WHEATFIELD – The Niagara County Industrial Development Agency and the Niagara Frontier Transportation Authority have bought out the private investors in a building next to Niagara Falls International Airport.
Rainbow Industrial Center was owned by a company in which the IDA, the NFTA and two brothers – Donald and Gordon Smith, of Niagara Falls – each held one-third interest.
Now, the two governmental entities are paying the Smith brothers $650,000 for their share.
“They’re older now and they’re just trying to cash out,” said Henry M. Sloma, IDA chairman and NFTA vice chairman. He abstained from voting when the IDA board approved the deal Wednesday, as he had when the NFTA board approved it.
Each agency will pay $325,000 toward the Smith brothers’ buyout. IDA attorney Mark J. Gabriele said the money comes from the cash that the entities have in their accounts in Niagara Industrial Incubator Associates, the company that owns Rainbow.
The partial ownership of the 47,000-square-foot multitenant building has been a profitable one, with the Smiths, the NFTA and the IDA sharing the profits equally.
Gabriele said that those shares have been about $80,000 a year recently. The shares could rise to $120,000 a year with the Smiths out of the picture, but there is a challenge, he said.
Rainbow’s largest tenant, Finger Food Products, manufacturer of Original Pizza Logs, is moving out next year, as it constructs its own plant in a Wheatfield industrial park controlled by the IDA.
Finger Food leases 46.4 percent of the plant, and there are four other tenants. Currently, 8,000 square feet are vacant.
Gabriele said the IDA and the NFTA intend to round up more tenants through a leasing agent, probably Eric C. Tudor of Tudor Collins.
However, the long-term future of the building is in doubt. Gabriele said the NFTA may want to acquire it and tear it down to make room for expansion of facilities at the airport, which the NFTA also owns.
In that case, the terms of the deal call for the NFTA to pay the IDA exactly 50 percent of the appraised value of the building. Rainbow Industrial Center was appraised at $2,106,000 last year, and Gabriele said that amount has been locked in for five years.
“The NFTA is going to want this building,” Gabriele said. “In the meantime, this is a heck of an investment opportunity for the IDA.”