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The final chapter should be written in October to a more than decade-long controversy surrounding the Town of Lancaster’s former Colecraft Manufacturing Building at 3949 Walden Ave.

That’s when the town’s sale of the 74,000-square-foot building to Erie Engineered Products of North Tonawanda for $1.27 million is expected to be finalized.

It’s been a long time coming, since the sale was negotiated last December and approved in February at the town level. Leading up to the town’s final days of ownership of the building, the Lancaster Industrial Development Agency this week granted a limited special payment-in-lieu-of-taxes arrangement for three years that essentially gives Erie Engineered an estimated $6,522 in tax breaks over three years, based on the town’s 2012 tax rates.

Additionally, the agency agreed in August to sales tax and mortgage recording tax benefits for the project. Sales tax savings could amount to between $8,000 and $9,000, but officials say the value of the mortgage recording tax benefit is not yet known because the purchase has not yet occurred.

IDA Board Chairman Dino J. Fudoli, the town supervisor, backed the agency’s decision to lock in the lower assessment at $1.27 million for 2013 through 2016 – which would lead to lower taxes than if the property stayed at its current assessment of $1.35 million.

“I think where the company is going from renting to buying, it wanted to make sure it could control its costs,” Fudoli said in an interview.

The town bought the Colecraft site in 2003 for $1.6 million, with the hope to retrofit it to serve as the new police headquarters and town court, but that never worked out as renovation costs increased. The town opted to abandon the project and construct a new facility on Pavement Road for about $7 million, in the face of public criticism and to do it for less money than it would have cost to renovate the Colecraft facility.

Fudoli said the property closing is expected next month. “We don’t have anything to indicate it’s not on schedule,” he said. “Their lease didn’t expire until February 2014, and our new Public Safety Building will not be done until fall. It was mutually beneficial to both parties that this closing was long, into October.”

The lowered assessment was guaranteed as part of the town’s renegotiated sale agreement with Erie Engineered – which also is the same as the purchase price. Initially, the Town Board had approved selling the former Colecraft facility for $1.4 million, but in mid-July, the town agreed to lower the sale price to $1.27 million after the company cited needed improvements to the roof and electrical capacity of the facility.

Neil Katz, attorney for Erie Engineered, said no new jobs would be created by the relocation to the Colecraft site. The company would bring its 55 current employees to the new site, but not immediately expand its workforce.

He said that because the company – which makes shipping and storage containers used in the defense industry – will be located in a more modern facility, it hopes to become more competitive and thereby improve its business. Over the next few years, Katz said the company may create three to five new jobs.

email: krobinson@buffnews.com