Tax breaks approved for Delaware North headquarters - The Buffalo News

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Tax breaks approved for Delaware North headquarters

By a unanimous vote, the Erie County Industrial Development Agency on Monday approved sales tax abatements of more than $807,000 for Delaware North Cos.’ new corporate headquarters.

The vote pushed the office and hotel project at 250 Delaware Ave. in downtown Buffalo over the first of two hurdles at the Erie County IDA that its developers said it must clear to move forward.

That second hurdle – a separate request by Uniland Development Co. for at least $3.2 million in tax breaks associated with the construction of the overall building and parking ramp – will be considered by the IDA next month, following a public hearing next Monday.

That second set of tax breaks has been the more controversial component of the incentive package, leading Uniland to scale back its request for taxpayer assistance by eliminating a proposal that would have allowed the developer to use money it paid through a payment-in-lieu-of-taxes agreement to pay down the borrowings it would take on to build the parking ramp. Uniland also reduced the size of the parking ramp, from a five-story facility with a capacity of 515 cars, to a four-story ramp with 380 spaces.

Monday, the Delaware North abatements, which came with a pledge by the company to add 65 new jobs over the next two years to its headquarters staff of 350, were approved with the full backing of Buffalo Mayor Byron W. Brown and Erie County Executive Mark Poloncarz, both members of the IDA board. Including both new and retained workers, the benefits equate to about $2,000 per job. The company is also getting $3.5 million in Excelsior Jobs tax credits from Empire State Development Corp.

“This is a tremendous project for downtown Buffalo,” Brown said. “This is only going to increase the interest in businesses making investments in downtown Buffalo.”

Brown said he expects the Uniland incentives to be approved next month.

“Now that Uniland has revised its proposal, I think that vote will go positively as well,” Brown said. “What Uniland is requesting is pretty standard in nature.”

Poloncarz said he is still reviewing the Uniland plan, but the elimination of the financing for the parking ramp dropped a key element of the tax breaks that he had opposed. He said there are still questions to be answered regarding the incentives tied to the Uniland portion of the project, which are four times more lucrative than the tax breaks Delaware North received.

“This does not tie up all of the loose ends,” he said.

Still, Poloncarz said the vote on the Delaware North incentives is a sign that the Buffalo Niagara region is willing to back locally based businesses. Delaware North has repeatedly said it is not threatening to move its headquarters, but also noted that a rejection of the incentives tied to the headquarters project could jeopardize future growth.

“We needed to send a message, not only to this community, but across the globe, that we support local business,” Poloncarz said.

“It’s a smart project for our community. It’s not often we can talk about a global corporation keeping their headquarters here,” he said. “It would send a bad message” if Delaware North were to move its headquarters.

Daniel Zimmer, a Delaware North vice president, said he was pleased with the unanimous vote backing the company’s incentive request.

“It was a good first step toward the completion of the 250 Delaware project,” Zimmer said after the meeting.

“I think this is a great day for Buffalo,” he said. “I think the community, as well as the board today, have been very supportive.”

He noted during the meeting that the company plans to create a new workforce development and job training program, specifically for Western New York. “We want to create a pathway for local residents to join the company,” he said. “We expect we’ll have a robust program when we move into our new building.”

The IDA vote Monday was centered entirely on Delaware North’s plan to spend $17 million to build out its portion of Uniland’s proposed 12-story hotel and office tower. The abatement would apply only to its purchases of furniture, equipment and construction materials.

The vote did not involve a separate application by Uniland for more than $3.2 million in standard sales, mortgage and property tax breaks for its $81 million portion of the project.

The project includes not only 200,000 square feet of office space – more than half for Delaware North – but also a 119-room hotel, four boutique retail stores and a parking ramp in the rear of the building.

Uniland’s request for incentives will now be the subject of a second public hearing at 8:30 a.m. Nov. 25 in the IDA’s 95 Perry St. office. It will then go to the policy committee Dec. 2, and then to the full IDA board at its 9 a.m. meeting Dec. 16 in the auditorium of the Central Library.

Uniland is not seeking tax breaks for the hotel or retail space, which are not eligible for incentives under the policy that all of the IDAs in Erie County follow.

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