City of Rochester
Governor Cuomo, Senator Schumer Help Fast Track Windstream Deal
(Monday, Nov. 14, 2011) – Rochester Mayor Thomas S. Richards today announced the details of a long term lease agreement with Windstream Corporation that will see the company bring hundreds of employees to the Midtown Project site and create approximately 200 construction jobs. The existing structure of the former Seneca Building will be reused, developed and owned by the Pike Development Company.
“I would first like to welcome CEO Jeffrey Gardner and Windstream to Rochester. This long term investment in our city by Windstream demonstrates the company’s commitment to downtown, to our community and most importantly to the hundreds of PAETEC employees whose jobs will be retained in our area,” said Mayor Richards. “I must acknowledge the hard work of our Governor, Andrew Cuomo and our Senator, Chuck Schumer. Without their support and help, this deal would simply not have been possible in this short time frame.”
“This is game-changing news for the local economy and the city of Rochester,” said Senator Charles Schumer. “This decision means that Rochester is going to be a big part of Windstream’s future, and Windstream is going to be a big part of Rochester’s downtown revitalization. When the PAETEC deal was announced, Mayor Richards and I focused in like a laser on the three things that mattered most – jobs, jobs, and jobs. I’m thrilled that Windstream is going to move into the Midtown site, and that this lease means they’re here to stay. When it comes to the local workforce and its new downtown neighbors, I can promise Windstream this – you won’t be disappointed.”
Governor Andrew M. Cuomo said, “Creating and keeping jobs in New York State has been my top priority, and I am pleased that my administration could play a central role in Windstream Corporation’s decision to invest in our state and retain hundreds of jobs here in Rochester. New York’s workforce is second-to-none and in these difficult economic times we must do all we can to make sure businesses have the resources they need to be successful in our state. This new investment in Rochester clearly demonstrates that New York is once again open for business and I thank our federal, state, and local partners, particularly Mayor Richards, for assisting on this important project."
Under the terms of the deal, Windstream will sign a 15-year lease agreement for a downtown office that will have the capacity for up to 335 employees. The Windstream office will be located in what was formerly known as the Seneca Building. The shell of that building was preserved during the demolition at the Midtown Plaza site to accommodate PAETEC’s plan to locate its headquarters in Rochester. Occupancy will take place no later than July 31, 2013. Construction must begin next spring to meet this schedule.
The parcel will be developed by The Pike Development Company of Rochester, NY. Pike had been previously designated by PAETEC to provide construction services. The Company has intimate knowledge of the site and the ability to meet the tight construction deadlines required by the agreement. Pike will develop two floors of the building for Windstream and the third floor will be available for another tenant.
The agreement with Windstream includes a tax abatement plan and a provision for the use of up to 335 parking passes at the Midtown garage at a cost of $50 per pass. The agreement is a public document and copies will be made available. Under the agreement Windstream will be required to lease 67,000 square feet at $17.25 per square foot, which includes $3.00 per square foot for property taxes. To ensure the development of the project, the City has further agreed to provide financing for the project, including:
- A $5 million Community Development Block Grant loan at 1 percent interest for 15 years. The previous commitment to PAETEC was for a $16.5 million, CDBG Section 108 Loan and $8.2 million in CDBG grants.
- Maintain the City’s previous commitment to PAETEC for a grant from the City in the amount of $1.7 million. These funds will create a public entrance to the building and a link to the Midtown garage. The previous arrangement with PAETEC did not provide such access for the public.
- Maintain the previous award of $1.2 million from Empire State Development through the Blueprint NY program for the project.
The Midtown Development Project was announced in 2007. The State of New York provided a $55 million grant to assist with the demolition of six buildings covering approximately eight acres. Demolition work is nearly complete. The next steps in the redevelopment process include the completion of underground tunnels and the rehabilitation of an 1800-vehicle underground garage and the development of the new street grid. This work will also begin in 2012.
The Windstream project will be the first new project developed in the revitalized Midtown site and will serve as the catalyst for future development. This project, together with the tunnel, garage and site development will generate significant construction work in the coming years.
The agreement is contingent upon regulatory approvals by the Federal Communications Commission and the Public Service Commission in November. The City will withdraw its previously filed objections with the FCC and PSC and request approval of the merger. The agreement also requires approval by City Council.
Read Windstream's news release on the agreement.
News media: For more information, contact Gary Walker at 428-7405.