June 18–Developer Mark D. Croce’s $18.1 million plan to turn the long-vacant Curtiss Building into a boutique hotel and restaurant won the backing of the Erie County Industrial Development Agency for a package of $685,000 in tax breaks.
While the IDA normally does not provide tax incentives for hotel and restaurant projects, the agency agreed to a package of sales and mortgage tax breaks for the Curtiss Building project, at the corner of Franklin and W. Huron streets in Buffalo, because it is located in an economically distressed part of the city and would breathe new life into a building that has been vacant for more than 12 years.
“This is different from your standard hotel because it is adaptive reuse,” said Erie County Executive Mark Poloncarz.
Croce’s plan calls for the 57,500-square-foot Curtiss Building at 204-216 Franklin St. to be converted into a 67-room boutique hotel that also will include a fine dining restaurant along with a fitness center and a spa. The project also will encompass the site of the former Continental Building, which already has been torn down.
Croce said he did not initially intend to seek tax breaks for the project, when it was first conceived several years ago. But the project was put on hold as Croce focused on the acquisition and rehabilitation of the Statler Towers. Since then the site lost benefits associated with the state’s former Empire Zone program, while construction bids came in “substantially higher” than initially anticipated, creating a financing shortfall.
Without the tax breaks, Croce said the project would be further delayed while he seeks additional financing.
Buffalo Mayor Byron Brown said the project merited the tax breaks because it will bring new development to “a highly visible location in downtown Buffalo that thousands of people walk by and drive by each day.”
“This was a very difficult project and a very complicated project,” Brown said.
Dottie Gallagher-Cohen, the president of the Buffalo Niagara Partnership, said the project, located within a block of the city’s convention center and near the Chippewa Street entertainment district, will be an asset in the region’s efforts to lure visitors interested in seeing the area’s museums, architecture and other cultural assets.
“This is very attractive to a cultural tourist,” she said. “It’s not duplicative. It’s not just another hotel.”
The IDA’s policy committee held an extensive discussion of the hotel project earlier this month, with some of the discussion centering around financial forecasts that showed that the tax breaks would have only a small impact on the return on Croce’s investment, which would rise to 11.9 percent with the incentives from 11.3 percent without. That prompted Richard Tobe, the deputy county executive who chairs the policy committee, to wonder if the project would proceed even without the tax breaks.
The committee, however, ultimately voted unanimously to support the project because of its location in a distressed area and its plans to reuse a building that has been vacant for more than a decade. “It fits within our guidelines and is an adaptive reuse project,” he said.
The hotel and restaurant, which is expected to employ 30 people, also is receiving $1.35 million in Restore NY funds, along with property tax breaks through a program administered by the City of Buffalo.
IDA officials estimated that the hotel would generate an average of about $140,000 a year in bed taxes over the next decade. They also said it would generate about $330,000 in new tax revenue for Erie County and $292,000 in additional funds for the City of Buffalo over the next 12 years.
email: drobinson@buffnews.com
