City ready to move quickly on Batavia Downs hotel project

Feb 27, 2015

The city is ready, willing and able to help get construction started quickly on a new, five-story, 80- to 100-room hotel at Batavia Downs, said City Manager Jason Molino.

While developers and Western OTB officials have yet to agree on the precise location of the hotel, COO Mike Nolan said this morning the most likely spot is overlooking the southwest turn of the track, adjacent the grandstands, near the Tops Plaza.

That location is within the boundaries of the City of Batavia, meaning it will be the city's zoning and planning boards that will be called on for plan, design and environmental reviews.

"Being able to get this project reviewed and in front of all the proper boards is something we're committed to," Molino said. "We will make every effort, including holding special meetings, to move this along as swiftly and as smoothly as we can to meet the goals of the developers. I don't think this is a concern for us. We've worked with these size projects before and we can get it through smoothly."

Nolan said the developers, a Buffalo-based group that will purchase the property for the hotel from Western OTB, would like to break ground in 60 days and have the hotel open within nine months.

"The best part of this story is that back in 1998, when Western OTB bought Batavia Downs, it took $3 million (in assessed value) off the tax rolls," Nolan said. "Now, in 2015, $7 million plus is going back on the tax rolls for a facility that was closed and drawing nothing but cobwebs."

The increase in tax revenue won't hit local governments all at once, since the developers are likely to seek tax abatements from GCEDC, but the exact structure of tax relief won't be clear until applications are made and abatements are approved.

Typically, tax abatements from GCEDC include relief on sales tax for construction material and furnishing, mortgage tax and a PILOT, which graduates the amount of property tax paid over a 10-year time frame, until the property owner is paying 100 percent of the taxes on the fully assessed value.

State law prohibits industrial development agencies from providing tax assistance to retail projects, unless they qualify as tourist destinations or are intended to attract visitors from outside the area.

Projects that are with economically distressed areas, or adjacent to such areas, are also exempt from the law.

Julie Pacatte, coordinator for the Batavia Development Corp., said one advantage Batavia Downs can realize by building the hotel on property within city limits (Batavia Downs straddles the City/Town line) is the census track is adjacent to a census track that includes Downtown Batavia, which qualifies as an economically distressed area.

"We're thrilled at the idea of having a distinctive hotel within the city," Pacatte said. "What they're planning, where you arrive in a very Vegas-style, shared lobby area, where you can check into the hotel and stay within the facility throughout your weekend, and being on the track, overlooking the last turn from a balcony, is pretty exciting."

Because the hotel won't offer other amenities, but is geared entirely toward the visitor looking for casino and harness racing entertainment, the folks at Western OTB don't believe it will compete with existing hotels, Nolan said.

"With this becoming a more competitive casino market in Upstate New York, we felt we needed to step up," Nolan said. "There's a casino coming to Seneca County, and the Seneca's already have casinos at their Niagara and Salamanca properties, in this new and up and coming casino market the way it is, we needed to offer some hospitality for our casino customers."

The other advantage the city offers a water-hungry facility like a hotel is lower water rates. Rates in the city are $3.14 per thousand gallons of water compared to $5.46 in the town.

The developers are negotiating with a couple of different hotel chains, so it's possible the new hotel will be operated under the banner of a Hilton Garden Inn or a Court Yard Marriott, or some other banner.

Batavia Downs is just wrapping up a $28 million remodeling and expansion effort and th hotel will complement that growth, Nolan said.

"We have a tremendous opportunity for convention type of events and banquet type of events that require lodging," Nolan said.

The hotel, Molino said, will certainly be a boost to the local economy, bringing in more visitors, creating jobs and spurring other types of economic growth.

"This is a great opportunity and a great project," Molino said. "Everybody in my office, with the BDC and in planning are excited to work with the developers. We're going to do everything in our power to make sure it moves as quickly as it can and move as promptly as possible. That would be a win-win for everybody involved."