Economic development officials in Niagara County have approved nearly $500,000 in tax breaks for a Buffalo developer seeking a total of $2.6 million in public subsidies to open a small event center and a brewery and restaurant in a “highly distressed” area of Niagara Falls.
The Niagara County Industrial Development Agency’s board of directors voted Wednesday to authorize $457,000 in property, sales and mortgage tax abatements to support T.M. Montante’s $3.3 million redevelopment plans on Third Street in the Falls.
The company has committed to creating 14 full-time jobs, mostly for bartenders, waitresses and cooks. With incentives totaling $2.6 million, the projects would come at a public cost per job of $189,785.
The deal has been criticized in some quarters, with state Sen. Sean Ryan calling it “bad economic development.”
The awarding of tax breaks follows last year’s decision by the state-run USA Niagara Development Corp. to give Montante both buildings along with two nearby vacant lots on Third Street valued at $965,000. The parcels were acquired as part of a larger package of land purchased by the state under a $15 million agreement with their former owner, Lewiston businessman Joe “Smokin’ Joe” Anderson.
In one of the buildings located at 500 Third Street, Montante plans to create 6,800 square feet of conference and event space on the first floor and 4,300 square feet of office space on the second floor. At an adjacent building located at 512 Third Street, the company plans to open a brewery and restaurant.
In addition to the IDA tax breaks and the buildings themselves, Montante plans to seek additional public support for both projects, including $788,000 in state and federal tax credits and $456,000 in grants from the Cataract Tourism Fund, a state-sponsored tourism development program administered by the Niagara County IDA.
Before Wednesday’s tax break vote, IDA board member Kevin McCabe credited Montante for taking a “big risk” by investing in an area of the Falls that continues to be challenged by crime, blight and other problems. He noted that under the terms of its 10-year payment-in-lieu-of-taxes agreements with the county, Montante will still make tax payments, albeit at reduced rates.
“I think it’s an excellent project for the neighborhood and for the taxpayers,” he said.
State law frowns upon local IDAs offering tax incentives to retail projects because wages are generally low for the types of jobs being created. One exception allows incentives for retail projects in “highly distressed” areas.
IDA officials say the Montante projects qualify because they are located in the 500 block of Third Street, where poverty and unemployment rates are well above state averages.
“We want industrial projects,” IDA attorney Mark Gabriele said. “We want commercial projects when those are there, but the state has determined that, in these distressed areas, that they will take any type of projects and any type of development, even if it’s the retail type.”
Gabriele said his agency has not yet received formal applications from Montante for grants through the Cataract Tourism Fund. He said the company has also not provided the agency with a timetable for completing either project.