Competing projects advanced by teams headed by two local business titans raise a key question about how a valuable piece of land near Canalside should be developed.
Should the 1.7-acre Webster Block just north of First Niagara Center be transformed into a complex that might lure a half million visitors to large-scale events, as Buffalo Sabres owner Terry Pegula and his development team have proposed?
Or would the city-owned land be better suited for a facility that provides support services to those who already attend arena and inner harbor events or who work downtown, as Carl P. Paladino's development group envisions?
Pegula and his wife, Kim, are convinced that 500,000 visitors would flock to a $123.2 million Harbor Center, principally to participate in or watch events at two full-size indoor ice rinks. One rink would seat 1,800 spectators and would be marketed as a venue for hockey tournaments and other skating events. The rinks could host youth-focused training camps and provide abundant opportunities for public skating. The Sabres project would include a full-service hotel with up to 200 rooms, a restaurant and sports bar and some retail space. Developers said Tim Hortons and New Era Cap have been among the entities that have expressed early interest in the project. The complex would also include a 965-space parking garage. The seven-story complex would be attached to a tower that could be as high as 16 stories, depending on the final size of the hotel.
"This could be a drawing card for a lot of different people," said Cliff Benson, the Sabres' chief development officer of the mixed-use project. "We could make this a huge destination."
But Paladino, who is leading a competing development team, believes the city should pick a project for the Webster Block that would "supplement and complement existing events," while also helping to promote a "24/7" neighborhood by offering high-end apartments for rent.
Paladino's Webster Block LLC proposes a $64 million complex that includes a 140-room limited-service hotel; 42 apartments - some of which would command monthly rents exceeding $3,000; 110,250 square feet of office space; 8,600 square feet of restaurant and retail space; and 1,089 parking spaces. The 12-story tower would be at the north end of the block fronting Scott Street and would be attached to a six-story section that would include parking and office space.
"We wanted a project that would not be a specific event," said Paladino, who is partnering with Joseph Mosey and Joel Castlevetere on the project. "An event would congest things up on arena [and Canalside event] nights."
Paladino stressed that his proposal would not rely on any subsidy from the city.
However, developers hope to snare $6.5 million in state brownfield credits to remediate the property. Paul M. Gregory, project manager for Webster Block LLC, said the site was once home to an oil-storage facility. While some sources expressed doubts that significant remediation will be needed at the site, both Gregory and Paladino said they believe the Webster Block would qualify for substantial brownfield credits under a state program.
The Sabres proposal to build Harbor Center would seek up to $2 million from the city, but development officials said some of these expenses would be "soft costs." For example, the city would be asked to relocate some utility poles on the land. The Sabres plan would propose paying the city $500,000 for the land that is bordered by Perry, Main, Scott and Washington streets.
Paladino's team is willing to pay $1.5 million for the site, a sum that Gregory said would be much closer to its likely appraised value.
Benson was quick to point out that more than 98 percent of the project's price tag would be privately financed, including a substantial investment from the Pegula family. Benson said the relatively minor investment from the city would foster a "partnership" mentality and would be a small price to pay to create added "excitement and buzz" near Canalside.
Paladino voiced a clashing viewpoint.
"I think it would be highly improper for any developer of that block to ask for special subsidies," Paladino told The Buffalo News in an interview this week.
Applying for state brownfields credits is a different scenario, Paladino asserted, insisting that such incentives are available to all developers who seek to build on eligible sites.
The Paladino project would have 1,089 parking spaces, 841 of which would be public spaces. Gregory insisted that the Sabres proposal would not help to ease the downtown parking crunch, because many of the 965 spaces would be needed to accommodate ice rink attendees.
"It will be another demand-generator that will eat up all their parking," Gregory said.
Benson disagreed, saying rink activities can be scheduled in a way that would still accommodate parking for hundreds of people who work downtown or in the expanding Buffalo Niagara Medical Campus.
"I see an opportunity to maximize parking services in a way that will serve more than 900 people," he said. "It's going to take smart planning."
Another fundamental difference between the two dueling development plans involves office space. The Paladino project would include 110,250 square feet of office space, including one entire floor that would be marketed to a major tenant. The 73,000 square feet on the sixth floor of the complex would offer one of the largest floor plates for an office complex in the downtown business corridor, Gregory said.
The Sabres project would not include any office space, said Benson, and for good reason.
"I'm not sure if we need more office space on the waterfront," Benson said.
While he didn't elaborate, others have raised concerns that downtown's office space vacancy rate could skyrocket in future years if HSBC Bank USA scales back local operations. HSBC occupies the majority of space at One HSBC Center, the downtown tower that bears its name. Two years ago, the bank spurred concerns in the downtown real estate arena when it announced that it was launching a search for new office space in Western New York, because the tower no longer suited it needs.
Gregory said the developer would only include the office space in the new project if it can land a major tenant. He expressed confidence that a tenant from either outside the downtown corridor or an existing downtown tenant could be landed. If the latter occurs, Gregory said, the project would be responsible for retaining jobs downtown.
"We would not build the [office space] on speculation," he said. "If it's determined that there isn't a market, it would be easy enough to eliminate one floor without having any negative impact on the overall project."
The Paladino team also proposes to create a new covered street that would link Washington and Main streets. Gregory said the thoroughfare would provide access to the complex while also creating a unique weather-protected "link" that could be used by pedestrians and motorists.
"It would be well-lit and nicely landscaped," Gregory said. "It would almost become a portal that takes you to historic Canalside."
The Sabres project would be linked to First Niagara Center. Part of the complex would be built over Perry Street, which would remain open to vehicles and pedestrians. However, developers would ask the city to turn Washington Street into a two-lane thoroughfare, with one lane in each direction. The street currently has four lanes of traffic.
Gregory said Webster Block LLC's proposed complex also is being built to accommodate a possible pedestrian link to the arena.
He added that the project's design captures the "fabric" of the neighborhood's historic legacy. For example, he said the complex will bear similarities in both size and design to a series of buildings that stood on the site a century a ago.
Webster Block is working with Charles Gordon Architecture, Concept Construction and Tredo Engineers.The Sabres development team is working with Morton Construction, ICON Venue Group and Populous. The latter firm, formerly known as HOK Sports, designed Coca-Cola Field downtown and some of the most prominent arenas around the world. It was recently hired by the Buffalo Bills to conduct a study of Ralph Wilson Stadium.
Both development teams expressed confidence that they could meet or exceed the city's goals for minority and women-owned business participation in the projects.
Mayor Byron W. Brown said last week that city officials hope to select a plan by Aug. 15, adding that the city is actively seeking community input.
