By David Robinson
Erie County Executive Mark Poloncarz took issue Monday with the Erie County Industrial Development Agency providing expanded tax breaks for a $5.4 million project to convert the former Corn Exchange building on South Elmwood Avenue into offices and apartments.
Poloncarz, in his first meeting as a member of the IDA board, cast the lone vote against providing more than $130,000 in additional tax breaks to the project. While the additional tax breaks were approved, Poloncarz said he objected mainly because he doesn’t think the agency should be providing incentives to high-end housing projects.
“This is a project that’s going to benefit the owners of the building,” said Poloncarz, who has an automatic seat on the IDA board as county executive. “There’s really no [job] retention here. There’s really no job benefit. This is just providing a benefit for a project that would have been done anyway.”
The project’s developers, local logistics executive Anthony Baynes and Kent Frey, are about three-quarters through their work to turn the long-vacant building at 100 S. Elmwood Ave. into 10,000 square feet of commercial space on the ground floor and 26 loft-style apartments on the upper three stories.
The developers initially received $135,000 in sales and mortgage tax breaks through the IDA in November 2010, based on their original estimate that the project would cost about $3 million to complete.
But the project has turned out to be much more costly than those original estimates, with the developers now saying they expect to spend almost $5.5 million to complete the renovation work. Because of those added costs, the developers returned to the IDA to seek additional sales and mortgage tax incentives, which are an estimate that is based on the total value of a project.
“It’s not uncommon in rehabs of this type,” said Karen Fiala, the IDA’s assistant treasurer. “The building was in worse shape than previously thought.”
The building, originally built in 1916, housed the Buffalo Corn Exchange for nearly 30 years but has been vacant for more than 15 years. It was owned by a group of investors from Rochester but was threatened with being boarded up until Baynes and his partner stepped in to buy it in March 2010.
The agency originally agreed to provide incentives for the project under its adaptive reuse policy, which encourages developers to renovate old, empty buildings, even for such uses as housing that normally are not eligible for the agency’s tax breaks.
Poloncarz said he believes the IDA should evaluate housing projects on a case-by-case basis. He noted that low-income housing projects often need tax breaks to be economically viable. But he questioned the need for incentives for housing projects aimed at higher-income residents.
“I really don’t think this is the type of project we should be getting into,” he said. “It’s high-end residential.”