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Buffalo News: ECIDA approves tax breaks for $1 million construction project

Three projects in total are approved by ECIDA Board

Wed, Dec 17th 2014 03:00 pm

 

Erie County IDA approves tax breaks so developer can begin project

BY: David Robinson

The Erie County Industrial Development Agency, going against the recommendations of its staff, approved $35,000 in sales tax breaks Wednesday for $1 million project to convert the former Christian Science Reading Room at 483 Main St. into apartments and retail space.

The agency, which had put off consideration of the project during its last meeting in October because of concerns that the incentives would make a very profitable renovation even more lucrative, backed the project with just one dissenting vote.

Amherst Supervisor Dr. Barry Weinstein said the project to convert the 6,000­square­foot building into a pair of apartments, with possible retail space on the ground floor, would renovate a historic structure in downtown Buffalo and noted that the developers, Peter and Rebecca McCauley, had warned that the work wouldn't proceed without the incentives.

"If it will make the project go, then I think it's all worthwhile," he said, calling the $35,000 in tax savings "paltry." "Everybody agrees it will be good for the City of Buffalo."

That ran contrary to the opinion of the IDA's staff, which did not recommend that the project receive tax breaks, noting that the 400 block of Main Street had been extensively redeveloped and that they didn't consider further tax breaks necessary. The staff also said the project didn't have a financing gap since the developers were funding the project with their own money.

Other IDA board members, however, said they thought the developers were being penalized for using their own money to fund the project, since that boosted the estimated return on investment from the renovation work.

"If this incentive doesn't come through, then this project is null and void," said Erie County Legislator Edward Rath, an IDA board member. "Main Street is coming back to life and this is another way we can support it."

The IDA's policy committee, which reviews each project that comes before the agency's full board, did not make a recommendation on the development, which failed to gain sufficient support from that panel's members.

The agency also approved $420,000 in tax breaks for Schneider Development's $11.7 million project to build 40 one­ and two­bedroom apartments in a series of vacant buildings at 285 Niagara Street, with space for Ru's Pierogies, a start­up food manufacturer, on the ground floor.

The project, which will include a gated 47­car parking lot, is expected to charge $1,000 to $1,100 a month in rent for the apartments, IDA officials said.

Ru's Pierogies, a gourmet pierogi manufacturer, is expected to occupy more than 9,000 square feet of

space on the ground floot. Ru's, using a generations­old family recipe, expects to sell its products through Wegmans supermarkets and local restaurants, as well as through neighborhood sales.

The project is expected to create four jobs.

The IDA board also approved $236,000 in tax breaks for a $5.4 million project to convert the former St. Margaret's Elementary School on Hertel Avenue into apartments and commercial space.

Iskalo Development plans to convert the former church school at 1391 Hertel Ave., which closed in 2012, into 23 one­ and two­bedroom apartments, along with 2,000 square feet of commercial space.

While the agency normally does not provide tax breaks for market­rate housing projects, the IDA backed the Iskalo project because it is in a distressed area.

The project, which is expected to create four jobs, would generate nearly $237,000 in new tax revenue for the city and Erie County over the next 12 years.

email: drobinson@buffnews.com

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