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Uniland says it won't build hotel at Northtown Center without tax breaks

Uniland says it won't build hotel at Northtown Center without tax breaks

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A rendering of the Hampton by Hilton hotel planned for a site near Amherst's Northtown Center. The Amherst IDA on Friday approved tax breaks for the $14.4 million hotel by Uniland Development Co. (Image courtesy of Uniland)

The developer of a $14.4 million Hampton by Hilton hotel at Amherst's Northtown Center says it won't proceed unless it receives nearly $1.2 million in tax incentives for the project.

Uniland Development Co. has applied to the Amherst Industrial Development Agency for property, sales and mortgage-recording tax breaks. It contends that the hotel is too economically challenging to undertake without the incentives.

The application, posted online Monday morning, says the tax breaks are merited because the hotel would boost attendance at the ice-rink complex from out-of-town hockey players, their families and other visitors. The IDA has set a public hearing for July 6 on the request.

"An on-site hotel that is part of this major tourism attraction, and will attract a significant number of people from outside our economic development region, make this project eligible for inducements based on the AIDA policy," Uniland spokeswoman Jill Pawlik said in a statement.

Uniland plans to build a 105-room, four-story hotel on a 3-acre site at 1615 Amherst Manor Drive, at the Northtown Center off Millersport Highway. The estimated cost has shifted over time, with the most recent filing to the IDA putting that figure at just under $14.4 million.

The project has received all of its required approvals from the Town Board and town Planning Board. The development has received a mixed reaction at public hearings, with proponents touting benefits for visitors and critics saying Amherst already has too many hotels.

Work can begin soon on $15.5 million hotel in Amherst

Uniland was the only developer to respond to a request for proposals seeking interest in constructing a hotel at Amherst's ice-rink complex.

Uniland is seeking $615,125 in sales tax exemptions, $89,100 in mortgage-recording tax exemptions and a payment in lieu of taxes agreement that would reduce its property tax burden by $469,131. Under an agreement with the Town of Amherst, the town would continue to own the land, but Uniland would own the hotel and make payments to the town.

The vacant parcel is tax-exempt now. Uniland would owe taxes on the hotel and, even taking into account the property-tax break, would pay nearly $1.5 million in property taxes over the next 10 years, according to the Amherst IDA.

Amherst Supervisor Brian J. Kulpa said it's up to the IDA board of directors to decide on the tax-break request. But Kulpa, who took office in January, said he wishes the previous Town Board had conducted a "clean" sale of the full parcel to Uniland instead of this lease agreement.

"To me it's already an incentivized project," he said. Kulpa added that he wants some portion of any property tax breaks earmarked for improvements to the Northtown Center site.

State law bars financing for retail projects unless the development is a tourism destination. Company officials say the project is eligible under that exception. For example, Uniland said USA Hockey has committed to making the Northtown Center the home of its sled hockey divisions if the hotel, which has universal design features, is built. That would bring an extra 7,800 visitors and nearly $3.2 million in economic impact annually to the area, said Matthew S. Drosendahl, senior loan analyst with Uniland.

About two-thirds of tournament participants at the Northtown Center are from out of town, and the typical 40-team, three-day regional hockey tournament generates $680,000 in total spending impact to the local economy, the developer said in its filing.

Uniland promises to create 24 full- and part-time jobs within two years after the hotel is finished.

Uniland said the hotel has higher-than-typical costs because, to serve the tournaments at the ice-rink complex, it would have double-sized meeting space, a double-sized breakfast area and an enlarged pool, among other features, and requires enhanced site work.

"AIDA tax abatements are necessary for the project's financial structure," the company said in its application.

Uniland also noted that its ground lease agreement with the town states it will build the hotel only if it receives tax incentives for the project.

The Amherst IDA has recent experience with a hotel project.

Amherst IDA wins appeal of Iskalo tax-break for Lord Amherst project

Iskalo Development sought, and received, a $1.07 million package of tax breaks in 2012 for the company's original $9.9 million plan to renovate the Lord Amherst in Snyder.

But after workers discovered extensive mold infestation that required replacing every interior wall, Iskalo abandoned its planned midrange project in favor of a 92-room upscale boutique hotel, which has opened as the Reikart House.

This pushed the the cost up to $19.9 million, so Iskalo returned to the IDA in 2016 to seek another $1.1 million in tax breaks by arguing the hotel was a tourism destination located in an enhancement zone. The IDA board of directors rejected the request and judges from the state Appellate Division upheld that decision.

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