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Last waterfront parcel sold, so what happens to Outer Harbor?

For generations, the people who run the region’s buses, trains and airports have sought to end their role as developers of Buffalo’s vast Outer Harbor.

Now the final steps are being taken to relieve the Niagara Frontier Transportation Authority of its waterfront duties. The authority approved transfer on Thursday of its last 50 acres at its Port Terminal Complex to another state agency: Erie Canal Harbor Development Corp.

New York State is looking to take over the job that the NFTA could never finish, aiming to guide the former Port of Buffalo from an industrial past into its housing and recreational vision for the future.

It will all become official in the next few weeks when the harbor agency’s parent – Empire State Development – approves a $3.5 million payment in periodic installments to the NFTA.

“Our goal is to make it a water-centric development that isn’t industrial, but is consistent with the goal of an active and improved Buffalo waterfront,” said Sam Hoyt, regional president of Empire State Development.

As recently as late 2014, the NFTA planned to continue manufacturing at the former Port of Buffalo when it signed up a Toronto outdoor furniture manufacturer in a state-aided venture that would have created 250 jobs. But that $4.7 million property sale fell through, as did a host of other ventures at the site, and the NFTA has since been saddled with a giant albatross that could attract only a few boat storage firms.

NFTA Executive Director Kimberly A. Minkel said Thursday’s vote by the board of commissioners marks a “historic day” as the authority focuses on its “core mission of providing safe and reliable transportation.”

“It was a distraction to the authority,” she said. “We’re not developers. But for Erie Canal, this is what they do. So it’s in the public interest.”

While the NFTA transferred other parts of the Outer Harbor to Empire State Development in the past, and in 2014 sold 384 acres of its Small Boat Harbor and Gallagher Beach properties to the state parks system for $2, this transaction proved far more expensive.

NFTA officials say they sought the hefty sum plus relief from any environmental-contamination responsibilities at the site after maintaining the cavernous buildings known as Terminals A and B since its predecessor agency – the Niagara Frontier Port Authority – took over the Port of Buffalo in 1957. Indeed, the buildings boast attractive features such as 400,000 square feet of warehouse and office space, high bay doors, rail and water access, and parking for 500 vehicles.

The complex dates from the 1930s, when it was the site of a Ford Motor Co. plant and then oceangoing ships that called at the Port of Buffalo. Other companies also called the complex home over the years, but the NFTA never scored a lasting tenant despite all that it offered.

Authority officials say developer Gerald A. Buchheit has made inquiries into Terminals A and B in conjunction with his $40 million plan to build 120 waterfront apartments in the adjacent former Freezer Queen plant. Buchheit did not return a phone call seeking comment.

But developer Carl P. Paladino on Thursday questioned whether any market exists for the state plans. Often critical of Gov. Andrew M. Cuomo’s administration after his own unsuccessful run for governor in 2010, Paladino said he sees little potential beyond its traditional uses.

“It’s still a perfect transshipment point,” he said. “But any other use? I can’t imagine what it would be.”

Paladino dismissed what he called a popular assumption that Buffalo is experiencing a renaissance, indicating that he is not seeing it from his perspective as a developer, except for some rentals and projects aided by government money.

“It’s not as bullish as some people think,” Paladino said. “The banks certainly don’t look at this as a big growth area.”

Still, Hoyt said the state remains optimistic for the property, even if it does not expect much beyond boat storage and other marine-related small businesses for the immediate future.

“If Jerry Buchheit and his team go forward with their exciting plan,” Hoyt said, “it will be a much more desirable asset than it was just two short years ago.”

Hoyt said state planners would reject any proposals for a chemical plant, for example, but entertain ideas for housing, entertainment or a “watercentric focus.”

“We’ll try to get a sense from the developer world about what they would be interested in out there,” Hoyt said.

He also said that while the last transfer from the NFTA to the state involved virtually no payment, the authority board “felt strongly that there should be compensation for those two massive structures.” And Minkel emphasized that the NFTA has taken a host of steps to prepare for new owners on the waterfront.

“While the authority can be criticized for being not the best steward of this property (in the past),” she said, “in recent years, we have started to get ready for the next step of development.”

Hoyt said the state will ensure access to the water in whatever plan is adopted, adding that the Rich Products subsidiary that recently signed up to manage some Outer Harbor activities for Empire State Development may be interested in running various festivals on the property.

email: rmccarthy@buffnews.com