Benderson Development plans to expand a distribution center in Cheektowaga, helped by $1.2 million in incentives approved by the Erie County Industrial Development Agency.
The ECIDA board on Monday also approved $292,600 worth of incentives to back an expansion by Niagara Gear Corp. in Kenmore.
Benderson is expanding Broadway Development Park, a project estimated at $6.5 million.
The vast majority of the incentives, $927,000 of the total, will come in the form of property tax savings. The rest will result from a combination of savings on sales taxes and mortgage recording taxes, according to ECIDA figures.
The expansion, consisting of 130,000 square feet, is projected to create 50 jobs if tenants in the distribution business fill the space, according to the ECIDA. The total could go as high as 150 jobs if a manufacturer uses the space.
County Executive Joel Giambra voted in favor of the incentives, but first raised questions about awarding tax breaks for "speculative" projects.
Giambra questioned how often such projects are filled by new tenants from out of town, instead of companies that relocate within Buffalo Niagara and leave other space vacant, and the price tag attached in the form of tax breaks.
"Are we achieving new opportunities in this community or are we continuing just to move pieces around the board?" said Giambra, an ECIDA board member. "That's my concern. My sense is we're moving pieces around the board."
Speculative development refers to buildings constructed without a signed tenant. Tom Kucharski, president and chief executive officer of Buffalo Niagara Enterprise, defended the value of new "spec" space such as the Benderson project. He told Giambra the region needs readily available space in certain sizes and locations in order to compete for companies.
"The motivating factor for us is that this is our product," said Kucharski, whose organization markets the region. "Virtually no companies come in looking to buy space. They want to lease it, and they want it right away."
Andrew Rudnick, president and chief executive officer of the Buffalo Niagara Partnership, said the region also benefits economically in cases where a growing company expands into much larger space, even if it is a shift within the region.
Niagara Gear's expansion, estimated at $460,000, is expected to add four jobs to its current work force of 36 people. It is adding 7,000 square feet of manufacturing space and 800 square feet of engineering and office space.
The ECIDA also announced that it ended 2006 with a small operating profit, after recording operating losses from 2000 through 2005, and cut its expenses by 2 percent.
Since 1999, the ECIDA has operated without funding from Erie County or any other government entity. The ECIDA said its net profit last year was $53,950.