Ellicott Station

Last month, the Genesee County Economic Development Center issued an open letter to Gov. Andrew Cuomo asking for his help in getting final approval on a complex financial package -- involving private investment, state and local tax incentives, grants, and investment credits -- from state officials.

Following an event today about workforce development (more later), we asked Lt. Gov. Kathy Hochul about the delay of the project. She says the governor's office is working to finalize a financial package for Ellicott Station.

The Ellicott Station project will transform the former Della Penna property on Ellicott Street from a crumbling and distressed property into a mixed-used development that will include housing, office space, and a restaurant/brewery.

Genesee County Economic Development Center directors today accepted an application for $156,312 in tax incentives from Provident Batavia LLC, setting the stage for a public hearing, likely to take place at the Batavia Town Hall at a date to be announced.

In presenting the application to the board, Mark Masse, GCEDC senior vice president of operations, acknowledged the company, known as SCP Distributors LLC at 4430 Saile Drive, has successfully made all of the payments required per a 2005 payment in lieu of taxes agreement and is now on the tax rolls.

“The company is doing what they said they would do,” Masse said, noting that its number of full-time equivalent employees has grown from seven to 15 over the past eight years.

Responding to a question about a New York State Subsidy Tracker report that showed that Provident Batavia LLC lost jobs in 2011 and 2012, while receiving $25,700 in subsidies, Masse said his records reveal otherwise.

“Their application at that time stated that they would retain 12 jobs, not create 12 jobs, and what happened was that it was incorrectly inputted – doubling 12 to 24,” he said, adding that the online tracking system had its share of issues at the outset.

This new request is being tied to a 13,000-square-foot addition to the existing office, warehouse and distribution facility estimated to cost the company $1.194 million, broken down as follows:

-- $1.048 million for building cost;
-- $50,000 in land/engineering/architecture;
-- $40,000 in taxable equipment;
-- $55,750 in other expenses.

The project is estimated to produce a state and regional economic impact of $594,122 and $61,516, respectively, in property taxes over a 10-year period, and would enable SCP Distributors to retain 15 FTE’s with an average salary of $38,000, Masse reported.

Company officials are seeking property tax saving of $86,774, sales tax exemption of $57,988 and a mortgage tax exemption of $11,550. Upon approval after the public hearing, the project is expected to start in August and take about four months to complete.

SCP Distributors has more than 2,000 employees and 120,000 wholesale customers worldwide, and is part of the world’s largest wholesale distributor of swimming pool supplies and related equipment. The company is a supplier to local businesses, including Denny’s Pool World and Deep Blue Pool & Spa.

In other action, the board:

-- Approved a $10,000 contract with Clark Patterson Lee for bidding services related to the Town of Pembroke Corfu Wastewater Treatment Facility.

Masse said the Town of Pembroke and the GCEDC (or Genesee Gateway Local Development Corp.) will split the cost 50/50 for the first phase of the project, which will require CPL to provide up to 20 sets of plans, specifications and contract documents to prospective bidders.

The second phase, which will be addressed at a later date, carries a $205,000 price tag for project management, construction administration, construction inspection and stormwater pollution prevention plan inspections.

-- Approved a contract with Leaton Signs for two 4-foot by 8-foot free standing signs as the Le Roy Food & Tech Park and one 4-foot by 8-foot freestanding sign at Apple Tree Acres in Bergen at a cost of $600 per sign.

-- Approved measures connected to the STAMP site in the Town of Alabama for additional surveys (Frandina Engineering & Land Surveying for $2,230), site assessments (CPL, $1,500), to remain the lead agency for an updated state environmental quality review and to dedicate the name of the main road as STAMP Drive (per a resolution passed by the Alabama Town Board).

-- Heard a report from President/CEO Steve Hyde, who expressed his disappointment in the State Legislature’s recent passing of a farm workers labor bill that is set to go to Gov. Andrew Cuomo’s desk for signing.

“It’s egregious; very damaging to our farmers,” Hyde said, mentioning that farm owners would have to pay overtime to workers after 60 hours in a week.

The bill also gives farm workers the right to one full day of rest per week, eligibility for unemployment insurance and workers compensation coverage, and the right to organize a union and to collectively bargain.

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Hyde, following the meeting, provided an update on Ellicott Station in the City of Batavia and called upon Cuomo to step in to kick-start the City’s first big Downtown Revitalization Initiative project.

“We need the governor’s help to make this come together,” said Hyde, noting that program requirements of several state agencies are keeping the Savarino Companies of Buffalo’s plan from moving forward. “This is an opportunity to transform blighted property at the gateway of our city – (an eyesore) that reinforces poverty.”

Plans for the $20 million renovation of the former Santy’s Tire and Soccio & Della Penna property on Ellicott Street were unveiled in March 2016, but City leaders are still waiting for a shovel to be put into the ground.

Savarino Companies is proposing a mixed-use development of residential, office and retail spaces, including a brewery, small beverage warehouse and hops processing facility; as well as an entertainment and event area with outside seating and a tie-in to the new Ellicott Trail pedestrian pathway.

Press release:

The Genesee County Economic Development Center (GCEDC) approved a revised PILOT -- Payment In Lieu Of Taxes -- for the Ellicott Station development project and incentives for the construction of a spec building at the Gateway II Corporate Park in the Town of Batavia.

The Ellicott Station project in the City of Batavia is a mixed-use brownfield redevelopment project including adaptive reuse and new construction of a blighted property in a key gateway to Downtown Batavia.

The GCEDC Board approved a $22.5 million PILOT for Savarino Companies, the developer of the project, to meet the financing needed for the project’s expanded scope and scale. Incentives are an estimated $3.25 million, including property tax abatements and sales and mortgage tax exemptions.

When fully developed, Ellicott Station will create 68 full-time equivalent jobs and will include the construction of 99,000 square feet of brewery, restaurant and beer garden, a five-story apartment building with 55 apartments and class-A office space.

The Board approved an $18,000 mortgage tax exemption for Gateway GS, LLC for the first of five planned 27,000-square-foot spec buildings the company is building at the Gateway II Corporate Park in the Town of Batavia.

The $2.6 million project, which is being managed by Gallina Development Corporation, has previously received approval for property and sales tax exemptions.

Press release:

The Genesee County Economic Development Center (GCEDC) will consider approving incentives for two projects at the agency’s Nov. 1st board meeting.

The Ellicott Station Project in the City of Batavia is a mixed-use brownfield redevelopment project including adaptive re-use and new construction of a blighted property in a key gateway to downtown Batavia.

Savarino Companies, the project’s developer, has requested a PILOT agreement for the $22.5 million project be expanded to meet the financing needed for the project’s expanded scope and scale. A revised incentives package is valued at an estimated $3.25 million, including a property tax abatements and sales and mortgage tax exemptions.

The Ellicott Station project is anticipated to create 68 full-time equivalent jobs, the construction of a 99,000-square-foot brewery, including a restaurant and beer garden, and the construction of a five-story apartment building with 55 apartments and class-A office space.

Gateway GS LLC is seeking an $18,000 mortgage tax exemption for the first of five planned 27,000-square-foot spec buildings to be constructed at the Gateway II Corporate Park in the town of Batavia.

The $2.6 million project, which is being done by Gallina Development Corporation, has previously received approval for property and sales tax abatements.

State officials are looking for a more robust commitment from the community before signing off on a low-interest loan to help finance the Ellicott Station project in Batavia; developer Sam Savarino told members of the GCEDC board at their Thursday meeting.

As a result, the GCEDC board will consider an expanded PILOT for the project to match the 30-year loan from Homes and Community Renewal and also take into account the increased cost of the project, from $17.6 million to $21.75 million, as well as the expanded size from 73,100 square feet to 99,111 square feet, and the increase in apartment units from 51 to 55.

The loan is the last piece of the financing puzzle for the project, which has already been delayed by a year because of the complex financing, that includes a $3.5 million investment from Savarino, tax incentives by GCEDC of at least $1.5 million, state grants, and more than $10 million in private investment through a program called the New Market Tax Credits, which allows investors to purchase federal tax credits to help finance projects in distressed urban areas.

As the cost of the project has gone up, so has the cost of financing and transaction costs, which could top $2.5 million.

This is the first project to combine New Market Tax Credits and HCR financing, according to Savarino Companies CFO Milissa Acquard.

The incentives already approved include $897,293 in sales tax savings, $128,232 mortgage tax savings and GCEDC will consider increasing the and $537,398 in property tax savings for the project.

Half of the PILOT payments will be returned to the developer through the “Batavia Pathway to Prosperity” (BP2) program with half going to the relevant taxing jurisdictions (typically, half of the PILOT in a BP2 project area goes into a pool to provide future assistance to to other projects).

Savarino said he thinks their proposal with HCR has gotten past a concern about the planned rental rates for the apartments.

HCR wants to ensure the apartments will be occupied and setting rents plus utilities at 90 percent of the city's median income seemed high to HCR officials, even though that formula is typically acceptable under HCR regulations. Officials asked Savarino to consider setting rents based on 80 or 85 percent of the median income.

Changing the rental rate creates a domino effect for the rest of the financial package, Savarino said, that makes the project much harder to pull off.

Savarino and Acquard said they both think they've reached an agreement with HRC on rents and the financing package but that includes an expanded PILOT approved by the GCEDC board.

"One of the issues that have kept coming up, in some cases with the New Market investors, but also with HCR, is the local buy-in," Savarino said. "It's been deemed not to have enough investment from the community for the benefit the community is getting. We've effectively checked that box by discussing a possible change to the PILOT."

A public hearing will be scheduled on a revised PILOT once the details are worked out.

Yes, the Ellicott Station project is proceeding slowly, but it is proceeding.

Last night, Savarino Companies sought County Planning backing for a special use and site plan review, two formalities before they can start construction on the mixed-use complex that will include a brewery, apartments and office space.

"This might be one of the more complicated projects I ever work on in my lifetime because New Market Tax Credits are involved and the New Markets just haven’t really been paired with HCR money before," said Courtney Cox, development associate with Savarino. "We might be like the second case ever, so the legal teams are just trying to figure out how they want to make this work."

The New Market Tax credit is a mechanism that enables Savarino to secure private financial support for a bulk of the project's $17.6 million price tag. The New Market Tax Credit program, was created about two decades ago, in part to replace grants that financed many failed urban renewal programs. Tax credits on the project can be sold as assets to help create a market-driven way to encourage development in economically distressed neighborhoods. 

HCR is Homes and Community Renewal, a state agency that provides funding for housing in financially depressed neighborhoods.

These two financial programs are not commonly brought together and they have different criteria that developers must meet. HCR has a 30-year compliance period and New Markets has a seven-year period with a requirement to refinance after seven years, as one example of the complications that need to be worked out.

Still, Cox still estimates financing will close in this month or nextl, thereby allowing contractors to get a shovel in the ground before the first freeze. If crews can get the site cleared and foundations built before winter, then workers can put up steel and start working on walls.

The entire construction cycle, however, is estimated to be 24 months.

Despite these delays, the anchor tenant, Resurgence Brewing in Buffalo is patient, Cox said.

"They understand," he said. "We renegotiated some of the terms of the lease pretty easily between the two parties, so they're are hanging in there."

One of the biggest changes in the site plan is the apartment complex, which will now include 55 apartment units instead of 51.

That's a change needed to comply with HCR requirements.

"These programs all have design guidelines," Cox said. "There is a limit on how large one-bedroom, two-bedroom, three-bedroom units can be. In the original plan, the one-bedroom units were larger than what they allow, so we had to downsize."

The one-bedroom apartments will be about 785 square feet.

"They’re not tiny units by any means," Cox said. "I think it's just being efficient with space that public money is being invested into."

Even though no ground has been broken yet, Rachel Tabelski, director of the Batavia Development Corp., said Ellicott Station remains one of the state's ground-breaking projects.

"This is the first brownfield opportunity area -- they have these all over the state -- but this is the first one that is actually close to putting a shovel in the ground," Tabelski said. "So across the state, we are the poster child for having a developer come in and commit to this site and prove that the brownfield opportunity area works."

The success in getting the project this far has put Batavia on the map with investors looking to finance similar projects.

"This project is a catalyst," Tabelski said. "Everybody wants to know what’s going on. They’re calling us out of Manhattan now asking are there deals here they can play. That’s a huge testament to how big this is."

Plans announced this week by Resurgence Brewing to convert an old industrial building in the First Ward of Buffalo into a new brewery, beer garden, and the restaurant doesn't change any plans for the Ellicott Station project in Batavia, said developer Sam Savarino.

Savarino said the Buffalo projects and the Batavia projects are very different and Resurgence has continued to move ahead with plans to occupy space in Ellicott Station for a restaurant and brewery that will specialize in sour beer.

Financing for construction should close at the end of March, Savarino said, with the first shovel in the ground within 30 to 60 days. The Resurgence space in the mixed-use complex, which includes apartments and offices, should be completed by the end of the year, if not the first quarter of 2019. It will be up to Resurgence, Savarino said, when they want to move in and get started with their preparation work to open the business.

He said he didn't have any specifics from them on their plans at this point. Attempts to reach Jeff Ware, one of the co-owners of Resurgence, were unsuccessful this morning.

Julie Pacatte, economic development coordinator for the BDC, is traveling but did send a text message saying that Resurgence's expansion in Buffalo has not changed the company's plans for Batavia.

Development of Ellicott Station is being mostly funded by private investors but includes financing through tax incentives and grants because of the environmental remediation necessary at the site. It will be a 64,000-square-foot complex with 51 market-rate apartments in a five-story building next to the restaurant.

The new complex in the First Ward of Buffalo will provide Resurgence with 25,000 square feet of space. They will share the building with a microdistiller and a rock-climbing gym.

"It's right around the corner from where I live and our office," Savarino said, "so I'm happy."

Yesterday afternoon, consultants and an investigator from the Department of Environmental Conservation were at the former Santy Tire property, an anticipated part of the Ellicott Station project, digging test pits to further define the severity and scope of environmental contamination on the property.

There is a pending application for the property for a brownfield tax credit -- one has already been granted for the Della Penna property -- for the parcel. The DEC asked for more evidence of environmental contamination.

Financing for developer Savarino Companies on the Ellicott Station project should close by mid-to-late March, according to Economic Development Coordinator Julie Pacatte.

Pacatte reported progress on the project to the Batavia Development Corporation board of directors this morning. 

The complicated financing deal to pay for the $18 million development, which includes a restaurant/brewery, apartments, and office space, includes some of Savarino's own money (about $3.5 million), grants, tax credits, and private investment (about $10 million) through a program called a New Market Tax Credit.

Empire State Development has promised $1.9 million for the project and has agreed to release the funding in stages to help pay for the project as it proceeds. ESD will get back 1 percent of the grant money as a "commitment fee."

That grant is administered by the BDC.

There is also a $500,000 grant from the state administered by the City as part of the Restore NY program.

The project will also receive tax abatement through Genesee County Economic Development Center.

There is also one brownfield tax credit already granted through the state because of the environmental cleanup needed at the former Della Penna property.

There is an application pending for the former Santy Tires property.  

Pacatte said the DEC requested more information on the possible environmental contamination on the property, indicating not enough evidence has been presented yet that the property has enough contamination to warrant the tax credit.

None of the environmental tests on the property done so far were taken inside the old repair bays.

"It was a repair shop for 50 years, so there really is no worry that it's dirty," Pacatte said. "The DEC just asked for more documentation."

Last month, Savarino acquired Ellicott Station LLC, the corporation set up by the BDC to take title to the two parcels on Ellicott Street, and when the financing closes, will pay the remaining $55,000 of the $60,000 purchase price to the BDC.

A deal to sell property on Ellicott Street to Savarino Companies for development of Ellicott Station, which includes a restaurant, office space, and apartments, was finalized in Buffalo today.

Pier Cipollone, president of the Batavia Development Corporation, and Julie Pacatte, economic development coordinator for the BDC, were authorized earlier this week by the BDC board to finalize the property transfer.

Technically, the BDC sold Ellicott Station LLC to Ellicott Station Development LLC/Savarino Companies. Ellicott Station LLC, not the BDC or the City, was the owner of the real estate.  

The sale needed to close by Jan. 31 because of changes in the tax law would have meant loss of a $200,000 tax credit for the new owners.

Savarino is still working with 16 different entities to finalize financing for the development and has some environmental investigations yet to complete. Officials expect financing to close by mid-February.

The Buffalo-based firm is making a direct investment of about $3.5 million and will borrow approximately another $10 million or more, and local, state, and federal programs will cover another $5 million or so of the more than $18 million in project expenses.

Some of the financing is coming through the New Market Tax Credit program, which is one factor in why the financing is complicated (see prior story).

Resurgence Brewery will be the anchor tenant for the development and BDC officials expect a 2018 opening for the new restaurant.

The approximate 64,000-square-foot development will include office space and a five-story apartment complex with 51 units.

The location is the former buildings of Santy's Tire Sales and Soccio & Della Penna Construction.

A delay in securing financing through the New Market Tax Credit program for developer Savarino Companies has held up the state of the Ellicott Station project, which is the $18 million redevelopment of the former Della Penna property on Ellicott Street in Batavia.

Julie Pacatte, economic development coordinator for the Batavia Development Corp., said today that Savarino expects to close financing on the project in November.

The original target date was August. (For an explanation of financing for the project, click here.)

This week, survey crews are on site so preliminary engineering work can begin. The surveys will help with floodplain-related design work.

Once financing is done, environmental remediation work can begin. 

"Hopefully, we'll get some favorable days and favorable weather during the winter," Pacatte said. "There's also some work to do inside on Resurgence Brewery. By spring, we should be in full construction mode."

There will also be a workforce recruitment project beginning in the fall, in cooperation with PUSH Buffalo and the Genesee County Work Center aimed at finding jobs for hard-to-place workers.

Savarino, Pacatte​ said, is also inviting local contractors to bid on subcontracts. Bid specs will be available on the Savarino website once the purchase of the property is completed.

Press release:

Governor Andrew M. Cuomo today announced more than $1 million has been awarded to three municipalities in the Finger Lakes to help local businesses expand and create 67 jobs in the area.

The award comes from the federally funded Community Development Block Grants program, which provides financial assistance to eligible counties, cities, towns and villages to help develop viable communities by providing decent affordable housing and attracting, retaining, and spurring job creation.

Today's announcement complements Finger Lakes Forward -- the successful initiative that is driving economic growth in the region.

"With this funding, we are investing in New Yorkers while fostering partnerships with local businesses across the region," Governor Cuomo. "The Finger Lakes has seen economic growth and resurgence in recent years and by investing in these businesses, we remove barriers and offer them the support they need to succeed in this state."

The Town of Batavia was awarded $465,000 to assist Freightliner & Western Star, Genesee County was awarded $225,000 to assist in the expansion of Resurgence Brewery in the City of Batavia, and the Town of Lima was awarded $315,000 to help Bristol ID Technologies expand its production facility.

Funds will be used to purchase machinery and equipment. Awards announced today include:

$465,000 to the Town of Batavia in Genesee County to assist Freightliner & Western Star of Batavia in constructing a 45,000-square-foot truck service and education facility

·         This expansion will create 31 full-time jobs over two years, with 18 to benefit low - moderate income persons. Freightliner & Western Star is an affiliate of Fleet Maintenance Inc. of West Seneca and a certified Women's Business Enterprise. The facility will consist of service bays, a warehouse, and a classroom and service bay to accommodate up to 20 students as part of the BOCES vocational diesel technician training program. The service operation will serve local businesses as well as truckers using the New York State Thruway, which is adjacent to the project site. The project will link Genesee Valley BOCES with hands-on technical training to students in a workplace environment, and inject more than $8.1 million into the local economy.

$225,000 to Genesee County to assist Resurgence Brewery in expanding their facilities and creating the Resurgence Powerhouse and Beer Garden

·         This funding will help create 15 full-time jobs over two years, with 13 to benefit low - moderate income persons. Resurgence Brewery, located in the City of Batavia is a wild beer fermentation and production brewery for specialty or craft beers. The expansion is part of downtown Batavia's Ellicott Station development project, and furthers Governor Cuomo's Craft Brew initiative, designed to increase tourism and economic development. The proposed project will inject $790,000 into the economy. Empire State Development also provided $145,000 for the project.

$315,000 to the Town of Lima to assist in the expansion of Bristol ID Technologies

·         Bristol is a leading card manufacturer known for innovative advances in card technology within many markets including ID/Security, Gift/Loyalty, Promotional & Print, and Hospitality. The project will involve the acquisition of the company's current facility, construction of an 8,000-square-foot building expansion, and the acquisition of high volume machinery and equipment that will allow for improved efficiency and a substantial increase in capacity and output. The project will create 21 full-time jobs over two years, with 17 to benefit low - moderate income persons, and inject more than $5.3 million into the local economy.

Empire State Development President, CEO & Commissioner Howard Zemsky said, "Craft beverage production in New York is thriving under Governor Cuomo, who has worked hard to cultivate and promote the industry. The expansion of Resurgence Brewery will generate economic activity and support the growing momentum of the Finger Lakes region."

RuthAnne Visnauskas, commissioner of New York State Homes and Community Renewal said, "The awards announced today are yet another example of the Community Development Block Grant program at work creating jobs and stimulating local economies. The program is an invaluable tool in the economic development tool box and will allow businesses to purchase the machinery and equipment they need to grow and meet demands. HCR is proud to be part of the Governor's investments and commitment to move the Finger Lakes forward."

Assemblymember Stephen Hawley said, "I am very pleased with the distribution of two Community Development Block Grant awards to businesses within my district. Supporting local economic growth and encouraging a broad range of jobs is of central importance to any community. By helping these local businesses expand their markets and create economic confidence, we can encourage job growth and more opportunities for citizens of Western New York to chase dreams of owning their own business."

Raymond Cianfrini, chair of the Genesee County Legislature, said, "Resurgence Brewery will be a welcome addition to Batavia and will add to the continued boom we are seeing in this area. Governor Cuomo has made the renaissance of the Finger Lakes and the growth of the craft beverage industry important priorities and we are happy to be part of the excitement."

Gregory Post, supervisor of the Town of Batavia, said, "This is an exciting opportunity for the Town of Batavia and the entire county. Freightliner & Western Star's expansion will provide jobs for area families, valuable education, and training for students, and help grow our local economy. I'm very happy to see the progress we're making in Batavia and throughout the region thanks to Governor Cuomo's commitment to strategic economic development investments that move the Finger Lakes forward."

Jeff Ware, owner of Resurgence Brewing Company, said, "The state's award to Genesee County will go a long way towards the upfront costs of opening our doors and helping to bring Batavia back to life. We are seeing this entire region grow thanks to the Governor's commitment to the Finger Lakes economy, and we are proud to be part of this area's exciting future."

Deborah Gawron, president of Freightliner & Western Star, said, "We are thrilled to be expanding Freightliner & Western Star into the Finger Lakes and adding to the economic growth that is taking place throughout the region. It's wonderful to have the support of Governor Cuomo and New York State and to be part of the effort to move the Finger Lakes forward. We look forward to offering good jobs and future opportunities to local residents, as well as top-notch truck service to area businesses."

Press release:

The Genesee County Economic Development Center (GCEDC) approved incentives for the $17.6 million Ellicott Station project by Savarino Companies in the City of Batavia at the agency’s Aug. 3 board meeting. The GCEDC Board also accepted an application for assistance from Gateway GS LLC, which is proposing to invest $2.625 million for a phase one development of a 25,000-square-foot spec structure in the Gateway II Corporate Park.

The $17.6 million development by Savarino is anticipated to create approximately 60 new jobs. It was recently announced that the first tenant for the site will be the Resurgence Brewing Company. This project would contribute to the Batavia Pathway to Prosperity (BP2) redevelopment fund and be eligible to draw funds out of the fund to support the project investment related to infrastructure and related improvements in and around the site which offers a “public benefit.”

As a part of the project, the Batavia Development Corporation (BDC) will submit a “certificate of consistency” and infrastructure development plan, which is a requirement to enable funding to flow from the BP2 redevelopment fund.

Savarino is receiving approximately $1.5 million in sales and mortgage tax and property tax exemptions. For every dollar of public benefit, the company is investing $21 into the local economy.​

A Rochester area developer has created an LLC and is planning to invest $2.625 million to build a 25,000-square-foot “shell” spec building at Gateway II in the Town of Batavia. The building allows potential customers the flexibility in final design while reducing construction lead time. The master plan will build out in four or five phases of 27,000-square-foot facilities, each on 10 acres.

The GCEDC receives several RFPs annually from companies looking for “ready to go” warehouse, distribution, light manufacturing, technology and office space tenants. This has been a market opportunity that the agency has been unable to pursue in the past.

The company is seeking sales and property tax exemptions of approximately $140,000. Since the incentives being sought are more than $100,000 a public hearing will be held at a date and time to be determined.

“We are anxious to see work get started at Ellicott Station as this is a major investment in the City of Batavia under the B2P program,” said GCEDC Board Chair Paul Battaglia. “The spec building being proposed at Gateway aligns with our success in taking the ‘build it and they will come approach’ at our various business parks which has proven to be a successful business model.”

Update:

A planned public hearing at Tuesday night's City Planning & Development Committee meeting was postponed until next month to give Ellicott Station offiicals more time to deal with State Environmental Quality Review and other issues, said Duane Preston, chair of the planning board.

"We did a sketch plan review and overall it seems to be a great project," Preston said.

He said questions from the board focused on the height of the five-story apartment building -- "it will result in a bit of an up-and-down skyline," Preston said -- as well as the amount of parking and the size of a glass front facade.

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No one from the public spoke at a public hearing on Tuesday afternoon at City Hall where $1.5 million in mortgage, sales and property tax abatements for the Ellicott Station project were presented.

The hearing was officiated by Chris Suozzi, Genesee County Economic Development Center vice president of business development. The completion of the public hearing now sets the stage for the GCEDC Board of Directors to approve the tax incentives as outlined in a press release below.

Samuel Savarino, president of Savarino Companies and developer of Ellicott Station, attended the public hearing, along with Julie Pacatte, Pier Cipollone and Mary Valle of the Batavia Development Corporation.

Savarino noted that he would be at the meeting of the Batavia Planning & Development Committee tonight, along with the project's architect and site engineer.

The Buffalo businessman said he has encountered numerous "challenges" with the project, but the biggest one -- getting proper financial aid -- already has been overcome.

"We have surmounted the major hurdle, closing the $5 million gap with help from Empire State Development and new market tax credits to make this happen," he said. "Overarching development costs make it difficult to make the economics work (without state assistance)."

Savarino also pointed out that the site of the former Santy's Tire Sales and Soccio & Della Penna Construction companies also presents flood hazards, is part of the Brownfield Opportunity Area (which warrants remedial work) and sits on top of what is being called a "grand canal" or tunnel that runs from the corner of Ellicott and Jackson streets right through the Ellicott Station property.

A portion of the canal, which is being utilized by the city, is located directly under where one of Savarino's apartment/retail buildings would be constructed.

On a positive note, he said he has encoutered similar problems in his many years as a developer and is optimistic that engineers will be able to work around this water-filled obstacle.

Savarino added that he has lined up investors and lenders, and hopes to start demolition and construction by this fall, with an eye on being "open for business" in the fall of 2018.

The mixed-use development will consist of a retail brewery/restaurant operated by Resurgence Brewing along with 16,800 square feet of office space and a five-story apartment building.

Savarino said rent for a one-bedroom, top floor corner unit will be around $1,200 per month while a two-bedroom unit with two full bathrooms will go for around $1,600 per month. Each apartment will feature a washer and dryer and a balcony, and the 51-unit building will include a fitness center and ground floor parking.

Pacatte said the BDC is looking at Ellicott Station as its "beacon of hope" for the city's bid to receive a $10 million Downtown Revitalization Initiative award (see story below).

"We're using Ellicott Station as the anchor for our DRI proposal, focusing on the quality of life piece -- especially on the south side of the city," she said.

Valle, owner of Valle Jewelers on Jackson Street, said that major improvements on Ellicott Street "will raise the bar for all of us" in regards to building upkeep and maintenance.

Press release:

The Genesee County Economic Development Center will hold a public hearing at 4 this afternoon to consider financial incentives for the Savarino Companies for the redevelopment of Ellicott Station in downtown Batavia. The public hearing will take place at City Hall.

The approximate 64,000-square-foot development will be a mix use of residential, office and retail spaces; a brewery; small beverage warehouse and hops processing facility; entertainment and event area; outside seating; and integration of the new Ellicott Trail pedestrian pathway.

The $17.6 million project is estimated to create up to 60 good paying full-time jobs.

The proposed incentives include $897,293 in sales tax savings, $128,232 mortgage tax savings and $537,398 in property tax savings. 

The project is being done through the “Batavia Pathway to Prosperity” (BP2) program which was created through an inter-municipal agreement between the City of Batavia, Genesee County, the Batavia City School District, the Batavia Development Corporation and the GCEDC.

BP2 was conceived to pool resources in order to invest in distressed areas in the City of Batavia. The BP2 program will be implemented though PILOT increment financing (PIF), referred to as the “BP2 fund,” which is the first of its kind in New York State where all local taxing jurisdictions are participating. 

Supported by the redirection of 50% of new project PILOT payments, the BP2 fund will play a critical role in generating development within the Batavia Brownfield Opportunity Area (BOA), a 366-acre area within the City of Batavia containing five strategic redevelopment sites.

Press release:

The Genesee County Economic Development Center will hold a public hearing at 4 this afternoon to consider financial incentives for the Savarino Companies for the redevelopment of Ellicott Station in downtown Batavia. The public hearing will take place at City Hall.

The approximate 64,000-square foot development will be a mix use of residential, office and retail spaces; a brewery; small beverage warehouse and hops processing facility; entertainment and event area; outside seating; and integration of the new Ellicott Trail pedestrian pathway.

The $17.6 million project is estimated to create up to 60 good paying full-time jobs.

The proposed incentives include $897,293 in sales tax savings, $128,232 mortgage tax savings and $537,398 in property tax savings. 

The project is being done through the “Batavia Pathway to Prosperity” (BP2) program which was created through an inter-municipal agreement between the City of Batavia, Genesee County, the Batavia City School District, the Batavia Development Corporation and the GCEDC.

BP2 was conceived to pool resources in order to invest in distressed areas in the City of Batavia. The BP2 program will be implemented though PILOT increment financing (PIF), referred to as the “BP2 fund,” which is the first of its kind in New York State where all local taxing jurisdictions are participating. 

Supported by the redirection of 50% of new project PILOT payments, the BP2 fund will play a critical role in generating development within the Batavia Brownfield Opportunity Area (BOA), a 366-acre area within the City of Batavia containing five strategic redevelopment sites. 

The financing of the Ellicott Station project by Buffalo-Based Savarino Companies is complicated, but it's moving along at a swift pace and CEO Sam Savarino doesn't expect any delays in financing that would prevent construction from the starting this summer.

Savarino Companies will have a direct investment of about $3.5 million and will borrow approximately another $10 million or more and local, state, and federal programs will cover another $5 million or so of the more than $18 million in project expenses (a bit of an increase over prior project estimates).

Assistance programs to make the project viable come in three forms: tax abatements from the Genesee County Economic Development Center, grants from the State of New York, and a federal New Market Tax Credit program.

"We knew going in we had a hole in this budget of about $5 million," Savarino said. "The state came in, Empire State Development, and filled part of the hole with the grants that they have, but it's still left us out there and that's why we went out we said we need enough allocation to fill that hole."

That hole is being filled by the New Market Tax Credit program, created about two decades ago in part to replace grants that financed many failed urban renewal programs. Tax credits on the project that can be sold as assets help create a market-driven way to encourage development in economically distressed neighborhoods. It's a way for the market to help decide which projects are worthy of assistance rather than the federal government making the decision.

The tax credits are administered by Community Development Entities (these can be for-profit companies or nonprofit agencies). The CDEs decide which projects to back. The tax credits are then sold to investors, who can use the tax credits or sell them on the open market.

"An area like this particular area is a distressed area," Savarino said. "It's got way more unemployment than other areas in the county. It's got way more incidents of poverty of people living there, more than any other part of the county. It's also a brownfield site. So it's got all those things going against it. That's just the type of site -- and by the way that has prevented its redevelopment --  it makes it too expensive to really redevelop. It's not really marketable. That's exactly the type of project that the New Market Tax Credit program is meant to address. But there are federal tax credits and they're meant to bring life into sites and generally in cities that don't have that much of a chance."

Julie Pacatte, economic development coordinator for the Batavia Development Corp., said Ellicott Station is unique in the county because the total investment exceeds $5 million to $10 million, which is necessary to even attract New Market Tax Credits.

"That's what makes it difficult for rural communities to access the program because projects generally don't project to that kind of scale to access the program," Pacatte said.

Savarino said the Ellicott Station project will use about $7.5 million in tax credits, which will translate into about $2.5 million in direct investment into the project.

Without the assistance programs, traditional lenders wouldn't even consider a project with the liabilities of the former Della Penna property, which needs extensive environmental remediation and is in a neighborhood with higher than average unemployment and lower than average incomes.

"There's no way it would even be financeable," Savarino said. "It's not just a developer like ourselves coming in and so everybody can gainsay your efforts over there because of you and you are out there trying to -- you're not going to do this to lose money. We're judged more harshly by the people who come and provide the financing for something like this.

"So we take a risk for going out and risking that we're going to lease up these units. We're risking that will lease up the commercial space. We're taking the risk that we've got a cap on the cost, and we have all the normal risk that you have (in a development)."

Some of the risk is mitigated by the fact that Savarino has already secured an anchor tenant for the project, Resurgence Brewery, out of Buffalo, which will open a restaurant, beer garden and sour beer brewery at the location. That business is expected to create at least 15 full-time jobs.

Savarino said the Resurgence owners are eager to get going and would move in today if they could.

The complicated financing isn't anything new for Savarino Companies, which has been involved in redeveloping several properties in Buffalo that were also highly distressed and needed to make variety a variety of financing and investment options to make them viable. 

The New Market Tax Credit is limited to the commercial side of the project. For that, Savarino must secure the tax credits, attract the investors, find additional financing, get the proper approvals from local and state officials, and then the company must still also secure financing for the apartment complex.

Over the course of planning, the apartment complex has gone from 30 units to 42, to 47, and now the plans call for 54 units.

"When we started laying it out and we actually got the building down, we got to our unit mix and it turned out that we could fit 54 units in there," Savarino said.

That's one reason the costs have gone up a bit, but a recent environmental examination of the property also uncovered a surprise -- a previously unknown storm water drainage canal running under the entire length property.

The canal -- they're calling it the "Grand Canal" -- shows up on no maps, no site drawings, no infrastructure maps. It was built of brick long, long ago and forgotten about.

There's also evidence of contamination in the canal.

The best-case scenario is the canal can be declared as abandoned and filled in (as a matter of engineering, the buildings can't just be built on top of it), but if it needs to be rerouted, it can either be mitigated by connecting it to existing drainage lines under Ellicott Street or put under the easement for the new Ellicott Trail, which will run behind Ellicott Station. Savarino isn't expecting the canal to blow up the budget.

"Some of that is just the nature of the brownfield redevelopment and the remediation program of the state's is intended to offset those costs," Savarino said. "So to the extent that you find something that's a little worse than what you knew about, your site-prep costs will go up, and hopefully it works out such that you get the tax credits to offset that cost."

Savarino and Pacatte were at the Genesee County Planning Board meeting last night as part of the process of getting land-use approvals for the project.

The planning committee recommended approval of the site plan.

The project moves forward next with a GCEDC public hearing June 20 on the $1.5 million tax incentive package, which includes breaks on sales and mortgage tax, and a payment in lieu of taxes plan on the new tax liabilities generated by the increase in assessed value of the property. That same day, the city's Planning Committee will review the site plan and on June 22, the Zoning Board will review the plan.

This morning, the County Legislature held a special meeting to approve a $225,000 grant to assist construction of the brewery and restaurant for Resurgence Brewery. The grant is a pass-through of federal Community Development Block Grant money administered by the state's Office of Community Renewal. The special meeting was necessary because today was the deadline for completing the application.

Savarino said he doesn't anticipate any delays in financing, that financing should close in July and construction will begin in August.

Press release:

The Genesee County Economic Development Center (GCEDC) accepted an application for assistance from the Savarino Companies for the redevelopment of Ellicott Station in Downtown Batavia at the agency’s June 1 board meeting.

The approximate 64,000-square-foot development will be a mix use of residential, office and retail spaces; a brewery; small beverage warehouse and hops processing facility; entertainment and event area; outside seating; and integration of the new Ellicott Trail pedestrian pathway.

The $17.6 million project is estimated to create up to 60 good-paying full-time jobs. For every dollar of public sector investment there is an anticipated private sector investment of approximately $25.

The project is being done through the “Batavia Pathway to Prosperity” (BP2) program which was created through an inter-municipal agreement between the City of Batavia, Genesee County, the Batavia City School District, the Batavia Development Corporation and the GCEDC. 

BP2 was conceived to pool resources in order to invest in distressed areas in the City of Batavia. The BP2 program will be implemented though PILOT increment financing (PIF), referred to as the “BP2 fund,” which is the first of its kind in New York State where all local taxing jurisdictions are participating.

Supported by the redirection of 50% of new project PILOT payments, the BP2 fund will play a critical role in generating development within the Batavia Brownfield Opportunity Area (BOA), a 366-acre area within the City of Batavia containing five strategic redevelopment sites.  

”The collaboration among various government jurisdictions is simply smart economic development,” said Paul Battaglia, GCEDC Board chairman. “The BP2 program is an opportunity to attract development and jobs to the urban core of Genesee County and just as important, create vibrant neighborhoods in economically disadvantaged areas of the city.”

As anticipated, Buffalo-based Savarino Companies has applied for financial assistance from the Genesee County Economic Development Center to help offset the costs of environmental cleanup and redevelopment of the long-vacant Della Penna property on Ellicott Street in the City of Batavia.

The GCEDC board will consider the application for the $17.6 million rehabilitation project at its meeting tomorrow.

Savarino is planning to replace most of the structures on the property and replace them with a 64,000-square-foot development that will include apartments, office space and a brewery and restaurant.

Once completed, there will be 47 market-rate apartments on the border of Downtown Batavia and businesses employing at least 60 full-time workers.

The terms of the application were negotiated by the city and GCEDC during the process of attracting a developer for the brownfield project and include $897,293 in sales tax abatement on materials during construction, relief on $128,232 in mortgage taxes and $537,398 in property taxes.

Savarino has already announced an anchor tenant for the Ellicott Station project, Resurgence Brewing Company of Buffalo, which plans to use the facility to increase production of a new product, a sour beer, as well as serve on tap its full line of beers that have proven popular in Buffalo.

The project is part of the Batavia Pathway to Prosperity (BP2) initiative, which is a cooperative endeavor between the city, GCEDC, Batavia Development Corp., City Schools and Genesee County.

BP2 was created to offer a tax abatement known as a PIF (PILOT (payment in lieu of taxes incremental financing), which is the first of its kind in New York. Half of the PIF payments will be used to help fund future brownfield redevelopment in Batavia, with the other half being returned to the original taxing jurisdictions.

The Batavia Opportunity Area (the brownfield redevelopment area) covers 366 acres in the city's core and contains five strategic redevelopment sites.

The first work toward revitalizing the Della Penna buildings into Ellicott Station -- apartments, office space, a restaurant, and brewery -- began today with a contractor digging test pits and checking soil samples.

The tests are the first step in any contamination remediation process. The tests will provide officials with information on the scope of any remediation that is needed.

The old industrial parcel on Ellicott Street will undergo a $17 million transformation that will eventually bring in Buffalo's Resurgence Brewing Company as the anchor tenant.

For previous coverage, click here.