The Niagara County Industrial Development Agency Thursday approved $2,462,519 in industrial development bonds for the second phase of Benderson Development Co.'s shopping complex on Niagara Falls Boulevard at 72nd Street, which includes the new Target store.
The agency originally approved $14 million in financing, but now the bond will be used just for Benderson's costs in acquiring the land and installing utilities and roadways, agency counsel Glenn S. Hackett said. David H. Baldauf of Benderson said Target built the store and is leasing the land from Benderson.
Hackett and Leo J. Nowak, executive director of the development agency, asked Baldauf to provide the total project cost, including the store, so that it can calculate its fee. Nowak said the agency's fee should be based on the value of the total project that benefits from the agency's payment in lieu of taxes policy, not just on the amount of bond. The agency's fee is 1 percent of the total project costs, which will be significantly higher than the $2.4 million, which Benderson is financing through the agency.
Baldauf said the project is unusual because the owner of the land and improvements are not the same.
Hackett said Benderson expects the bond to close at the end of this month or beginning of November.
The Target store is the second phase of the Benderson development, which already includes a Tops Markets' International store. The company will come back to the agency once more for the final piece of funding, Baldauf said. The first two phases include about 240,000 square feet of commercial space.
The agency, as owner of the property under the financing agreements, also granted easements for ingress, egress, parking and utilities.
In another matter, the agency approved a tentative agreement with Hospitality Motels USA Inc., owner of the Days Inn, 201 Rainbow Blvd. The negotiated settlement calls for the company to pay about $240,000 in delinquent payments in lieu of taxes over the next year, while at the same time keeping up on current payments.
The hotel owes about $1 million in back payments. At the end of the year, the agreement will be renegotiated, Nowak said. He said the agency expects the hotel will be in a better position to pay at that time because of anticipated spin-off business from the gambling casino opening in Niagara Falls, Ont.
Hackett said hopefully the settlement will keep the agency and the hotel out of court. The agency discussed the settlement in an executive session prior to taking its vote.
Also during the closed session, Hackett said the agency discussed possible litigation with the Alliance Foundation of Western New York, which has applied for $22 million in tax free bonds to buy the Niagara Splash water park. Hackett declined to divulge the nature of the potential litigation.
John P. Bartolomei, attorney and principal owner of the Niagara Venture, last month accused the agency of being part of a "secret agenda" that is holding up approval of the project. The Niagara Venture developed the park at Falls and Quay Streets in Niagara Falls.
The agency had referred the application to its bond counsel to determine if the foundation was eligible for tax exempt status.
In other business:
Heard Gary Kelsey, economic development coordinator, report the agency was able to recoup 71 percent, or $89,000, of a $125,000 unpaid loan balance from Buffalo Manufacturing Inc. of North Tonawanda through a secured sale.
Sent a proposed agreement with the county to its loan committee for some revision. Hackett said the revisions would not be substantial. The agreement spells out the terms for a $1.5 million loan from the county to the IDA to be used to help bring TeleTech Inc. here. The money would revert to the county if the TeleTech deal fell through. The changes are intended to protect the agency in case the loans are not repaid.
The agency members, acting as directors of the Niagara County Development Corp., also approved a $130,000 loan to Costanza Welding Inc. doing business as Cataract Steel Industries of Niagara Falls for an expansion expected to add 19 employees. The NCDC is the lending arm of the IDA.
The development corporation also approved two loans of $16,000 each to Diane Vacca of Hunter Homes in Lewiston and Donald Lenda of Van City in Wheatfield to be made through the county's Microenterprise Assistance Program.