The company planning to reopen the Hotel Niagara went before the Niagara County Industrial Development Agency Wednesday looking for tax breaks.
Its application gives the public a look at the financing arrangements for the downtown Niagara Falls hotel project, estimated to cost slightly over $34 million.
Empire State Development selected Brine Wells Development of Syracuse to buy the closed 12-story hotel for $1. The state acquired it from the previous owner for $4.4 million in Buffalo Billion money.
A 15-year payment-in-lieu-of-taxes arrangement would accompany the $8.1 million worth of historic preservation tax credits helping to reopen the historic building.
Although a $3.5 million state grant was announced as part of the deal, the application cites only $2.1 million in grants. The financing package includes $1.5 million in "key money" from the hotel brand and management eventually chosen.
Besides the property tax incentive, the hotel is seeking a NCIDA exemption from paying sales taxes on building materials and furnishings, and from having to pay a mortgage recording tax. In all, those three benefits would save the hotel $4.85 million over 15 years, the NCIDA calculated.
Brine Wells will invest about $1.6 million of its money, the application says.
The company promised to create 30 full-time and 75 part-time jobs during the first three years of the hotel's operation, with a total payroll of almost $4.1 million a year.
Actual employment figures will be larger than that, Edward M. Riley, CEO of Brine Wells, told the NCIDA board.
"At the end of the day, it'll probably employ about 180 associates," Riley said.
Brine Wells' application shows it intends to borrow nearly $20.8 million from banks to pay for its project.
Riley said he's talking to M&T Bank about providing a mortgage on the hotel. M&T was a lender for Brine Wells' successful reopening of the Hotel Syracuse as a Marriott in 2016.
NCIDA member Joan G. Aul, a vice president of M&T, abstained from voting to consider the application and set up a public hearing, the date for which has not yet been announced.
US Bank, which purchased historic preservation tax credits for the Syracuse project, is interested in doing so for the Niagara Falls project, too, Riley said.
The project is targeted for completion on March 17, 2020, Riley has said. The new hotel will have 160 rooms, two restaurants and two ballrooms.
If Brine Wells meets its target date, the 15-year PILOT would take effect March 1, 2020, said Mark J. Gabriele, the NCIDA's counsel.
Riley said his deal with the state requires him to open an "upper-upscale" hotel with a national brand. Marriott, Hilton and Wyndham are possibilities.
Although the tourism market is a big factor in the success of any Niagara Falls hotel, the Hotel Niagara needs to be a popular location for local events, Riley said.
"The tourists are only here for so long," Riley said. "It's a good business to have, don't get me wrong, but ... off-season, we've got to fill the hotel."
He said a municipal parking lot, separated from the hotel by a church, will provide the parking the hotel needs: about 200 spaces for overnight guests and 100 spaces for people attending events. The city and Brine Wells have not yet reached an agreement for the lot's use.