TOWN OF LOCKPORT: Yahoo! files Lockport site plan

Business

June 11, 2009

Town woos data management giant with offer of a 20-year tax break

By Joyce Miles <a href="mailto:joyce.miles@lockportjournal.com">E-mail Joyce</a> The Lockport Union-Sun %26 Journal Thu Jun 11, 2009, 10:15 PM EDT

TOWN OF LOCKPORT — Yahoo! is taking steps to build a regional data center in the town’s Industrial Park.

Town officials disclosed Thursday that the Internet data-management giant has applied for site plan approval on a 190,000-square-foot data center in the park. The company is negotiating the purchase of a 30-acre parcel.

Data center siting, dubbed “Project Pilgrim,” still has to be approved by the Yahoo! board of directors, town Supervisor Marc Smith cautioned.

“This deal is by no means final. They still could go somewhere else,” he said. “Until the deal is finalized, we will take nothing for granted.”

The towns of Lockport and Cambria emerged last month as two of Yahoo!’s top three sites in New York under consideration for hosting its planned East Coast Regional Data Center. The towns were named when New York Power Authority approved a low-cost power allocation of up to 15 megawatts for the company if it agreed to site the center in New York state.

Yahoo!’s data center proposal calls for creation of 125 high-tech jobs in fields including electrical engineering, at average pay of $65,000 per year. It’s aiming to begin construction in August and wrap up in time for a January 2011 opening.

Town officials have been working behind the scenes since March to lure Yahoo! to the Industrial Park.

Its offering includes the 30-acre, totally shovel-ready lot in the southerly portion of the park, at Junction Road and Enterprise Drive; and a deviated Payment in Lieu of Taxes agreement that, according to Economic Development Director David Kinyon, keeps the town competitive with other wooing municipalities in and out of New York.

The proposed PILOT terms include: A 20-year tax break that would have Yahoo! pay no property taxes for the first 10 years, then pay 20 percent more every two years after that; the standard mortgage tax exemption; and sales tax exemption on all equipment purchases, not just construction-related purchases as is the case with standard PILOT agreements.

Kinyon said the sales tax break is significant to Yahoo! since it replaces data processors routinely; a number of hopeful host communities offered the incentive, he added.

“We’re moving on a very aggressive timetable to keep up with (municipal) competitors and meet Yahoo!’s expectations,” Kinyon said. A number of state agencies, and New York State Electric & Gas, played a role in shaping Lockport’s package, he added.

“Everyone involved in this is elated. We have a great opportunity,” he said.

The planning board and Lockport Industrial Development Agency already have public hearings slated for the Yahoo! site plan and proposed PILOT agreement. The site plan hearing will be held at 4 p.m. June 30, and the PILOT hearing will be held June 30 or July 1, according to Town Attorney Daniel E. Seaman.

Those hearings were set in closed sessions of the planning board and LIDA’s board of directors the past few days. Executive sessions of the planning board are very rare.

Smith announced the site plan late Thursday only after obtaining consent from Yahoo! As town officials worked their end of the deal, he said, they’d been sworn to silence by the company under threat of loose lips sinking the proposal.

When those closed meetings were held Wednesday afternoon and Thursday morning, officials quizzed by the press about the subject matter referred only to Project Pilgrim —and described it only as a potentially significant economic development deal in the making.

Kinyon had been required to sign a written confidentiality agreement, Smith added.

The silence was broken Thursday afternoon when Smith faxed written notice of the upcoming public hearing on the site plan. Seaman said he and Smith appealed to Yahoo! to let them confirm the plan’ existence now, since it has to be unveiled at the board’s regularly scheduled monthly business meeting June 17 in order to keep up with Yahoo!’s siting timetable.

“It’s at the point of development where it’ll be in the public realm shortly, as it should be ... . After all the hard work that’s gone into this, it wouldn’t serve Yahoo! or the town” for the site plan unveiling to appear like a surprise sprung on an unsuspecting public, Seaman said.

“We’ve been nearly bursting at the seams trying to (balance) our excitement about this with Yahoo!’s demand for absolute discretion,” Smith added. “It’s still all really preliminary, but ... today is a great day for Lockport and the entire county, I think. We just kind of want to stand up and shout, ‘Yahoo!’ ”

The Yahoo! board of directors is expected to vote up-or-down approval of a Lockport-based data center within a few weeks after the town issues final approvals of the site plan and PILOT agreement, according to Smith.

Sunnyvale, Calif.-based Yahoo! spokeswoman Kim Ruby declined to confirm any details of the company’s dealings with the Town of Lockport. The company doesn’t comment on negotiations with communities anywhere, she said. Ruby did, however, reiterate Smith’s stance that a Yahoo! Regional Data Center isn’t a done deal anywhere.

“We are still evaluating all of our options and we haven’t made any determinations,” she said.

Contact reporter Joyce Miles at 439-9222, ext. 6245.

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