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Plans to build a new $3.5 million office building in Amherst's Sweet Home Center Business Park are prompting some to ask a nagging question: How much office space is too much?

According to a study that will be finalized next week by the Amherst Industrial Development Agency, the demand for multi-tenant office facilities in the town will remain strong for at least the next three years.

Amherst is home to 18 business parks with more than 590 commercial tenants. IDA Executive Director James J. Allen Friday told the IDA's board that a survey indicates 111 of the firms -- or nearly 19 percent -- are forecasting expansions within two to three years.

The IDA Board has unanimously approved an incentive package for the Uniland Partnership, L.P., developer of the 44,400-square-foot facility. The one-story office complex will be built at 33 Dodge Road and will signal the second phase of construction within the Sweet Home park.

Officials from the Amherst-based company claim the new building is needed to meet a "significant demand" for flexible multi-tenant office facilities.

But Allen said the project is economically feasible only if the IDA agrees to give Uniland a 10-year tax abatement.

"Without the assistance, the developer would have raised rents by $2.75 per square foot for the project to make economic sense. Our participation is critical," Allen said.

The payment-in-lieu-of-tax agree ment will save Uniland nearly $420,000 in property taxes, $141,343 in sales tax payments and $32,650 in mortgage recording taxes.

Allen presented a cost-benefit analysis that contends that the office facility will produce $9.1 million in long-term gains.

Uniland expects the project to attract tenants that employ 168 people with an annual payroll exceeding $3.9 million.

Planners claim the project also could spawn 133 spin-off jobs.

"We're talking about a 20 percent return on our investment," Allen said at Friday's presentation.

But Amherst resident George Richmond wondered aloud how the project's profitability will be affected once the tax abatements end.

"Do we have a track record we can look at which will confirm that these multi-tenant office projects will remain viable after the tax breaks expire? The last thing we want to do is throw away a building after only 10 years," said Richmond, a frequent participant in town meetings. He also raised concerns that the proliferation of office buildings in Amherst could cause a glut of office space similar to the problem that building owners in downtown Buffalo are facing.

Allen said the IDA has been tracking multi-tenant commercial projects for years and the research confirms that the developments thrive in the long run. He's convinced that the demand for flexible office space will remain strong into the foreseeable future.

Construction on the Uniland project could begin this spring and planners anticipate 100 percent occupancy within 18 months.

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