDA provides public notice. So while Tobe hopes to at least brief the policy committee Friday, the project is unlikely to be ready for discussion at the agency’s next board meeting Nov. 18, pushing it to December instead.
Uniland’s decision, coming after a week of controversy and community worry, could revive its stalled project and address concerns by many business leaders and politicians that a rejection could have put Delaware North’s jobs and location in Buffalo in jeopardy.
Delaware North has said its strategic plan for the future requires new office space with significantly larger floor plans than it has now, to accommodate a more modern and more efficient layout, as well as newer technology.
It also needs adequate parking for its 350 current employees and the 65 employees it plans to add, as well as the hotel. After a two-year local search, Delaware North said only the 250 Delaware project will work.
The global hospitality and food service company has received overtures from other communities eager to capture a corporate headquarters of such a large enterprise. And while the family-owned company says it is committed to staying in Buffalo, its home for the past century, it also says that it has options and that the Jacobs family must do what is best for the company.
The business community, along with Gov. Andrew M. Cuomo, Mayor Byron W. Brown and Erie County Executive Mark C. Poloncarz, have begun rallying behind Delaware North, urging approval of its sales tax breaks to ensure the company doesn’t leave Buffalo. But it’s the Uniland portion of the project and proposed incentives that have caused the most trouble.
Overall, Uniland is seeking to build a 12-story office and hotel tower at the corner of Delaware Avenue and Chippewa Street, demolishing the 100-year-old Delaware Court Building that is now on the site.
The project features new corporate headquarters for Delaware North, which would relocate from its current home – already the beneficiary of ECIDA benefits from 13 years ago – in 110,000 square feet at Key Center at Fountain Plaza.
Besides the headquarters, the project also features a 119-room nationally branded hotel, which Delaware North would operate as a training facility for its staff, and a five-level parking ramp for about 520 spaces.
Additionally, the facility would also include space for four retail boutique stores and other amenities, plus about 90,000 square feet of additional office space either for Delaware North’s future growth or recruiting other tenants.
The parking ramp has been the subject of the most controversy, first in its design and then in its financing. Uniland says that, while construction of a parking facility costs the same as in other cities, the revenues are much lower in Buffalo because the parking fees here are lower. As a result, it faced a $10 million funding gap that it wanted city, county and state help in overcoming.
The developer sought a special property tax financing known as a “PIF,” in which it would pay the full amount owed on the project but a significant portion would be diverted to pay for the parking ramp. And Uniland wanted full reimbursement of those property taxes by the state Department of Environmental Conservation under a special Brownfield Cleanup Program incentive, because the site included a former gas station that Uniland cleaned up under state supervision, and it said the geographic location put the property in an impoverished census tract. That led to significant opposition, not only among rival developers angry over what they called a special subsidy, but also from politicians and others in the community who objected to public financing of a privately owned garage. That endangered the project’s approval, and it was tabled last Monday by the ECIDA’s Policy Committee.
The revised filing would appear to change all that, however. Pawlik, the Uniland spokeswoman, would not divulge details of the company’s revised plan. However, since the hotel and office tower never faced the financing challenge or controversy, the changes most likely involve the scope of the parking ramp or how it’s being paid for.