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The Urban Renewal Agency has selected GAR Associates Inc. of Amherst to conduct appraisals on East Side properties to be acquired for the Benderson Niagara Associates factory outlet shopping mall.

GAR will conduct appraisals on 327 properties under a $194,000 contract. The firm will begin collecting background immediately. Actual appraisals will start at the beginning of March, according to William K. Clark, community development director.

Clark said property owners will be contacted this month to set up appointments. He said the appraisals are expected to be completed in 90 days, "assuming we can get into all of the properties."

He said 15 firms were asked for proposals. Prices ranged from $200,000 to $500,000. He said the $194,000 price settled on with GAR was negotiated down from $225,000.

Clark said discussions are being held with two other firms regarding follow-up appraisals. If a property owner refuses to sell and the agency has to condemn a property through eminent domain, it would need a second independent appraisal.

The agency is advancing the money for the appraisals to get them done as quickly as possible. The agency is to be reimbursed from $31 million in bonds the city is seeking for the public portions of the project, including the acquisition and demolition of properties and relocation of residents and businesses.

The city has received a $4 million Urban Development Action Grant for the project. It had anticipated borrowing $27 million, but increased interest rates and borrowing costs have dictated that the amount be increased, Mayor Michael C. O'Laughlin told members of the agency and the NFC Development Corp.

O'Laughlin has met with representatives of banks and the state to discuss the bonding in recent weeks. No agreements have been reached, but he said he has been encouraged by the discussions.

The state Job Development Authority is expected to guarantee the bonds in the event that the sales-tax revenues generated by the project are not sufficient to repay the loans. O'Laughlin said he hopes the borrowing arrangements can be prepared in time to go on the agenda of the authority's March board meeting.

O'Laughlin said he is still looking seriously at dropping out of the county's sales tax distribution system if the county doesn't share in the cost of financing the mall. The county currently receives 3 percent of the 7 percent sales tax collected in the county and splits it with all of the municipalities.

The city receives a percentage of all of the sales-tax revenues generated in the county. If the city drops out of the county system, it would receive a larger portion of those revenues generated in the city and none of the revenues generated in the rest of the county.

Since the state will not release information about where sales tax revenues are generated the city cannot determine if it would be harmed by breaking with the county.

But, O'Laughlin said based on estimates and calculations he has been able to obtain, he believes the city would not be harmed. And, aisals
ite in March
since the current county formula is based on population, the city could lose revenues after the 1990 census because it is expected that the city's population has dropped.

O'Laughlin said he is leaving the door open for further discussions with the county regarding the mall financing, but he said "maybe we should be negotiating an increase in the formula for the city."

Councilman Jacob A. Palillo, who has opposed a break with the county system, said:

"You give me a guarantee that it's not going to cost the taxpayers and the city any money and I'll give you a yes as big as this room."

O'Laughlin and Larry Krizan, executive director of the agency, said there are no guarantees.

But, Krizan said, if the state agrees to guarantee the loans, the city's risks are minimal. If the event of a default, he said, the city has pledged the NFC's assets of about $3 million and the property taxes from the project.

The project is expected to pay the city $357,000 in property taxes starting in the fourth year of a 25-year in-lieu-of-tax agreement. Krizan said the city's real loss would only be about $120,000 in property taxes the city receives from the project area now.

Krizan also reported that a City Council fact-finding tour to another mall to examine its impact on the surrounding community had been postponed to Feb. 24 from Feb. 17. He set a meeting of the agency and NFC for Feb. 25 to review the results of the Council's tour. Krizan said the as-yet-unidentified mall to be visited is not a Benderson property, but is similar to the mall the firm is proposing for the city.

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