With the last two approvals secured, Ellicott Development Co. is poised to begin work within the next month on turning the Stereo Advantage property along Main Street into a mixed-use project anchored by a hotel and apartments.
The Amherst Planning Board, on Jan. 19. signed off on an environmental review and the Amherst Industrial Development Agency , on Jan. 20, unanimously approved an incentive package that’s critical to financing the $22.74 million project.
The actions clear the way for Ellicott Development, through its 5000 Group LLC affiliate, to close on the property and raze the buildings that sit on the parcel. Stereo Advantage, next week, will be moving into the Walker Center.
Carl Paladino, Ellicott Development chairman and founder, said he expects to close on the deal by Feb. 15, with his company paying $3.6 million for the 2.5-acre parcel located at the corner of Main Street and S. Forest Road.
Plans call for a six-story, 219,640-square-foot building to be constructed that will house a 120-room upscale hotel, 33 market-rate apartments, 4,300-square-feet of retail space, 3,000-square-feet of restaurant space and 234 on-site parking spaces including 183 in a covered parking ramp.
Paladino said he is finalizing a deal with a national hotel chain and the brand will be its first in the Buffalo Niagara region. Talks are also underway for an upscale women’s retailer that, too, will be using the complex to make its local debut.
Paladino said the AIDA incentive package was crucial to making the project financially viable.
“We’re building a high-quality, upscale operation,” Paladino said. “We know the risks. Without the AIDA, it would be very, very difficult for us.”
Paul Gregory, Ellicott Development vice president, added the AIDA package helps offset the expensive costs connected with the project’s development and also bridges the gap because the complex likely won’t be eligible for traditional bank financing for three years. Higher interest-level construction loans will be used initially.
“This is not a 15-year lease with Walgreens,” Gregory said. “Hotels are difficult to take to the bank to get the financing we need.”
The total AIDA benefits amount to $1.9 million, but the project is expected to have a $21.98 million economic benefit to Amherst, including hiring 50 people and generating $2.65 million in new revenues for the town, Erie County and the Williamsville School District.
The tax breaks are strictly for the hotel portion of the project and not the apartments or retail components, said James Allen, Amherst IDA executive director. The incentives, potentially, will create a 20-to-1 return on the town’s investment.
Amherst Supervisor Dr. Barry Weinstein, now and Amherst IDA director, the project not only will create new jobs and revenues but sets the stage for other new developments along the Main Street spine running from Snyder and Williamsville out to Transit Road.
Paladino agreed with Weinstein’s assessment.
“We think this will generate other (development) opportunities in the future,” he said.
With construction starting later this winter, the project should be ready to welcome its first tenants next year.
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