The quasi-city agency that is spearheading the redevelopment of the Northland Corridor area may seek to use government tax credits to help finance the $50 million-plus initiative to create a light-industrial business hub in the East Side neighborhood.
The Buffalo Urban Development Corp. is “exploring the potential of going after” both historic and brownfields credits to support the creation of a 35-acre business park and incubator around Northland Avenue, said David Stebbins, vice president of the agency. Selling those credits, from the state and federal governments, could generate an additional $5 million to $10 million in cash, on top of what’s already been allocated from city and state funds.
That could make a significant difference as the overall project moves from acquisition, analysis and planning to demolition, construction and redevelopment. The state has already pledged $44 million to the effort as part of Gov. Andrew M. Cuomo’s Buffalo Billion initiative, and Buffalo Mayor Byron W. Brown, who chairs the BUDC board, just committed an additional $4 million for infrastructure work.
But between taking down a handful of crumbling structures, creating a new job-training facility and preparing other buildings in the complex for future redevelopment, “it’s still a pretty tight budget,” Stebbins said.
Using the tax credits, as many local developers have done on dozens of redevelopment projects, would allow BUDC to raise significant extra dollars. It could sell the historic credits – which could total 40 percent of the eligible project expenses – to companies or other investors with large tax liabilities, while using the brownfield credits to reimburse some of its cleanup and construction costs.
Tax credits are of no use to a not-for-profit or government entity, however. Instead, to get the credits, BUDC would have to create one or more for-profit subsidiaries to formally own the Northland facilities.
So the agency is seeking to hire three environmental experts as contract consultants to help it navigate through the state Brownfield Cleanup Program and federal environmental regulations, as well as pursue the related tax credits. Officials said one of the experts would be Craig Slater, an environmental attorney who is also a member of the BUDC board.
“We feel there is an opportunity, if we were to create a separate entity, to take the benefit of some of the tax credits that would come to us,” said Peter Cammarata, BUDC president.
Originally conceived by the city and now backed by Cuomo, the Northland project envisions a new advanced manufacturing business zone that would attract companies to a struggling part of the East Side, bringing jobs and investments to the surrounding neighborhoods. The project also includes a workforce-training center as the centerpiece.
Using $6.7 million in Buffalo Billion funds from the Empire State Development Corp., BUDC bought a dozen properties in a concentrated geographic area along part of the old Belt Line railroad, with more than 700,000 square feet of existing manufacturing buildings. A Batavia-based firm, Mancuso Business Development Group, is now managing the properties for BUDC.