Activity has slowed down at many of the region's economic development agencies, as development projects are hindered by interest rates, higher construction costs and tightened lending.
But you wouldn't know it in Cattaraugus County.
In recent months, the county Industrial Development Agency has been reviewing and approving tax breaks for four hospitality projects. Here is a closer look.
Microtel
Rochester-based Indus Hotels and its parent, Indus Hospitality Group, are renovating the 50-room Microtel Inn & Suites by Wyndham in the Town of Allegany, in a $1.75 million project.
The two-story hotel at 3234 State Route 417 has 20,694 square feet of space, and has operated since 2004, with a fitness center, a business center, and guest laundry facilities, but it needs upgrades.
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Indus, led by President Goonjit "Jett" Mehta, says the renovation "will benefit the community with an increase in tourism and business infrastructure," but said the renovation would not be undertaken without help from CCIDA. Costs include $794,000 for the renovation and $954,989 in furnishings and fixtures, while funding includes $1.4 million in bank loans and $349,798 in equity.
CCIDA awarded the project $924,400 in subsidies, including $798,792 in property tax savings, $108,159 in sales tax breaks and $17,490 in mortgage-recording tax relief. The company pledged to retain 13 jobs and add four more. Work is expected to finish by October.
Indus, a family-owned company founded in 1988, operates more than 70 properties and employs more than 1,200.
Telemark Motel
An investor group wants to spend $1.85 million to renovate and upgrade the former Telemark Motel in Ellicottville into a "higher-end" boutique establishment that can support tourism and attract more guests to the trails and ski slopes.
Located at 6089 Route 219, the Telemark is just 200 feet from Holiday Valley, but its nightly rates will still be lower than other accommodations.
Route Two Nineteen is proposing to rehab the 14-room "value roadside" motel and its 7,000 square feet of space, creating 12 standard rooms and two two-bedroom suites, while also leasing the 3,000-square-foot former Slopeside restaurant to a new operator, according to the application from the group, which includes Reid Smith II of Randolph, who previously worked with CCIDA in 2015 on a project in his home community, when he bought two storefronts in that community, renovated both buildings, put in a laundromat and created new housing.
Under the $1.85 million project, all of the rooms would be renovated, with "new furnishings, finishes and updated amenities to meet the needs of today's travelers," along with "a reimagined outdoor space," according to a CCIDA summary. Costs include $1.4 million for acquisition of the motel and $330,000 for renovations, while funding includes $700,000 in bank financing and $1.05 million in equity.
The group pledged to create 10 jobs for the project, but said they needed nearly $18,000 in tax breaks because "hospitality is a sector that banks are hesitant to loan against," forcing them to spend their savings on the down payment instead of the rehab, according to their application. Without assistance, "the improvements and rehab will not be as extensive."
"The financial assistance will allow us to invest more into the improvements of this important property," the group wrote. CCIDA awarded $14,240 in sales tax breaks and $3,587 in property tax relief.
Woods at Bear Creek
Jess Anderson and Mike Bysiek of Walsh Huskies in Olean are planning to buy, rehab and relaunch the Woods at Bear Creek campground in the Town of Machias.
The $3.15 million project calls for renovations to the cabins, event center, concert hall, restaurant and RV pads, while adding eight luxury domes for "glamping."
According to the application, the revamped facility will not only support tourism with "world-class camping and hiking" and its restaurant and event center, but will also bring housing opportunities for factory workers – including those at the new Great Lakes Cheese plant.
Located at 3510 Bear Creek Road, near the Bear Creek State Forest, the 733-acre site already includes 24 cabins, a 30-pad RV park and tent camping, a bar and restaurant, a zipline, a pool, tennis courts, a concert hall and a banquet center.
Most of the land – 580 acres – is dedicated to ATV, hiking and horse trails. But it has been closed for more than 3.5 years and is in foreclosure, according to the application.
It is now for sale, so the Anderson and Bysiek – who manage $10 million in assets, including a hotel near Ellicottville – want to buy it, with upgrades to its 61,000 square feet of facility space. The project would retain three jobs while adding 20 full- and part-time employees.
Costs include the $2.13 million purchase price, plus $160,000 for new construction, $400,000 for renovation and $50,000 for infrastructure. The project would be funded with $1.4 million from banks, $1.2 million in equity and a $550,000 local government grant that Anderson and Bysiek are seeking to support the venture.
Walsh Huskies had sought to pay no property taxes for a decade, but town and CCIDA officials refused. CCIDA awarded the project more than $135,000 in subsidies, including $78,295 in property tax relief, $40,000 in sales tax breaks and $17,500 in mortgage-recording tax abatement.
Kless Boys
A used-car dealership and repair business in the Town of Yorkshire is branching into hospitality.
Kless Boys Development, led by Mark Kless, wants to develop a 15,000-square-foot food, retail and entertainment facility in Yorkshire on the same property where the family operates a retro-style full-service gas station at 12248 and 12260 Route 16. That is just north of the intersection with Route 39, or Main Street.
The $6.5 million project would feature a restaurant, convenience store and event space, along with upper-floor dining, and a display area for classic cars, which the family collects. And it is designed to both serve the customers of its adjacent gas station and car sales, while also providing a unique draw for visitors in at least two counties, according to their application to the CCIDA. The developers received more than $1 million in subsidies, including $520,000 in sales tax breaks, $526,921 in property tax savings and $81,250 in mortgage-recording tax relief.
Kless says they need help because of higher interest rates and rising costs for materials and labor.
The 3.4-acre site, which Kless owns, includes vacant land that would be used for the project, as well as additional businesses that are not part of the CCIDA application. Kless has done site and foundation work, and the project would be completed this year. The family expects to create 11 new jobs, paying an average of $33,280 per year, according to the application. The project is expected to finish by yearend 2025.
Kless started as a two-bay repair garage in 1995, but has since expanded significantly, first with a 20,000-square-foot full-service repair center and collision center in Delevan, also on Route 16, and then with the gas station.
– Jonathan D. Epstein
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The Buffalo Next team gives you the big picture on the region’s economic revitalization. Email tips to buffalonext@buffnews.com or reach Buffalo Next Editor David Robinson at 716-849-4435.
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