Developers want tax relief for Harris Hill Commons apartment project in Clarence

The group of developers – led by M.J. Peterson Corp.’s Victor “Pete” Peterson – proposing the Harris Hill Commons residential complex in Clarence is seeking more than $900,000 in tax breaks from the town’s industrial development agency for a mixed-use portion of the project.

But with market-rate housing projects generally not eligible for tax breaks, it’s not clear if the mixed-use buildings with ground floor commercial space cited by the developers would qualify for taxpayer subsidies, especially absent other special justifications.

Peterson, together with Randaccio Builders’ Alan Randaccio and homebuilder Elliot Lasky, are planning to construct a complex of 31 two-story buildings in the eastern suburb, using 11.5 acres of undeveloped land at 8450 Sheridan Drive. That’s the northwest corner of the intersection at Harris Hill Road.

In the works for the past couple of years, the three-phase project by their Windsor Ridge Partners would consist of 18 two-unit townhouse buildings arrayed in two rows in the rear, plus two more doubles and five four-unit townhouse and four-plex buildings in the middle, and eight identical small buildings in front with three apartments and first-floor commercial space in each.

But the $30 million project has been hit by rising construction costs and higher interest rates. So the developers are seeking help from the Clarence IDA for the mixed-use portion of the project, which totals about 52,316 square feet at a cost of $12.91 million.

That’s the eight identical two-story buildings in the front of the site, each with first-floor retail space and 21 apartments in all. It would consist of 11,818 square feet of commercial space and 40,498 square feet of residential space.

The three developers are working on that part of the project with Kulback’s Construction owner David Kulbacki. They’re applying for $433,125 in sales tax relief, $72,000 in mortgage-recording tax abatement and a payment-in-lieu-of-taxes on the property that will save $462,556. A public hearing was held June 22, and public written comments may still be submitted to the agency, which will consider the application next month. Without that help, the project won’t move forward, the group said in its application.

“Due to the high cost of construction, without financial assistance, the Developer will not have an adequate rate of return, and this will be deemed too risky by the developer,” the group wrote. “The consequence to the Town of Clarence is (a) lack of available housing and (b) loss in potential property tax revenue.”

However, the application doesn’t explain how the project would qualify for assistance either. It would create only two jobs. It’s not an adaptive-reuse project, nor is it senior or affordable housing. It’s not located in a highly distressed census tract, has no impact on manufacturing jobs or facilities, and is unlikely to attract patrons from outside the area – all of which are criteria that could justify tax breaks on a retail or residential project that is normally not eligible.

According to the application, project expenses include $277,000 for the property acquisition, $10.18 million for construction, $2 million for infrastructure, $400,000 in professional fees and $50,000 for furniture and fixtures. Funding includes $3.31 million in equity from the developers and $9.6 million in bank financing.

Overall, the development would have 80 residential units in all, plus 24,800 square feet of commercial or retail space, according to the plans by Silvestri Architects and Greenman-Pedersen Inc., which were approved by town officials Jan. 11. Parking would include 239 spaces along the streets, 16 accessible spaces, 40 garage spots and 40 driveway spaces.

The developers hope to start work immediately, with completion by May 2024.

The Buffalo News

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