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Benderson Development warehouse receives tax breaks

The Erie County Industrial Development Agency on Wednesday approved more than $750,000 in tax breaks to support a $5.38 million project by Benderson Development Co. to construct a new warehouse in Cheektowaga.

The Buffalo firm wants to build a single-story 100,035-square-foot manufacturing, warehouse and distribution facility at 135 Buell Ave., aimed at meeting the growing demand for new industrial space in the market.

There are no tenants currently identified for the building, but officials said it is targeted toward “startup and expansion-minded businesses.” Retail tenants are not allowed by zoning, nor under ECIDA policy for tax incentives. Benderson has committed to creating at least 35 new jobs as part of the project.

ECIDA will provide $227,500 in sales tax breaks and $538,000 in property tax breaks.

The new project is very similar to ECIDA’s approval in April 2015 of construction of a pair of buildings by Benderson in the Broadway Development Park, also with a total of 100,000 square feet. One, for 65,000 square feet, is now under construction, while the second is pending.

Industrial firms and real estate brokers have routinely identified a shortage of readily available manufacturing space locally, and both public and private sector officials have called for construction of more so that Western New York won’t lose economic development opportunities. There has been little construction of new facilities since 2008, and CBRE-Buffalo noted in January that the vacancy rate for industrial space locally is less than 4 percent.

But Erie County Executive Mark Poloncarz expressed reservations about providing incentives on a “spec” project, although he did vote in favor. He said he wants to see evidence that such projects do result in new jobs and investment for the region. “I think it’s fair to say I’m not a real big fan of spec buildings,” he said. “While I will support this, I do want to see support that these spec buildings are creating new jobs for the region, not just shuffling the deck, with one warehouse moving from one part of Erie County to another part of Erie County. We would never have approved a project if that was the case.”

Separately, ECIDA also approved a $20,000 allocation for the University at Buffalo Foundation’s Western New York Incubator Network, to sponsor four programs and events to be held throughout the year, at a cost of $5,000 each. The funds come from a $750,000 pot that ECIDA created for “External Special Projects,” of which $600,000 has already been earmarked for projects.

The incubator network is a partnership of nine incubators – five in Erie County – that serve nearly 200 early-stage startups by helping them to grow more quickly, become more profitable and attract investors. It was started through the Western New York Regional Economic Development Council, supported through a state agency and managed by UB.

The money will provide general support for the incubator consortium, pay for embedded consultants to help startups, fund a summer “accelerator” program to link emerging student entrepreneurs with stipends, mentors, workspace, service providers and structured classes, and provide training to prepare incubator companies for their first “pitch” to outside investors.

email: jepstein@buffnews.com