Terry and Kim Pegula expanded their real estate and business empire in downtown Buffalo this week, completing the purchase of the former Peerless manufacturing building in the Cobblestone District.
The owners of the Buffalo Sabres and Buffalo Bills paid $7 million through Illinois Perry LLC for the five-story complex at 79 Perry and 55 Illinois streets, according to documents filed with the Erie County Clerk's office. The building was assessed at $255,200, according to city records.
The Pegulas' attorney argues that the purchase price of the building should never have been disclosed. That's because the Pegulas acquired the holding companies that own the building instead of buying the building itself. That way, they wouldn't have to record the purchase price on the deed, as most people who buy homes and buildings do. Those documents, and the price, are public information.
The two properties were owned by the McKendry family, owners of Hi-Temp Fabrication, which currently shares the building with Peerless. The family first sold the properties in three pieces to three new corporate entities that they formed.
The Pegulas then bought control of those new companies in separate transactions this week, gaining the real estate in the process. The three deed filings show the purchase price of the building as $3.
The actual amount the Pegulas paid was disclosed in documents recorded in the Erie County Clerk's office for the transfer tax, which the Pegulas paid in full. The Pegulas' attorney, Terrence Gilbride, said that the Clerk's office erred in releasing that information.
Gilbride claimed the transactions were actually a personal tax matter that is confidential under state law, because the couple essentially bought stock in the three companies rather than actually buying real estate.
Meanwhile, the Pegulas have not said what they plan to do with the building, which is located directly across the street from the parking ramp attached to the KeyBank Center where the Sabres play. The offices of Pegula Sports & Entertainment, which oversees the family’s sports, music and entertainment holdings, are at Ellicott Development’s nearby Creamery Building at 199 Scott St., after moving from One Seneca Tower.
"Development of the property is currently in the early planning stages, as PSE determines how it can best contribute to the future growth of the Canalside and Cobblestone districts," the company said in an emailed statement.
The 79,030-square-foot building is located next to Samuel J. Savarino’s converted Buffalo Iron Works and 95 Perry buildings, and across Perry from the HSBC Atrium and its fenced-in parking lot. With the fading white paint on its unimproved facade, it’s one of the few buildings in that area that hasn’t gone through renovations or been redeveloped.
The century-old building was constructed in 1914 for Peerless Mill Supply Co., which still operates there as Peerless Inc. Both Peerless and Hi-Temp are expected to move following the building sale.
"We're always excited to see the Pegulas make investments in Buffalo and in Western New York," said Howard Zemsky, CEO of Empire State Development Corp. and chairman of the Erie County Stadium Corp. "Of course, their interest is in more than the Bills. It's in the Sabres, it's the hospitality business, and it's in downtown and it's in all of Western New York."