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Ellicott Development buys Chicago Street industrial building

Eighteen months after buying the first half of the building, William Paladino's Ellicott Development Co. has completed its acquisition of the Kellner Bros. complex on Chicago Street, adding another property to its holdings near the Fairmont Creamery and the Cobblestone District.

Ellicott, through 1238 Group, paid $1.216 million to buy the second half of the 43,000-square-foot facility at 222 Chicago from the Kellner family's 222 Chicago St., according to deeds filed with the Erie County Clerk's office. That follows its earlier purchase of part of the property for $1.325 million in October 2016.

The developer said he doesn't have any plans for the property yet but is "just land-banking it for now." Eventually, though, he said it's likely to be a mixed-use project with residential space, including some historic tax credits.

The purchase was part of a tax-free exchange of real estate, designed to minimize the tax impact by selling and buying properties of similar value. Paladino noted that it's near the Fairmont Creamery building and other real estate holdings that Ellicott owns, creating some potential for cross-benefit.

Paladino said the purchase was handled in two parts because the Kellners had to figure out some separate tax issues before the transaction could be completed. "He had to work out some issues on his end with the estate, before I could buy the rest of the building," Paladino said.

Constructed in 1924 for Deck Bros. Inc. and acquired by precision machining firm Kellner in 2000, the brick industrial building is located on a corner parcel, with sections ranging in height from one to three stories. Most of the building has its windows boarded up. The building at one point also housed Quality Grinding, but Kellner is currently the sole tenant, Paladino said.

Paladino said Kellner is now expected to move elsewhere.

Separately, Ellicott affiliate 8112 Group appeared to sell properties at 323-339 Ganson St. in Buffalo, 4100 St. Francis Drive in Hamburg and 207 W. Huron St. in Buffalo to three other limited-liability companies that Ellicott also controls, but Paladino said those were strictly paper deals between its own entities for tax purposes. The total value of those transactions was listed as $824,690, according to the deeds.

 

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