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MDS Laboratories, the state's largest medical testing service, plans to build an administrative center in Amherst, creating 206 new jobs.

The Amherst Industrial Development Agency's board of directors approved $1.86 million in bond financing Friday to fund the construction of a 21,000-square-foot building in the Amherst Technology Park at 55 Wilson Road.

MDS executives have told the industrial development agency they plan to use the new facility for back office work like bookkeeping, marketing and various other administrative tasks. About 180 people currently perform these tasks for MDS, but within the next few years several hundred more employees will be hired for administrative and clerical positions.

The project qualifies for a 10-year tax abatement under the agency's industrial/producer service facility policy.

One of the reasons behind the MDS expansion is the firm's recent merger with CMX Laboratories Inc., which until recently was Western New York's largest medical testing company. The merger has resulted in the combination of three testing labs into one 24-hour testing center at 395 S. Youngs Road in Williamsville. MDS also purchased CMX's network of 20 collection centers and hired its work force of 170.

Prior to the merger with CMX, MDS had a local work force of between 250 and 300 people, working at four specimen collection centers plus the S. Youngs Road laboratory.

MDS Laboratories is a division of MDS Health Group Inc., the U.S. subsidiary of MDS Health Group Ltd. of Toronto. The companies test body fluids and tissues for nursing homes, physicians and industry. Some of the work performed for businesses involves employee drug testing.

The IDA's board also approved $3 million in bond financing for a a group of doctors' offices at 850 Hopkins Road. The 30,000-square-foot facility is being developed by an Indiana businessman who is calling the project Amherst Medical Park.

The new office building is expected to employ 80 people and qualifies for a five-year tax abatement under the agency's multitenant facility policy.

In other matters, the board:

Discussed a $2.22 million plan by the New York State United Teachers union to purchase land and construct a 16,000-square-foot building. The union also will use some of the money to buy office furniture and computers.

The board approved the project, which qualifies for a five-year tax abatement under the agency's multitenant facility policy. Fifteen additional jobs will be created because of the new building. The union currently has a work force of 17.

Approved the agency's 1991 budget after 40 minutes in executive session. Next year, the industrial development agency's budget will be $1.6 million, a $960,901 increase over this year's spending level.

Executive Director James J. Allen estimated the agency's revenues will jump to $808,650, compared with $614,502 for this year.

Approved 13 subleases at six office complexes. The companies seeking board ratification of their leases included FSI Computer Marketing Service for a 4,137-square-foot office at 210 John Glenn Drive. The company, which develops computer software, estimates its employment will grow from 24 people to 100 with two years.

Agreed to the sale of two bonds totaling $6.95 million to M&T Bank. The bonds will fund the construction of a 48,072-square-foot medical office building at 295 Essjay Road. Some of the money also will be used to buy laboratory equipment, which will be used by Buffalo Medical Group.

Discussed four applications for a vacant seat on the agency's board. The applicants are: Nicholas D. Mecca, president of Abbey, Mecca & Co.; John R. Hanny III, owner of the Eagle House restaurant; Robert D. Wischerath, president and chief executive officer of ACI Controls Inc.; and Fredrick A. Vilonen, general manager of the William F. Papke Co. and a former planner for Erie County and the Town of Amherst. The Town Board will select one of the candidates to fill a seven-year term, while considering an additional term for Henry E. Kempton, the new chairman of the industrial development agency.

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