For the second time in two years, Erie County Executive Mark C. Poloncarz is raising concerns about tax breaks requested for a development of retail businesses and apartments in Clarence.
Russell Salvatore Jr. in 2016 received $100,000 in mortgage recording and sales tax breaks from the Clarence Industrial Development Agency for his project at 6449 Transit Road, known as the Abbey.
Now, Salvatore is seeking property tax breaks for the same project, which he completed last year.
Then and now, Poloncarz objects to the tax breaks – saying they are inappropriate for a new residential and retail development.
"It shouldn't have qualified in the first place," the county executive said in an interview. He sent a letter to the Clarence IDA Friday requesting additional information about the project to verify its eligibility for any tax breaks.
Clarence IDA officials said they only provide incentives to eligible projects.
"Our policy is to follow the law. That's what we do – we follow the law," said Christopher Kempton, IDA chair.
Salvatore said the project doesn't work financially without the property tax break and said he's only asking for the same incentives other developers have received.
"If everybody else gets it, why shouldn't we?" he said.
Salvatore's Abbey is a $2.5 million, two-story building on the east side of Transit that has a mix of eight two-bedroom luxury apartments and four retail spaces. The retail includes Rebel Ride, a cycling studio; Taco Community Beer; and Village Designs, a clothing store. About one-third of the space in the 20,000-square-foot building is retail and the rest is residential.
The Clarence IDA in 2016 approved mortgage recording and sales tax breaks under the agency's adaptive reuse policy.
Poloncarz complained at the time that the project did not meet the definition of an adaptive reuse project because the existing building on the site was torn down, not reused. He threatened to sue the IDA but opted not to, saying Wednesday that county officials were not sure they would win the case.
IDA representatives said the project qualified under the agency's rules.
At the time, the agency did not grant a property tax break for the project. Salvatore was under the impression the project was eligible for a different tax break, known as a 485-b exemption, that would provide similar benefits.
Salvatore requested that tax break through the town Assessor's Office, but Clarence Assessor Albert Weber determined the Abbey didn't qualify because of the residential component.
That brought Salvatore back to the Clarence IDA for a property tax break. The property is assessed at $1.74 million, but any tax abatements only would apply to the $960,000 assessed value of the building. The IDA did not yet have an estimated value of the proposed property tax break.
Salvatore said he leaves the details on these requests to his attorney, but he said property tax exemptions were factored into the financial estimates for the development and it wouldn't be feasible without them.
"When I built this project, I took these all into consideration," said Salvatore.
The IDA is considering granting Salvatore a 10-year property tax break that would be equivalent to the break he didn't receive through the 485-b program.
A public hearing is scheduled for Thursday's IDA meeting, but nothing will be voted on until the agency's June meeting at the earliest.
Poloncarz still believes the project is ineligible for a tax break. He said tax breaks typically are granted before a project is built, not afterward.
"If this was before the ECIDA, if the developer had come back and said, 'Oops we kind of messed up, we want you to give us a tax break now,' the answer from the ECIDA would be overwhelmingly no," Poloncarz said.
Kempton said the agency is gathering the information requested by the county executive.
"We've got to finish our fact-finding on this project," he said.
Salvatore is seeking town approval for an expansion of the Abbey that would feature town houses.