The Erie County Industrial Development Agency, after considerable debate Monday, approved nearly $213,000 in sales and mortgage tax breaks for developer Carl P. Paladino's $5.3 million project to turn the crumbling Graystone Building into 42 apartments.
The tax breaks are part of a broader package of financial incentives, including $1.2 million in historic tax credits from the state, that the developer said is essential for the project to move forward.
"All of these things have to happen," said William Paladino, Ellicott Development Co.'s chief executive officer. "We need everything to proceed with this."
Paladino said he hopes to receive final state approval within two months on the key historic tax credits in hopes that construction could begin by July, with the first tenants moving in by November.
The IDA approved the tax breaks in a 12-2 vote, with Erie County Legislator Betty Jean Grant and County Executive Mark C. Poloncarz voting against the incentives after the developer's representatives at the meeting would not immediately commit to setting aside two to four of the apartments for low-income residents.
"I would have voted for this project if Ellicott Development had addressed Ms. Grant's questions," said Poloncarz, who during the meeting nevertheless praised the project as a perfect example of using tax breaks to breathe new life into long-vacant buildings.
The more than century-old building, located on South Johnson Park, has been vacant for more than 20 years and is one of the first multistory buildings in the country that was built using reinforced concrete technology.
That helped land the building on the National Register of Historic Places in 1987, but it also has complicated efforts to redevelop the building by making it subject to more stringent rehabilitation standards.
The building was the focus of Housing Court action last year after 20-foot trees could be seen growing through the collapsed roof of the six-story building. The $3,000 fine was forgiven after Ellicott Development spent more than $100,000 on needed repairs. Ellicott Development has owned the building since 2003.
Buffalo Mayor Byron W. Brown said the ECIDA tax breaks, when combined with the historic tax credits and property tax abatements that will be offered by the city, are "critically important" to the efforts to renovate the Graystone.
"The project, if it doesn't get all these benefits, probably will not go forward," Brown said.
While the ECIDA generally does not provide tax breaks for market-rate housing, Andrew J. Rudnick, the chairman of the agency's policy committee, said the Graystone project qualifies for incentives under the adaptive reuse policy aimed at breathing new life into long-vacant buildings.
"It meets such a clear community need," Rudnick said.
"The building is vacant and in dire need of repair. It is a target area for redevelopment by the city," he said. "The condition of this building and its ultimate use absolutely make it appropriate" for incentives.
Even with the tax breaks, the property is expected to generate more than $280,000 in additional property tax revenue over the next 13 years, IDA officials said. The project will not receive any property tax breaks from Erie County.