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HSBC drops plan for Cambria center Site owner says bank's option to buy site for $1 billion project was not renewed

If HSBC Bank goes ahead with its nearly $1 billion computer center, it apparently won't be at the site previously announced, in a farm field at Lockport and Comstock roads.

Donald D. Walck, the property owner, said this week that HSBC did not renew its purchase option on his land when it expired earlier this month.

Robert M. Pusateri, Walck's attorney, said he was contacted by a Rochester attorney representing HSBC. "She said the deal is off. No reason," Pusateri said.

Pusateri said Harter Secrest & Emery, the Rochester law firm, sent him releases to file, canceling the purchase option and the deposit its client put down.

"There is no contract anymore," he said.

The Niagara County Industrial Development Agency granted the data center a 15-year property tax break in March, and also approved an exemption on sales tax for building materials and computer equipment to be used in the building.

The bank's application said the project was to create 56 high-paying technical jobs, along with 350 construction jobs and 125 jobs at companies supplying HSBC.

The building was to cover 200,000 square feet and be surrounded by a 75,000-square-foot fenced-in equipment yard. The building itself was to cost $70 million to construct, but the original computer equipment was to be worth $35 million and be enhanced by $55 million annual investments thereafter.

At its normal fee rate of 1.25 of a project's value, the IDA would have scored a fee of some $12 million.

Cathy Kamen Ryan, the Rochester attorney Pusateri dealt with, wouldn't comment on the cancellation of the option. The bank was to have bought 51 acres of land with an option to buy 26 more acres later.

Pusateri said, "From a legal point of view, we never knew who the client was. We found out by reading the newspapers."

Francine Minadeo, HSBC's public affairs manager in New York City, issued the following statement:

"Given the current overall business climate, we are not proceeding at the original development pace we had planned for our data center in Niagara County, New York. We remain in the planning phase and will take appropriate steps to update local officials and surrounding communities as is necessary and appropriate."

Cambria Supervisor Wright H. Ellis speculated about the cancellation of the purchase option. "I guess that whole subprime mortgage thing is a part of that," he said.

Minadeo wouldn't say if the current subprime mortgage crisis, which has hit many big banks hard, is a reason for the Cambria project being, at the very least, delayed. She declined to elaborate on the original statement when asked about the cancellation of the option.

Samuel M. Ferraro, IDA executive director, said he's heard no inkling of another site.

"This is an extremely large project, and the staff is in constant contact with HSBC. All indications are that they're going to move forward with the project in Niagara County. If there's a problem that's site-specific, that's not necessarily something they would share with us," Ferraro said.

But he added that if HSBC seeks to build on another site in Niagara County, the previous approvals from the IDA would be void and the board would have to take up the project again.

Ferraro said the version he heard was that HSBC was concentrating on completing a data center project in Amherst before turning its attention to Cambria. He said he was told the bank would be completing the Amherst project by the end of this year.

Ellis said he was told the bank would devote the first half of 2008 to equipping its Amherst site with new computer gear, and nothing was going to happen in Cambria until mid-2008. He said the bank never submitted any plans to the town Planning Board, although its attorneys and engineers did contact him last spring to ask about infrastructure at the site.


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