Ellicott Station keeps inching toward construction
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."