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March 26, 2019 - 11:15am

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A change in federal tax law in 2017 could help attract Downstate investors to Upstate communities such as Batavia and the Batavia Development Corporation is planning on pursuing those dollars for economic development in wards three and six.

The new tax law allows investors who have realized profits from prior investments, known as capital gains, to defer and reduce capital gains taxes on those profits if they invest those gains in economically distressed neighborhoods.

Wards three and six -- which contain the City Centre mall and the Harvester Center, among other distressed properties -- were previously designated Opportunity Zones by the City of Batavia and would be eligible to attract investment under the terms of the revised Federal Tax Code.

Rachael Tabelski, BDC director, asked the City Council on Monday night to approve at its next business meeting a resolution that would allow the BDC to invest $20,000 in setting up a Batavia Opportunity Zone investment vehicle.  

"These wards are distressed and would benefit from both large and small investment projects," Tabelski said.

The goal is to attract $5 million in investment funds. Tabelski said there are already potential investors Downstate who have expressed an interest in such investments.

Urban Vantage LLC, a Buffalo-based urban planning firm, would assist, including financially, in setting up the investment package.

The $20,000 would come from BDC's revolving loan fund, which has a current balance of $319,000.

At its next business meeting, the City Council will also be asked to approve a resolution that would allow the revolving loan fund, first established with Federal grants in 1997, to start assisting small businesses in Batavia with cash grants (in addition to continuing revolving grants).

Tabelski told the council that the purpose of the fund is to get money into the hands of local businesses to help spur economic development and the fund isn't accomplishing that goal if the money isn't being put to use.

The $20,000 initial investment would be used for legal preparation of the investment vehicle, listing and marketing the project, along with filing and accounting fees.

"We're setting this up so we are on the map as a proactive community taking advantage of a new federal tax law that is allowing investment into low-income census tracks and to show investors and developers that we're serious about moving our sites forward and creating our own fund as a city," Tabelski said.

There's much about how the new investments will work that hasn't yet been determined by the Treasury Department. The final guidelines should be released in a few weeks.

In general, the idea is if an investor has capital gains, the investor can move those funds to an opportunity zone investment fund and defer any capital gains tax until 2026. After five years, the basis of their taxable gains would be reduced by 10 percent. For example, if an investor had $100,000 in capital gains and invested those gains in an opportunity zone, the investor would owe taxes only $90,000 of those gains. After 10 years, the basis would be reduced another 5 percent.

Also, after 10 years, the investor would not owe any taxes on any additional gains on their opportunity zone investments. In other words, if that investor put $100,000 into an opportunity zone and at the end of 10 years, exited the investment and got back $150,000, there would be no capital gains tax on that additional $50,000 realized from the investment.

"It's really designed to attract investment in projects that have a high likelihood of appreciation," said Richard Rogers, a principal in Urban Vantage.

Tabelski first met Rogers and his partner Travis Gordon during the Downtown Revitalization Initiative process, when they represented Ken Mistler on the Carrs Reborn project. They worked together on developing a plan to create the opportunity zones under the tax code revisions.

Tabelski and Gordon both said Batavia could be attractive to investors not just because of a break on capital gains tax but also because of other credits available, such as historic building tax credits, new market tax credits, and the availability of PILOTs (Payment In Lieu Of Taxes) on building improvements.

"This is a marketable location for people from places like Downstate to put the money into to actually get a good return on their investment as well," Gordon said.

The BDC-initiated fund will focus on real estate investment but there's no reason private investors can't establish their own funds to support business startups and expansions. So long as the business is based in designated opportunity zones, investors would be eligible, potentially, for the same tax breaks on capital gains.

There are some guidelines yet to come yet, however, that will either expand or limit those opportunities. For example, initially, the tax code would have required at least 50 percent of a business's revenue to come from within the opportunity zone.

That would seriously limit, as Rogers noted, a new firm's ability to scale, which would make a much less attractive investment for venture capital.

Tabelski said there is already an investment fund established in Buffalo that might be interested in projects in Batavia.

Photo: Rachel Tabelski presenting the project to the City Council on Monday, accompanied by Richard Rogers and Travis Gordon.

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February 20, 2019 - 9:01am
posted by Howard B. Owens in bdc, batavia, downtown, business.

Press release:

The Batavia Development Corporation (BDC) Board of Directors reviewed the agency’s 2018 results and set goals for 2019 at their last board meeting.

In 2018 the BDC assisted eight projects that invested $3.5 million and pledged to create 38 new jobs. The JJ Newberry Building, award winner of the Robert Macon Award from the Community Design Center of Rochester, was the signature project opening its doors in February of 2018.

“The BDC is positioned to help small businesses and building owners in the City advance their projects,” said Pier Cipollone, president of the Batavia Development Corporation.

“We are also working to advance the Batavia Brownfield Opportunity Area (BOA) sites including Ellicott Station, Creek Park, City Centre, the Medical Corridor and the Harvester Campus.”

Other planning efforts guiding the BDC’s work include the recently updated Comprehensive Plan and Downtown Revitalization Investment (DRI) Strategy.

“The BOA, Comprehensive Plan and DRI Plan were created through a civic engagement model that allowed input and direction from the community to create a road map for land use and economic development in the City,” said Martin Moore, City of Batavia manager.

“The plans identify some of the most pressing issues in the City including blighted, contaminated and underutilized sites, housing issues and recommendations to reverse these trends.”

With the DRI award of $10 million the BDC plays a critical role in overseeing and advancing DRI projects. Currently the BDC is working with all of the DRI project owners and multiple state agencies to coordinate and assist projects.

The BDC successfully launched the $600,000 Batavia DRI Building Improvement Fund and is in the process of working with applicants before final selections are made.

“The momentum and excitement of the DRI has attracted new businesses and developers across the City,” said Rachael Tabelski, director of Economic Development for the BDC. “We will start to see scaffolding and construction starting in 2019.”

BDC Board approved 2019 goals:

  • Secure capital/business commitments of $5 million;
  • Secure business pledges to create 25 jobs;
  • Secure a micro-enterprise grant/loan program for the City of Batavia to foster new start-up businesses;
  • Achieve the BDC’s 2019-2020 budget;
  • Successfully administer and implement the Batavia DRI Building Improvement program;
  • Encourage, enable and incentivize downtown building owners to add new upper-floor apartments and new residential living in the City of Batavia;
  • Participate in the City’s environmental investigation and planning around the BOA Creek Park site;
  • Continue to enhance the BDC’s value and build strong relationships with the City of Batavia government, schools, businesses and residents, and other economic development organizations.
June 20, 2018 - 8:53am
posted by Howard B. Owens in bdc, Batavia Development Corp., batavia, business, news, notify.

The Batavia Development Corp. Board of Directors agreed this morning to hire Rachael Tabelski as the new economic development director, replacing Julie Pacatte, who left a couple of months ago to pursue a new job opportunity.

Tabelski is a Batavia resident and has been marketing and communications director for the Genesee Economic Development Center for more than seven years.

Board President Pierluigi Cipollone, who served on the search committee, praised Tabelski as clearly the most qualified among a field of five candidates, that included two from Buffalo, one from Texas, and a native New Yorker from the Finger Lakes region who currently works in Massachusetts.

"She came to the interview very well prepared," Cipollone said. 

He said she had a spreadsheet of all BDC's projects, worked side-by-side with Pacatte on preparing the city's successful bid for the state's Downtown Revitalization Initiative project, and clearly understands economic development.

The job offer to Tabelski, with a salary of $67,000 annually, which is $2,000 more than the BDC paid Pacatte, was approved unanimously.

"It's a no-brainer," said Board Member Steve Pies. "She is well versed in our projects and she is passionate about it.

The fact that Tabelski has been working with Pacatte on city projects as part of her job with GCEDC makes her a perfect fit for the job.

"There will be no hiccup," Valle said. "She is knowledgeable about everything. She has a great vision and goals, and she's fantastic."

Tabelski is married to City Council Member Adam Tabelski. Cipollone said the only conflict of interest will be for Adam Tabelski will be on votes related to his wife's compensation. He will need to recuse himself on those issues when they came before the council.

In the discussion, board members questioned whether the compensation was appropriate. Cipollone said that based on his research the salary range in similar-sized cities in the region is $70,000 to $90,000, so the BDC is on the low-end of the scale, he said.  

That prompted Steve Casey to ask if, notwithstanding her ties to the community, a low salary might encourage her to move on to another job sooner rather than later. Cipollone noted the BDC has limited funds to work with and anything paid in salary would mean less available for projects.

Rachael Tabelski will start her new job July 6.

May 30, 2018 - 10:31pm
posted by Howard B. Owens in bdc, Batavia Development Corp., downtown, business, news.

The Batavia City Council is willing to put something on paper expressing support of the Batavia Development Corporation but it can't make a commitment to funding the economic development agency for five years.

The BDC, through its president, former City Councilman Pier Cipollone, was seeking a five-year funding commitment from the council. Cipollone said without long-term support by the council, recruiting a new executive director will prove to be difficult.

“We need to provide some form of stability in the organization to hire a qualified candidate,” Cipollone said.

The executive director’s position has been vacant since the resignation a month ago of Julie Pacatte.

In making his case for the five-year commitment Cipollone cited the agency’s track record of attracting state and federal grants to spur development and the management of its own revolving loan fund to help local entrepreneurs. 

“For every $1 invested in the BDC,” Cipollone said, “the city has over $30 returned in public and private investment.”

Council President Eugene Jankowski explained that individual councilpersons were prohibited from making financial commitments beyond their individual terms of office. He then suggested that council adopt a non-binding “letter of support” for the BDC and place the item on the agenda for the next council business meeting June 11.

Among the accomplishments for the BDC during Pacatte’s tenure was the creation of several new residential units downtown, which have remained at full occupancy since going on the market, the conversion of the former Carr’s Warehouse into a mixed-use office space and apartment complex, and the opening of FreshLAB/Eli Fish Brewing Company.

The largest project still pending, however, is the Ellicott Station development, in which Savarino Companies plan to convert the former Della Penna and Santy’s properties into apartments, offices, and a brewery restaurant for Resurgence Brewing out of Buffalo. The groundbreaking for that project has repeatedly been delayed.

Cipollone addressed some of the frustrations and concerns over project delays and said it’s a very complex project. Because of the environmental problems at the site, there are multiple funding mechanisms from the state to help alleviate those above-market costs. Savarino is also using a complex private-equity-funding vehicle, which adds to the complexity of closing the funding.

The best the city can do, Cipollone suggested, is wait for Savarino to close funding. There isn’t, at least right now, a better option.

“It’s the only hope I’m aware of,” Cipollone said. “We had put it out to bid, and Savarino was the one viable company. They’ve done similar work in Buffalo where they’ve taken on a dirty site and have done an excellent job with them, so they’re used to dealing with this type of grief.”

In other council business, a draft resolution to fund the restoration of the Redfield Parkway entrance pillars failed to be moved to the next business meeting. Council instead asked interim City Manager Matt Worth to research other options to fund the project that has been estimated to cost between $57,000 and $67,000.

The Batavian's news partner WBTA assisted with this story.

April 13, 2018 - 11:12am
posted by Howard B. Owens in bdc, Batavia Development Corp., batavia, news, notify.

Press release:

The Batavia Development Corporation accepted the resignation of Julie Pacatte, economic development director in charge of economic development for the City of Batavia. Pacatte has accepted a position for a private-sector employer located in New York’s Capital District Region. 

“To say that she will be missed is an understatement, Ms. Pacatte was instrumental in a number of initiatives to improve the economic environment in Batavia,” said Pierluigi Cipollone, president of the Batavia Development Corporation. “She has advanced economic development in the city to new levels and facilitated more than $30 million in pledged investment into the city."

Pacatte was successful in leading the way to develop the Batavia Pathway to Prosperity (BP2), a first in the state PILOT Increment Financing (PIF) district that diverts new PILOT payments from three tax jurisdictions (City, School, and County) to develop the most blighted and impoverished areas of the city.

The program was developed following the city’s success in creating the Brownfield Opportunity Area and identifying sites primed for investment. These efforts lead to the attraction of $20 million investment pledge by Savarino Companies at the Ellicott Station brownfield site. 

Pacatte led efforts to craft the successful $10 million Downtown Redevelopment Initiative (DRI) application, was the driving force behind the BDC’s Public-Private Partnership, the freshLab restaurant incubator, as well as an administrator for loans and grants to aid new and existing businesses in the city.

She has helped bring the BDC to solid ground and advance our mission of new economic opportunities in the city of Batavia. The BDC still has much to do and will continue to work in the city helping small businesses, ensuring that the Savarino project can break ground this summer, working to advance development at Creek Park, assisting DRI project winners and working with all economic development partners in county and across the region. 

“Thank you, Ms. Pacatte for your passionate efforts to make Batavia a better place to work, live and play and I wish you continued success in your future pursuits,” Cipollone said.

February 22, 2018 - 11:32am
posted by Howard B. Owens in bdc, Batavia Develoment Corp., batavia, news, notify.

During a budget workshop Wednesday night, the occasionally controversial Batavia Development Corp. received across the board support from members of the City Council.

Up for discussion was the $110,000 the city provides to the BDC to fund its operations, including paying the salary of Economic Development Coordinator Julie Pacatte.

Councilman Al McGinnis opened the discussion suggesting that while it might be OK to fund BDC this year, he would like the funding reviewed next year.

By the end of the meeting, however, McGinnis backed off that request because he learned funding for BDC comes from the video slot machine proceeds paid to the city by Batavia Downs.

"As long as it's the VLT money, that's fine," McGinnis said after the meeting.

He said he doesn't have a problem with the BDC and likes the work Pacatte and the board of directors are doing. He would just like to see a more detailed, nuanced regular report from the BDC on its projects.

At that point, Councilwoman Kathy Briggs jumped in and said the BDC regularly emails council members about its projects.

As for residents who are sometimes critical of the BDC, she thinks more of them are excited to see what's coming, and once the two in-progress breweries open up, that will help validate the work of the BDC in the eyes of a lot of people.

"Once they start seeing something, they’re going to get excited," Briggs said. "They’ve been hearing it for so long and they ask when, but when they start seeing a little progress, they’re going to get excited."

Both during the meeting and after, Councilman Paul Viele said the money the City is providing the BDC is money that is being well spent.

"For the $110,000 that we’re giving them, we’re getting a bang for our buck," Viele said. "You see what the result is. It’s great for the city. Whatever we can do to help them, let’s move forward."

During the meeting, Councilwoman Rose Mary Christian questioned why BDC's budget was $125,000 last year. Interim City Manager Matt Worth explained that $15,000 was added to the budget because of some anticipated environmental remediation. It turned out that work wasn't necessary, the money wasn't spent and it was moved back into the general fund.

Worth also provided a short history of the BDC, which dates back a couple of decades. At one time, Ed Flynn, now a consultant working on the Downtown Revitalization Initiative for the state, worked for the city handling economic development. The BDC received federal funds to establish a revolving loan fund. After Flynn's position was eliminated, the BDC board and the loan fund remained but with nobody to administer it. That led to some problems with collections on the loans. A coordinator's position was created both to help with the administration of BDC functions, but also to pursue economic development opportunities.

Since then, during Pacatte's tenure: several new market-rate apartments have been added to the downtown residential stock; the Carr's Warehouse has been converted into a mixed-use complex; a developer has been secured for the former Della Penna property and the Santy's Tires property; and soon the J.J. Newberry building will become the Eli Fish Brewing Company with the FreshLab restaurant incubator as part of the project.

Councilman Adam Tabelski expressed concern that talk of defunding the BDC could hamper the BDC's relationship with developers and other development partners, creating uncertainty about the BDC's continued operation.

"It perplexes me that this matter is even coming up as a topic," Tabelski said.

Christian asked about the BDC's contribution to the city winning the region's Downtown Revitalization Inititiviative contest, with its $10 million prize for economic development, and Council President Eugene Jankowski said that Pacatte assisted in the application process plus the fact that the city has the BDC, as well as the Batavia Business Improvement District, gave the city more points to help in its winning score.

The budget workshop started off with a discussion about funding a part-time staff position at the youth bureau. In the past, the position was filled by a member of AmeriCorps but the Federal government has eliminated AmeriCorps.  

The County's Youth Bureau Director Jocelyn Sikorski, who operates the city's youth bureau program as part of a shared services agreement, said the job is critical to the operation of the youth bureau. 

After a discussion about the importance of the programs the youth bureau provides to give children in the city, especially children from poorer homes, constructive activities and meals, the council voted to fund the position.

"We pay now or we pay later," McGinnis said. "And if we pay later, we pay dearly."

The council also addressed the topic of a spray park on the south side of the city. On Christian's request, with council support, Worth said staff will work up a report on the cost of the smallest possible spray park in Farrall Park, just to give council members of an idea of what it might cost, not that the spray park will be located there or be a park like the one in the report.

In today's dollars, the Austin Park spray park would cost $500,000.

Tabelski said Albion is building a small spray park for a couple hundred thousand dollars.

The current spray park uses about six million gallons of water each summer. To picture that much water, he said, imagine filling and emptying the water tower over by the VA Center four times.

The city buys that water at a wholesale price.

February 4, 2016 - 1:04pm
posted by Howard B. Owens in batavia, pathway to prosperity, business, bdc, GCEDC.

A plan hatched by the City, the Batavia Development Corp. and the Genesee County Economic Development Center to redirect some money generated by economic development into brownfield area cleanup received the support Wednesday of the county's Ways and Means Committee.

The committee approval means the proposal will be voted on by the full County Legislature at its next meeting.

The plan, unique in the state, called Batavia Pathway to Prosperity, will create a fund from PILOT (payment in lieu of taxes) payments that can be used for environmental clean up on properties within the city's brownfield opportunity area, a 366-acre designation covering the city's core.

A PILOT provides a business undertaking local economic development (creating jobs, increasing the tax base, adding to local economic growth) with a break in taxes for the increase in assessed value on the property being developed. Typically, if a business puts a new building on vacant land or adds onto an existing building, the assessed value of the property will increase, which means higher property taxes paid to the city (town or village), school district and county. A PILOT reduces those taxes in exchange for payments to the taxing jurisdictions. The payments could be in the range of 70 percent of what the increase in taxes would have been without the PILOT. The property owner still pays 100 percent of the taxes on the original assessed value. PILOTs typically run for 10 years on a graduated scale, with property taxes due increasing every two years over the life of the PILOT.

The new program would redirect half of the PILOT payments from projects in the city to an investment fund (a PIF) that would be available to property owners in the future who wish to redevelopment brownfield properties and need assistance with the environmental cleanup.

"This creates a fund that gives the BDC and the EDC working together and providing collective oversight the opportunity to look at broad range investment opportunities," said Steve Hyde, CEO of the GCEDC. "(The projects) still have to be for the public good, but (the property owner) can turn around and maybe do some creative financing type of things to really move some property and get them redeveloped and start to heal the poverty and blight down in our core."

Marianne Clattenberg, now a legislator but a former City Council president, said the city has needed something like this for a long time, but had other problems to solve first before something forward-looking could be brought to the table.

"We knew going in we could never do this by ourselves, that we needed partners and we needed to have everybody on board and engaged to bring the city back to where it needs to be," Clattenberg said. 

County Manager Jay Gsell said a program like this could spark a renaissance in the city.

"The need is unique and this is the kind of structural financing that gives the adroitness necessary to having this kind of money available," Gsell said.

The committee also approved a city plan to provide tax relief on so-called zombie properties. The program would provide a PILOT-like tax abatement on the increase in assessed value of a home that is currently vacant and has been vacant for some time that a person buys, renovates and then lives in. While the abatement isn't available to an investor who buys a zombie house, fixes it up and then rents it out, the abatement could be available to the next owner if that same investor fixes it up and then sells it to an owner-occupant. 

There are 50 to 60 such zombie properties in the city, not all of which can be saved, but some retain some value and could be renovated. The property must be single family, or converted to a single-family residence.

Hyde said the two programs together are the sort of thing that can spur economic development in the city's core and attract the Millennials who will be taking jobs at STAMP (Alabama's Science and Technology Manufacturing Park) to the city.

January 27, 2016 - 6:48pm
posted by Howard B. Owens in bdc, economic development, batavia, business.

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Both Julie Pacatte, economic development director the Batavia Development Corp., and City Manager Jason Molino see a very bright horizon for the City of Batavia when they look five years down the road.

A lot of groundwork has been laid over the past couple of years to help transform Batavia's economy and make it a place where both Baby Boomers and Millennials will want to live, work and play.

"Five years from now we'll see a dramatic difference in the city of Batavia," Pacatte said. "I think we will be a community of choice for the Millennial Generation. We are a more diverse community. There will be confidence in investing in the city whether in your home, your own home improvements, or if it's investing in a property Downtown to attract business. I think there will be a dramatic transformation of the landscape."

The optimistic tone was struck during BDC's annual meeting, which was held in council members in City Hall.

And optimism is one of the key drivers of change and growth, Pacatte said during her presentation.

Molino shares the vision.

In fact, he predicts by the Summer of 2017, Downtown Batavia's skyline will be peppered with construction cranes.

"I think we're at the beginning of a renaissance for Batavia," Molino said. "I say that with one caveat, and that is we need to continue with the forward effort we've put forward in the past few years."

That includes improvements to infrastructure, such as sewers and sidewalks, reworking the zoning code through the general plan update process, supporting the BDC and focusing on brownfield redevelopment.

The city and BDC are feeling pretty good this week about a big step forward on one of its biggest projects, transforming the Santy Tire and Dellapenna properties from blighted eyesores into commercial redevelopment.

The BDC is taking over ownership of the property, a first step toward selling the parcels to private developers.

Pacatte said we should expect an announcement on what's coming within the next 30 to 60 days.

Molino is also proud of the City's Pathway to Prosperity Plan, the first of the kind in the state, uniting the city, the county, the school district, the BDC and GCEDC in an arrangement to use funds generated by PILOT payments to help offset the cost of brownfield redevelopment.

The city has designated 366 acres in the primary corridor as the Batavia Opportunity Area (or Brownfield Opportunity Area), with the ability to offer special incentives to developers willing to turn blighted properties into economically viable properties.

The BDC is the lead agency in that effort.

Besides the tone of optimism during Wednesday's meeting, the overriding theme was, ready or not, the Millennials are taking over.  

In the United States, there are now more Millennials than Baby Boomers and by 2020, Millennials will make up nearly half of the nation's workforce.

And it turns out, Millennials and Baby Boomers aren't all that far apart in their wants and aspirations, putting Batavia in a prime position to serve both.

Both cohorts want livable communities, ones that are affordable, accessible and walkable. While boomers are downsizing, Millennials are conscious of their impact on the planet; boomers seek affordable services, Millennials watch their spending because of college debt loads; Boomers have accumulated the wealth to enjoy community living, Millennials are urban-minded.

Some 64 percent of Millennials want to start their own businesses, Boomers have the experience to be mentors and the means to be buyers and investors.  Boomers are team players, Millennials are collaborative. 

Both are interested in building communities that are engaging and filled with entertainment opportunities. They are interested in communities that offer a sense of place.

Pacatte ended her presentation with three questions for audience members to ponder:

  • Are we investing in place?
  • Do you see value in building a community?
  • How optimistic are you?
January 21, 2016 - 9:23am
posted by Howard B. Owens in bdc, batavia, business.

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Press release:

At a Special Meeting of the Batavia Development Corporation (BDC) early January, President Ray Chaya thanked fellow Board Member Gregg Torrey for serving eight years as a director of the City’s economic development agency. The BDC instituted term limits during Torrey’s tenure. He has represented City business development efforts since June 2007 and served many years as an officer of the organization.

The BDC also elected three new members:

· Mary Valle, second generation Valle Jewelers business owner, active Vibrant Batavia volunteer and former Business Improvement District director;

· Steve Pies, fourth generation Max Pies Furniture business owner and past Genesee County Chamber of Commerce Board president;

· Pier Cipollone, former City Councilman and past BDC Board president.

Fellow Board members include Ray Chaya, Susie Boyce, Peter Casey, Kathy Ferrara, Jay Sackett, Barb Shine and ex-officio member, City Manager Jason Molino. The Board meets the fourth Wednesday of each month at 7:30 a.m. in City Hall.

November 5, 2015 - 8:42am
posted by Howard B. Owens in Batavia Brewing Company, downtown, batavia, business, freshLAB, bdc.

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Matt Gray remembers the old J.J. Newberry's Downtown, with its creaky floors, dusty inventory and a lunch counter he would saddle up to next to his grandmother to enjoy a hot dog.

Now he owns that building, but his ambition far exceeds nostalgia. It's about revitalization and doing his part to bring vibrancy and economic growth back to his community.

Gray, along with partners Jon Mager and Matthew Boyd, will be the owners of the anchor tenant in an ambitious project backed by the Batavia Development Corp., Genesee County Economic Development Corporation, and Rural Development/USDA to help aspiring restaurant owners get a start in Downtown.

The partners are creating Batavia Brewing Company, a new microbrewery at 109 Main St., Batavia.

The location will also be known as freshLAB, a restaurant incubator where entrepreneurs with great ideas for unique menu items sourced mostly with local and regional ingredients can see if they can turn their food concepts into thriving businesses.

Mager said the ambition for the project is rooted in the fact that he and Gray grew up in Batavia, are businessmen in this community, are raising families here and want to see their community thrive.

"We wholeheartedly believe Batavia is a great place to live, work, play and raise a family," Mager said. "By joining the ranks of the many great places to eat and drink Downtown, we hope to be part of a complete and full resurgence and revitalization that is attracting people back to Downtown."

Gray said they picked a downtown location because that would generate the greatest economic impact, both for other restaurant and bar owners and for themselves.

"There were a lot of other pluses on a lot of other sites, including parking, but (what) it came down to, is we believe in the clustering effect," Gray said. "There are so many good restaurants and so much good nightlife already down in this area. Adding more to it is only going to make each one of us healthier. By going off on our own, we're going to have to fight uphill to trying to get people to come to us." 

Mager and Gray, who got his start in food business ownership with Matty's Pizzeria and currently own's Alex's Place along with restaurants in Southern states, first started talking about opening a brewery in 2013. In 2013, Mager completed training with the American Brewers Guild. 

At the same time, Julie Pacatte and the BDC board were looking at all this data saying too much restaurant and bar spending by local residents -- some $12 million -- was being spent outside of Batavia. People wanted more food choices locally. And there were a number of people who would come to the BDC for assistance in starting restaurants, but just didn't have the wherewith all to pull it off. So this incubator idea, which has been successful in other markets, started forming.

Pacatte heard about Mager and Gray's ambitions and recognized the possibility of a partnership.

"We want those dollars to say here," Pacatte said. "We want a reason for people to be eating and drinking in Downtown Batavia, more reason to do that. We want to offer a product that really ties our commerce, our downtown businesses to our agriculture community."

In a survey, the vast majority of respondents said they want healthier food choices in Batavia, they want more ethnic food (Millennials especially, marketing data shows, go for Far Eastern cuisines and spicier choices), and diners want more seafood.

"We're hoping that in this concept and in this project, that we're able to draw some of the folks in who can create some of those plates and meals and sandwiches or salads, that will be able to invent those kinds of meals and lunches and dinners and breakfasts here in Batavia," Pacatte said.

Rural Development is kicking in more than $67,000 in grants to provide equipment and furnishings for the "dining hall" element of the facility, that will be a shared space between the brewery and the food vendors. 

Steve Hyde, CEO of GCEDC, praised Gray and Mager for their foresight and willingness to take a risk, as entrepreneurs, to start a new business concept in their own community that will help their own community. Batavia is on the rebound, Hyde said.

"We have the innovation economy in our community now, higher-paying jobs, bigger-paying jobs, so our kids (can) stay here, come back home, and guess what, it makes this place a great place live, work and play and opportunities like this are going to make this happen even more," Hyde said. "It's really a great way to shine up the apple here in the city."

He said Mager and Gray are visionaries.

"It's so rewarding to us to have our local guys step up to the plate, invest in their community, and do what they're good at, 'cause this isn't new news for these guys," Hyde said. "This is right in their wheelhouse and they'll make it a great success."

March 10, 2015 - 12:32pm
posted by Howard B. Owens in batavia, business, bdc, Vibrant Batavia.

John Deleo and Kathy Briggs had one word for those who think the City of Batavia should invest in its future: No.

On a pair of resolutions aimed at improving the quality of life and business climate in Batavia, Deleo and Briggs steadfast stalwarts in opposition, decried the expenditure of public money on the projects.

Each resolution passed by votes of 7-2.

The resolutions passed by the council extend the economic development services agreement for two years with Batavia Development Corp. and provide Vibrant Batavia with two years to become self-sustaining.

There was one growth-related measure that garnered yes votes from Deleo and Briggs. Deleo made a motion, seconded by Briggs, to eliminate the assistant city manager position.

The motion failed 2-7.

Councilwoman Rose Mary Christian, outspoken as always, extolled the virtues of economic development and the work of Vibrant Batavia.

"We need all the development we can get," Christian said. "We need all the revenue, we need the sales base, we need everything we can get. We need everything working this year at this time because if we don't go forward, we're going to go backwards. We're going to be in a hole and we're never going to get out."

Prior to the meeting, council members received a memo from City Manager Jason Molino called "Budget Sustainability," which made the case for the city investing in economic development and neighborhoods.

For the past several weeks, budget discussions have been dominated by voices advocating for slashing in the three areas of city spending intended to help the city grow: The assistant city manager position, the BDC and Vibrant Batavia.

Molino's memo argued that without investment in growth, Batavia will be doomed to decline.

"Public revenue needs an employed community, so the right question is not necessarily where should we be trimming the City workforce budget, but rather, the right question is: Are City resources optimally structured to reposition Batavia as a great place to raise a family, start and operate a profitable business, and in general, appeal to families," wrote Molino.

Pierluigi Cipollone, a small businessman, argued in favor of investment over retrenchment. 

"We've got to make an investment," Cipollone said. "Mr. Molino sent out a memo talking to the revenue side of the profit and loss of the balance sheet. We need to invest to get what we want for Batavia. In the old days, we had civic groups that did a lot of what we want, but those civic groups have gone away for the most part. We need to get some of that back. When the pride returns, businesses will return."

Deleo said that he was both being responsive to his constituents and standing by the cost-cutting promises of his campaign by opposing the growth initiatives. 

It's not the job of government, he said, to invest in economic development.

"We're going to be leaner," Deleo said. "We're not going to reach into the pockets of our poor senior residents."

Briggs said she attended last week's annual luncheon for Genesee County Economic Development Center and came away impressed by the economic development efforts of the local agency.

"They're bringing business into the county, and Batavia is part of Genesee County," Briggs said. "I'm like, OK, GCEDC seems to be on track. That's what I gathered from that meeting. We do have somebody who is going to do the job of economic development, GCEDC."

Other council members pointed out that the focus of GCEDC is something that is completely different from the BDC. The BDC is focused on the city, which includes mostly brownfield development demands. GCEDC handles the entire county and most of its developments are greenfields outside of city limits.

Briggs also mentioned that the city is served by the Business Improvement District, but Councilman John Canale pointed out that BID works strictly Downtown, whereas the BDC serves the entire city.

The funding approved for Vibrant Batavia -- $45,000 for one year and a smaller amount in year two -- also comes from a different pot of money than originally proposed. Rather than being drawn from reserve funding, a portion of the city's revenue share from Batavia Downs will be used to back the nascent community booster group.

The group will also be asked to pay for a new $10,000 slide in Austin Park by donating $5,000 back to the city and raising the remaining $5,000.

While the resolutions for the BDC and Vibrant Batavia assume two-year commitments for the city, Molino, upon questioning by council members, said the council will have the option to reduce or eliminate funding next year by passing another resolution.

March 6, 2015 - 4:28pm
posted by Howard B. Owens in batavia, City Budget, bdc, Vibrant Batavia.

It takes money to run a city, and economic growth is what allows a city to provide services for its resident, City Manager Jason Molino believes.

As the City Council wraps up its 2015-16 spending review, Molino is hoping council members will take some time for a serious and in-depth discussion of the revenue side of the budget picture.

"The revenue side of the budget needs focus and we need to understand how to grow that so we enhance and sustain the local economy so that we can provide quality services to residents," Molino said in an interview today. "To sustain a budget we need to ensure a consistent and steady revenue stream. This means the tax base is growing and people have more disposable income."

Molino has written a memo for council members titled "Budget Sustainability (pdf)." It lays out the case for ensuring the city takes steps to improve the economic health of Batavia.

The budget discussion so far has focused mainly on cost containment. The council has taken little time to focus on revenue, Molino says in the memo, but the reason the budget reflects a $250,000 reduction in spending isn't because of cost containment goals. It's because of anticipated declines in revenue.  The city is being forced by local economics to cut spending.

That should give council pause as it considers how to handle programs meant to improve the economic vitality of Batavia, such as the Batavia Development Corp. and Vibrant Batavia.

"Public revenue needs an employed community, so the right question is not necessarily where should we be trimming the City workforce budget, but rather, the right question is: Are City resources optimally structured to reposition Batavia as a great place to raise a family, start and operate a profitable business, and in general, appeal to families," Molino writes in the memo.

There are troubling signs in Batavia's economic outlook, Molino notes.

  • The city's taxable assessed value of property is not growing;
  • Median family income is below average and poverty is high, according to Moody's Investor Services;
  • Three of the city's six census blocks are classified "highly distressed areas";
  • Five of the city's six census blocks are deemed "low-income."

"A balanced approach to the city budget needs to include strong initiatives that will provide cost containment, but also strategic direction that will improve the quality of life," Molino writes. "Growth in the tax base and resident income are the lifeblood to supporting municipal services, as well as improved quality of life for City residents. All of our focus must be on retaining our households and repositioning Batavia in the coming years to attract more households and businesses."

There are those who believe it's not the role of government to "create jobs" or focus on economic growth. Molino disagrees.

"If you look at the past 10 years, the amount of economic growth, the big job growth, has been the result of public-private partnerships," Molino said. "The ag park, seven years in the making, is the first industrial development in Genesee County in the last 50 years. That came about because of cooperation between the city, county and town, all of us working together."

A local government that is focused on streamlining the process and marketing a community's assets is going to have more success than one that doesn't, Molino said.

"I think the attitude needs to be what are the reasons we should be doing this and not what are the reasons we shouldn't be doing it," Molino said. "It's the responsibility of a municipal government to reposition the community. If you're completely absent from funding economic growth, the community is going to be absent from opportunities for economic growth."

The city's budget is roughly $16 million and that spending, which provides all of the municipal services residents have come to expect from their local government, is entirely dependent on how well the local economy does. Without investment, not only is growth difficult, but a precipitous decline is a real possibility.

While there's no portion of the property tax levy going into funding Vibrant Batavia or the Batavia Development Corp., the amount of money needed to keep those growth projects going is less than 2 percent of the city's planned spending.

"Sure, we can reduce spending by another 10 percent, but if you don't have a vibrant community and a vibrant business base, all you're going to have is a more depressed Batavia with less capacity to provide services to residents," Molino said.

If you've downloaded the Reacht App for your smart phone, at some point within the next day, we'll ask you this poll question: Should the city fund economic growth initiatives? To download the app, click here. Those who download it will be eiligible for a chance to win a $5 gift card from Southside Deli.

January 27, 2015 - 7:19pm
posted by Howard B. Owens in batavia, economic development, downtown, bdc.

The City of Batavia has realized a 500-percent return on its $360,000 investment in community development, Julie Pacatte, economic development coordinator, told the City Council on Monday night.

The Council has authorized $90,000 a year over four years to the Batavia Development Corporation- that's $360,000. In return, the BDC has generated more than $2.1 million in public-private investment in Downtown.

Several of the projects managed by BDC were building owners constructing renovated apartments, all of which rented immediately.

But perhaps the biggest win is the renovation of the old Carr's Warehouse in Jackson Square.

The property sat vacant and deteriorating for three years. The city marketed the building as a revitalization project and eventually found a developer.

With the help of a $115,000 state grant, Paul Thompson and his partners invested more than $500,000 in constructing four apartments and a first-floor office area.

The vacancies were filled as soon as construction was completed.

The property was assessed at $30,000, but since it was a city-foreclosed property, it was generating zero tax revenue. Now it's assessed at more than $200,000 and on the tax roles. (The developer has the option to apply for a tax abatement by March under a municipal program that works like a PILOT, offering tax relief on the increase in assessed value).

The nine new residential units, using current economic models, are worth about $5,000 each in extra consumer buying power Downtown, Pacatte said.

Pacatte's job has been funded in the past through the use of revenue generated by Batavia Downs and transferred by the state to the city on an annual basis.

Since this is not general fund revenue, it doesn't have any impact on local property taxes. Even so, there is some question as to whether the current council is willing to once again use city money to fund the development coordinator's position.

Pacatte's Monday presentation could be seen as a pitch to save her job, but that didn't stop her from getting a little feisty. She was full of energy during her presentation, and when she spoke about negative attitudes, Councilwoman Rose Mary Christian challenged the remark and Pacatte shot right back with her own view.

The topic of the exchange was the mall, which Pacatte had already called a travesty and an embarrassment and one of the factors weighing down economic development in the city.

"I think maybe people have a negative attitude because they have heard the same old thing year after year," Christian said. "How many years have we heard we're going to do something with the mall. I've sat on this board for 24 years and I've heard year after year we're going to do something with the mall."

Pacatte responded that she didn't say the BDC was going to do something with the mall, just that the issue needed to be resolved.

The negative attitude discussion harkens back to a consultant report from three years ago, which Pacatte referenced, that said one of the things hurting Batavia is a persistent, nagging culture of antagonism to new proposals.

From the report (pdf; page 29):

... many residents and business leaders alike are quick to say what is right about the place, but only after they or others have said how it is not the community it used to be. This habit goes to the core of the challenge for Batavia. Regardless of how effective the city government is, or how successful the schools are, or how homeowners keep up beautiful homes, there is always the perception that things used to be better. This sets up an impossible goal: Batavia needs to be as good as its finest past features, but without any of its previous problems, and certainly without any of yesterday’s resources. It allows critics to say, “see, I told you so.” It lives on phrases like “that can’t be done,” and “we tried that,” and “here’s why that won’t work.” Until the community addresses this problem, Batavia won’t achieve its full and substantial potential.

Pacatte has succeeded in helping to bring new development to Downtown Batavia despite the naysayers. Each new apartment development was met by a wave of criticism and endless predictions that nobody would rent such high-priced units.

Yet, there are no vacancies. Landlords rent the apartments as quickly as they become available.

The Carr's project was roundly criticized, yet it's successful.

The negative attitudes are just something to try and work though as a professional, Pacatte said after the meeting.

"I think it's important to listen to what the community is saying, but we also have access and in our profession we understand that these projects do happen and happen a lot in other communities and there's no reason it shouldn't happen in Batavia," Pacatte said. "We bring the folks to the table who can make it happen.

"It's important to hear some of the negativity at the time to maybe rethink how we approach a project," Pacatte added, "but it's important to be a professional and understand that it is possible and persevere to that end. I was hired to impact the economic community in Batavia and I believe that's what I'm doing when I push those projects forward."

In 2015, the BDC will look to advance the Batavia Opportunity Areas, such as the Della Penna property on Ellicott Street, and right next to it, the Santy Tires property.

The mall fits in there somewhere, as well, though that is a much stickier problem with all of the competing interests and ancient animosities. Pacatte believes there might be an opportunity to apply for funding in 2015 through the Finger Lakes Regional Economic Development Council to pursue some sort of long-term solution.

She also sees as her job in 2015 an effort to foster a greater entrepreneurial spirit in Batavia, to coordinate and implement a new micro-enterprise grant program, and support an industry-specific incubator.

The BDC will also apply for more redevelopment grant money from the state.

October 28, 2014 - 9:56am
posted by Howard B. Owens in batavia, business, bdc.

During Monday's meeting of the Batavia City Council, three local businesses were honored by the Batavia Development Corp.

Each received a plaque in recognition of the owners' successful completion of a loan program that helped them expand or grow their businesses.

Above, Susan Francis, owner of The Color Salon, with the her husband John Zola, receiving a plaque from Ray Chaya, a member of the BDC Board, Council President Brooks Hawley, and BDC VP Gregg Torrey.

CORRECTION: Francis and Zola are not married.

Steve Mullen, owner of Larry's Steakhouse.

Mary Valle, co-owner of Valle Jewelers.

September 5, 2012 - 10:52am
posted by Howard B. Owens in batavia, business, bdc, Chad Zambito.

Chad Zambito, an appointed Town of Batavia board member and candidate for the GOP nomination for that seat, expected the assets of his former laundromat to sell for somewhere close to $30,000.

The actual highest bid on Tuesday, in an auction conducted by the Bank of Castile, was $3,500.

That's enough to cover Zambito's debt to the bank, but he still owes more than $14,000 to the Batavia Development Corporation, which provided Zambito with a low-interest loan in 2010 to finance upgrades to the laundromat.

This morning, Zambito issued the following statement:

I continue to work towards resolving the issues related to the closing of my business and intend to meet with the BDC board to resolve any outstanding issues. I have started the Chapter 13 process which in the short term will provide me 60-90 days to get my finances in order. If I complete the process, the result would be a court ordered and monitored five-year repayment plan. 

Grammy's Laundry closed earlier this year and Zambito said much of the business's difficulties stemmed from a plumbing problem in the mall where Grammy's was located. He said the business never recovered from the set back.

A former laundromat owner who observed Tuesday's auction said just one of the high capacity dryers at Grammy's retails new for about $3,500. There was some 40 or so washers and dryers, some in apparent disrepair, in the facility. The buyer is an out-of-county laundry owner who reportedly plans to remove all the machines and take them to another of his laundromats.

Zambito's GOP primary opponent is John Gerace, who held the office for nearly a decade before resigning in April after a Town of Batavia Fire Department awards and installation dinner where Gerace reportedly had some sort of confrontation with Supervisor Greg Post.

December 1, 2011 - 9:45am
posted by Howard B. Owens in batavia, business, downtown, bdc.

Press release:

On behalf of city hall, the Batavia Development Corporation (BDC) has distributed a request for proposals to attract developer interest in the former Carr’s warehouse building located on Jackson Square in Batavia. The city has asked for proposals to convert an historic 1880 warehouse into a productive mixed-use, office, commercial or residential building.

“This 6,000-square-foot historic conversion project, considered small to some, could have a real impact in downtown Batavia,” said Jason Molino, city manager. The city acquired the property in 2010 through a delinquent tax foreclosure process.

Consultants have recently indicated a lack of Class A office space availability, a void in certain retail sectors and a gap in modern housing stock for professionals. Each of these uses would be permitted for this project under the city’s C3 zoning law.

Inciting revitalization efforts through public and private partnerships has become the norm for the City of Batavia.

Neighboring to the warehouse, other public-private efforts have resulted in the redeveloped Center Street Smokehouse restaurant and the 19-25 Jackson Street mixed-use redevelopment by the Valle family to house their jewelry store. Habitat for Humanity also acquired a distressed residential property though a unique public-private arrangement with the city.

On a grand scale, the Mancuso Business Development Group wrapped up its multimillion dollar Masse Gateway redevelopment project to improve the product mix, accessibility and infrastructure to the century-old 30-acre industrial site. The city had secured a $1,500,000 RESTORE NY Communities grant that was redistributed to the developer upon satisfactory completion of the project.

“Substantial renovations to more than 100,000 square feet of flex-industrial space would not have been possible without the city’s support,” said Tom Mancuso, president, Mancuso Business Development Group.

Earlier this year, the city submitted a NY Main Street grant request that is expected to leverage a $275,000 private investment to improve 30 downtown commercial and residential properties. And just last month the city applied for a $100,000 grant through the consolidated funding application process to foster job creation at the new Save-A-Lot store prepping to open after considerable renovations to a longtime vacant building. Both of these projects anticipate award announcements this month.

The City of Batavia serves as the regional economic center for Genesee County situated between Buffalo and Rochester at Thruway exit 48. Four State Routes (5, 33, 63 and 98) traverse the city and provide easy access for both consumers and workers. Daily traffic counts top 40,000 vehicles and more than 3,000 people are employed within walking distance of the featured redevelopment site. To request a proposal package, contact the Batavia Development Corporation at 585-345-6380 or [email protected].

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