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CITY URGED TO DESIGNATE PALADINO DEVELOPER FOR BERGER PROJECT

A task force steering efforts to transform the former L.L. Berger Building into apartments and retail space is urging the city to designate a prominent downtown businessman as project developer.

The panel met Monday with officials from Ellicott Development Co. to discuss its $3.5 million plan to convert the complex into 36 apartments and 5,500 square feet of retail space. Members are recommending that the Buffalo Urban Renewal Agency give the company four months to refine and finalize its plan. Ellicott Development is headed by Carl Paladino.

But Common Council President James W. Pitts said Monday that he has doubts about the feasibility of converting the long-vacant store into apartments. He called on the city to focus its residential efforts in other areas, including the 700 block of Main Street near Edward Street and on the Lower West Side.

Pitts said his concern is based on a decision by a Cleveland developer to abandon renovation plans at the Berger site. While officials from Landmark Management Ltd. did not return phone calls Monday, city planners said the costs associated with the $6.5 million project would have been too high. The developer wanted up to $3.5 million in subsidies to convert the complex into 120 upscale apartments.

"Landmark is the premier developer of its type and if they pulled out of this project, it raises the question of whether the Berger's site is feasible for residential development in the first place," said Pitts.

He denied that his concerns about the Berger conversion have anything to do with long-festering tensions that exist between him and Paladino, who was a major campaign contributor to David A. Franczyk in his unsuccessful bid to defeat Pitts in last week's Democratic primary for Council President.

"I'm just not sure that we should be putting housing in what could be and should be our retail district," Pitts said.

Community Development Commissioner Joseph Ryan said he remains confident that the Berger project can be done by Ellicott Development. But he said he agrees with Pitts that the city should work to advance residential projects in other areas of downtown.

Paul M. Gregory, a spokesman for Ellicott Development, said if the Buffalo Urban Renewal Agency approves the designation at Thursday's meeting, the company will prepare updated plans and cost estimates.

"We think its a doable project, although we want an opportunity to refine figures that were put together a year-and-a-half ago," said Gregory. "We want to see downtown move forward, and this is one way to accomplish it."

About 18 months ago, city planners launched a major campaign to find developers interested in transforming the empty Berger site into a mix of apartments, stores and office suites. They advertised in Western New York, Cleveland, Pittsburgh, Albany and other regions before received three proposed plans.

The proposal from Landmark Management Ltd. was picked over plans submitted by Ellicott Development and another local company based on what city officials described as Landmark's laudable track record in transforming five vacant buildings in Cleveland into residential complexes.

Word leaked this summer that Landmark was having a difficult time making the numbers work on the Berger project. Nevertheless, Masiello administration officials -- including Peter Cutler, the mayor's top spokesman, insisted that the project was "very much alive" when asked in July about the reported problems.

Two weeks ago, city officials confirmed what had been rumored for two months: Landmark had abandoned its $6.5 million plan to convert the Berger site and possibly the adjacent Gamler Building into a mixed-use complex.

The Berger property has been dormant since 1991, when the high-fashion women's apparel chain closed after 85 years. Up until last year, the main focus of city planners has been on replacing the loss of retailing.

Some downtown business leaders said Monday they remain confident that the Berger's site is a suitable location for a major residential initiative, including banking executive Keith M. Belanger, who sits on the Berger's task force. Belanger, an administrative vice president at M&T Bank, said that because the proposal by Ellicott Development is more limited, it will likely be more feasible to implement.

"They won't be taking on the entire block as Landmark proposed to do," said Belanger.

Stuart Alexander, an urban planning consultant who sits on the task force, agreed that the scaled-down scope of the project enhances its feasibility, noting that initial plans do not require public subsidies.

"We believe there is a market for downtown housing and we think smaller projects have a more reasonable chance for success, at least at this point," Alexander said.

Task force officials are cognizant of the fact that interest rates have increased and other costs may have gone up since Ellicott Development's initial proposal was drafted in the spring of 1998. But Ryan and Belanger said they remain cautiously optimistic that when the numbers are updated, the project will remain feasible.

"If the city doesn't do something with this site pretty soon," said Belanger,"there might not be anything left."

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