The Buffalo Urban Development Corp. will borrow 50 percent more from a lender than it had originally planned for its renovation of a Northland Avenue manufacturing building as part of a state-supported, light-industrial hub.
BUDC is converting the 242,000-square-foot complex at 683 Northland into the central piece of the Buffalo Billion-funded project, designed to draw new businesses, investment and jobs to the struggling East Side neighborhood by repurposing 30 acres of longtime but now underused industrial land.
The sprawling building will eventually house the Western New York Workforce Training Center and Buffalo Manufacturing Works, which recently confirmed plans to move to the site from Main Street.
The nonprofit city-affiliated agency had planned to borrow $20 million from KeyBank as part of the bridge financing, to cover the time gap until BUDC receives the full amount of tax credits it expects. At the time, it was only seeking to complete the first phase of the project, for the training center.
But on Tuesday, the board approved an additional request for another $10 million, while extending the entire loan to 42 months instead of 30. That's because instead of doing the work in two phases over a longer period of time, BUDC will now proceed with the full project all at once, but won't get all of the tax credit money until May 2021.
"When we started 683, we always viewed this as a two-stage project, but we thought that would happen a little further down the road," said BUDC Vice President David Stebbins. "With the Buffalo Billion II and the announcement by Buffalo Manufacturing Works, that accelerated the move into Phase 2 much quicker than anticipated."
The agency ultimately expects to receive $20 million in state and federal historic tax credits, $4.7 million from New Markets tax credits and another $21.7 million in brownfield cleanup tax credits. All of the rest of the funds for the Northland project are coming from state, city or other grants. The agency may even record a "developer's fee" of as much as $1 million in the end.
"I think we've mitigated our risk to the greatest extent possible," Stebbins said. "There's virtually no dollars coming out of BUDC's pockets."