CITY OF LOCKPORT: City may sell Canal Street block to inLighten

By Joyce Miles<br><a href="mailto:joyce.miles@lockportjournal.com">E-mail Joyce</a>

The Canal Street block may be sold to a Depew business interested in moving its headquarters to Lockport.

InLighten, a global digital media technologies provider, is negotiating with Greater Lockport Development Corp. to buy three agency-held buildings and three blank lots to create a “technology campus” for nearly 100 white-collar employees.

GLDC/City Attorney John J. Ottaviano was authorized Thursday to make a deal with inLighten, whose executives told GLDC board members in a private meeting last week that they’d like to get campus building under way next month.

Bottom line, GLDC is prepared to let the properties go for $100,000, in exchange for inLighten’s commitment to invest $1.5 million in campus development and create 25 new jobs on top of the 70

it would bring from Depew, all within 18 months.

Haggling is expected over GLDC conditions, including its desire to hold the company to a written development timetable. Also, signoffs would be needed from several state regulatory agencies that invested grant money in Canal Street rehabilitation.

Mayor Michael Tucker said he’s cautiously optimistic the sale will materialize.

“It’s very promising. I wouldn’t say it’s done, but I’d be very disappointed if it didn’t happen,” he said.

According to inLighten’s Dave Saleh, vice president/general counsel, discussions remain “preliminary” and the company is looking at relocation options in and outside New York state.

“The company’s continuing rapid growth has generated national interest, as it has become recognized as an emerging technology leader in the exploding and dynamic Digital Signage industry serving clients in all 50 states as well as Canada and abroad,” Saleh said in a written statement Thursday.

Of the GLDC proposal, he added, “There remains significant distance between the parties which would need to be closed before relocation becomes a viable option for inLighten.”

The vote of GLDC board members on the proposed sale terms was unanimous.

The asking price, $100,000 for the largest building, 57 Canal St., plus $1 each for 51 and 79-81 Canal, is far lower than the buildings’ appraised value ($510,000 combined). Three blank parcels between them would be turned over at no charge once inLighten showed proof it had relocated headquarters to Canal Street and met stated job relocation/creation goals.

The low asking price reflects a reality that GLDC has struggled with as it tries marketing the rescued Canal Street properties: Envelope buildings, that is, empty building shells, aren’t worth much. Either the buyer gets them cheap and plows his money into buildout; or the seller pays for buildout and charges a higher sale price. Small business owners who’ve expressed interest in a building typically can’t afford either option, according to GLDC board member Pat Schrader, 4th Ward alderman.

“We’ve had a lot of proposals, like the winery, and they never go anywhere; there are lots of ideas but nobody to invest the money,” he said. “(inLighten’s proposal) saves us looking for a half-million (dollars) or more to build out.”

The Common Council would be asked to approve the sale, possibly as early as next week. GLDC board member John Lombardi III, 5th Ward alderman, doesn’t anticipate any opposition.

“We need to move on that block. We’ve been sitting on it way too long,” he said.

If the sale goes through, a previous offer by the city to help Appleton winemaker Margo Sue Bittner get a grant to open a Niagara Wine Trail-stocked emporium at 79 Canal will be withdrawn, Tucker said.

The city/GLDC acquired nine parcels on Canal Street (formerly Richmond Avenue) in 2001-02, to recover and redevelop a dormant block’s worth of real estate overlooking the Erie Canal. Over a 10-year period, federal, state and local agencies sunk nearly $4.7 million into work to get the block in the shape it’s in now.

GLDC’s plan has always been to encourage retail/commercial and tourism-related enterprises to locate there. The block’s proximity to the canal is the basis for at least $1.7 million in grants awarded by the federal and state governments.

InLighten’s concept proposal to GLDC anticipates the need for a Lockport campus to have some tourism-related elements. It includes suggestions for:

• “Pioneer Cafe” on the 1st floor of 51 Canal St., a self-service cafeteria for employees, guests and city visitors.

• “Canal Way Open Air Mall” in front of the steel gazebo between 57 and 79 Canal, where artisans and vendors could rent kiosks by the season to serve tourists and encourage pedestrian traffic.

• A free summer concert series at the gazebo, with performances by artists such as the Buffalo Philharmonic Orchestra String Quartet and All Hands Jazz Trio.

• A fireworks show from a Canal Street roof top, on Oct. 26, commemorating the anniversary of the Erie Canal’s opening.

InLighten’s business would aid the local economy year-round, Tucker said. Company President Dan Snyder reportedly already has checked out local restaurants and inns personally, to see where visiting inLighten clients might be referred. An executive told Tucker the company’s customers buy an average 1,000 hotel nights per year.

Even if GLDC and inLighten strike a deal for the block, New York state will have a final say in how the city disposes of the parcels because of how much money it has tied up in them.

The Department of Environmental Conservation has easements on the properties ensuring its ability to monitor cleaned up/capped land areas, and it has an indirect say in sale pricing. If the city made a profit off the sale of improved properties, the state would demand some of its money back, Ottaviano said.

Also, the Division of Housing and Community Renewal granted $50,000 for rehab of 51 Canal St., with the condition the second floor be turned over to residential use. A waiver on the condition will be needed.

The gazebo is not among the properties offered for sale in the proposed contract. The company would have the option of buying it separately, for $105,000 payable to New York state, since the item was constructed using grant money.

InLighten projects employment of up to 100 at a new campus, but there are not 100 parking spaces in the paved common area behind the Canal Street buildings. The city is prepared to look at acquiring nearby properties to create another parking lot, Ottaviano said.

“We will do what needs to be done to keep them happy,” he said.

The company also is interested in leasing some space in Harrison Place, for warehousing and possibly some manufacturing, Ottaviano said.

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

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