Paetec To Build 500,000-SF HQ

ROCHESTER-Thanks to what could be about $50 million in state incentives, Fairport, NY-based Paetec will build a massive new corporate headquarters facility in the Downtown district here. Gov. Eliot Spitzer announced the new headquarters project at a press conference here on Tuesday detailing his “City by City” upstate redevelopment agenda. The Spitzer plan calls for the state to pay approximately $50 million to demolish the current Midtown Plaza complex and make it “shovel ready” for the Paetec development as well as for a second phase that calls for residential and commercial development.

Paetec’s Chris Muller says the state incentives were necessary since the Midtown Plaza development, built in the 1960s, is mostly vacant and is contaminated with asbestos. The City of Rochester will be responsible for acquiring the Midtown Plaza site from its private owners.

The existing Midtown Plaza complex includes a 17-story office building and five other buildings containing approximately 1.5 million sf of retail and office space. An existing 1,843-space parking garage will be retained, Muller says.

Paetec will eventually consolidate four existing facilities in the area into its new headquarters facility, including its current headquarters at 100 Willowbrook Office Park, an office at 295 Woodcliff Dr. in Fairport as well as approximately 25,000 sf of space it intends to occupy at 600 Willowbrook Office Park later this year to accommodate its growth. In short order, Paetec will also have a location in East Rochester in connection with its recently announced $25-million all-cash acquisition of Allworx Corp., a phone and telecommunications network systems provider. That East Rochester location will also be housed in its new corporate headquarters in Downtown Rochester, Muller notes. The new headquarters will be home to approximately 1,000 Paetec workers. Its current headquarters facility in Fairport totals nearly 100,000 sf and is occupied by some 600 employees.

Muller says a design of the new facility has not been finalized. Initial designs call for either a 15-story “fat” building or a 35-story “skinny” facility. If the latter were to be built, it would be the tallest building in the City of Rochester, he says. No firm construction cost estimates are available. The company hopes to begin construction in 2009 and occupy the property in 2011.

Commenting on its new headquarters plan, Paetec chairman and CEO Arunas Chesonis says, “this agreement demonstrates a fruitful spirit of cooperation between Rochester’s business community and our local and state governments. We’re excited about this strategic site to locate Paetec’s new world headquarters and all the benefits that a revitalized Downtown Rochester has to offer.”

The redevelopment plan for the Midtown Plaza is subject to state legislative approval. Spitzer says the state, the City of Rochester and Paetec and other parties to the memorandum of understanding will work together in the coming months to develop an overall site and use plan for the project and a community participation plan prior to finalizing the formal development agreement.

Other projects that are part of the governor’s redevelopment of the Finger Lakes region include a $3-million state investment to support the development of the Genesee Oatka Ag Manufacturing Park, a more than 200-acre food processing and agricultural manufacturing industrial park, adjacent to the Oatka Milk Products Facility in Batavia in Genesee County. The $9-million project is expected to generate up to one million sf of food processing, research and development and warehouse/distribution space. The Genesee County Economic Development Corp. currently has several prospects for the proposed park, which is expected to be completed by late 2008, state officials say.

The state will provide $1 million in financing to support the Cornell Agriculture and Food Technology Park Project in Ontario County in connection with the expansion of the park to accommodate additional research and development facilities, by meeting an immediate need to loop water service throughout the park and construct a second flex tech building on the property. The project is expected to be completed in late 2008.

The governor also indicted that state will provide $750,000 for a new organic produce center at the Finger Lakes Viticulture and Organic Market Center in Yates County. Additionally, the Yates County IDA will evaluate the opportunity for development of a joint grape crushing incubator facility to be utilized by various wineries in the region.