Buffalo developer Carl Paladino is increasing his investment in Niagara Falls by buying the Haeberle Plaza on Portage Road, and is planning a major makeover of the aging shopping plaza.
The Niagara County Industrial Development Agency board on Wednesday received an application for a 10-year tax break on the property. The owner would be 1093 Group, a real estate holding company that is an affiliate of Paladino's Ellicott Development Co.
Ellicott Development cut the ribbon last month for 24 high-priced apartments in the 20-story former United Office Building on First Street. It plans to open a 38-room boutique hotel in the building, which Paladino renamed the Giacomo.
The manager of the plaza would be Paladino's son William A. Paladino, according to Paul Gregory, an Ellicott Development official who presented the plan to the IDA board.
Gregory said the plaza will be acquired from Haeberle Associates of Lewiston for $3 million, and about $5 million would be invested in sprucing it up.
"It's a relatively old plaza that's been put together over a period of years. It's a series of buildings," Gregory said.
Gregory said Paladino plans to tear down about half of the 42,000-square-foot plaza, and to construct a new 14,675-square-foot Rite Aid drug store in the space opened up by the demolition. Rite Aid currently has a store in the strip plaza.
"They need a drive-through facility. They need larger space," Gregory said. The new store would be about twice as large as the current Rite Aid on the site.
A second new building will contain enlarged space for two other current tenants of the plaza, Planned Parenthood of Niagara County and Western New York Independent Living.
The HSBC Bank drive-through branch will stay put, although 1093 Group is buying the building, Gregory said. There will be no change to the Rent-a-Center in the plaza, but a Chinese restaurant and a nail salon will be leaving. The restaurant will move across the street and the salon may do so, too, Gregory said.
An Arby's restaurant in front of the plaza is not part of the deal and will remain in place, Gregory added.
Normally, the IDA is barred from aiding retail projects, but an exception is allowed in "distressed communities," agency attorney Mark J. Gabriele said. Such communities are defined as census tracts where at least 20 percent of the population is on public assistance or is living below the poverty level.
"This is one of the tools the agency has to revitalize highly distressed areas," Gabriele said.
Haeberle Plaza is not located in an Empire Zone, so those state incentives are unavailable.
Gabriele added that the payment-in-lieu-of-taxes, or PILOT, arrangement will cover the entire value of the property, not just the increase in value from improvements. The latter is usually the case in IDA deals.
The agency set a public hearing on the tax break for 4 p.m. Nov. 5 in Niagara Falls City Hall. A vote may be taken as soon as the IDA's Nov. 12 meeting.