Niagara Gazette

Local News

February 27, 2013

Town of Niagara IDA agrees to tax deal for $71M add-on to the Fashion Outlets

(Continued)

Niagara Gazette — "The competition that is popping up in Canada is very concerning to us," Morrow said. 

Town Supervisor Steve Richards said the expansion project's estimated $70 million price tag does not include improvements to be made to the interior of the additional retail space, which he said could add as much as $18 million more to the overall value. 

"For us, this is probably the biggest private investment in the town in its history," Richards said. 

The mall's owners are seeking a 15-year PILOT agreement. If approved, the owners would enjoy a reduced property tax rate on the value of the addition as well as sales tax exemptions on certain purchases tied to the construction project. 

Richards and Morrow said Macerich also has been in talks about other incentives that may be available through the state-run Empire State Development Corp., although Morrow said a deal with the state has not yet been finalized. 

Town of Niagara IDA attorney Mark Gabriele said under the proposed PILOT agreement the company would pay a graduated property tax rate, starting out in the first few years at 20 percent of the assessed value of the addition and increasing to 50 percent by the end of the term. The existing mall structure also remains under a 15-year PILOT, which IDA officials said has roughly 12 years remaining. 

In exchange for the tax breaks, Morrow said his firm is offering not only an expanded and more appealing outlet center, but new jobs - both construction-related and permanent - as well as continued and enhanced sales tax revenues. 

Macerich estimates that the proposed expansion, including construction and full- and part-time jobs at the outlet center - will lead to the creation of 925 positions, both direct and indirect. The company estimates that the project will result in roughly $16 million in additional sales as well, including $4 million in new revenue from Canadian shoppers and $12 million in local spending outside the mall on things like hotel stays and restaurant visits. 

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