Plans for a Seneca Nation casino in Buffalo may ultimately increase some downtown property values, but the real estate action will be slow until details evolve, several commercial real estate brokers said.
James R. Militello, one of downtown Buffalo's most active brokers, said he does not expect to see investors rushing to buy purchase options on property near the Statler, which has been rumored as a potential casino site.
"Nobody knows specifically what this is yet, or where it is," said Militello, who operates J.R. Militello Realty.
The Seneca Nation and the New York State Assembly still need to approve the two casinos, one in Niagara Falls and one in downtown Buffalo, recently negotiated with New York Gov. George E. Pataki.
Niagara Falls plans call for a temporary casino in the Niagara Falls Convention Center while a new site is developed. A site in downtown Buffalo has yet to be identified.
Militello said once the Senecas specify a Buffalo site, neighboring property values should increase dramatically. A new casino could generate demand for parking, restaurants and other ancillary services.
Robert Schell, president of Pyramid Brokerage Company of Buffalo, thinks the cost of land near the Statler has already been boosted.
"I think it will have an immediate impact on the property values near any of the rumored locations. The price of poker goes up," said Schell.
He expects investors to begin picking up options on property near the Statler. An option involves the purchaser paying for the right to acquire a piece of land during a set option period for an agreed price.
Carl Paladino, who owns a small, multitenant office building at the corner of Mohawk and Franklin streets, said he sees no immediate impact of the value of his property.
"We're a town of fantasy announcements. We've lived with fantasy announcements for years and, as a result, we don't act quickly anymore," Paladino said.
But one commercial real estate broker has seen palpable reaction to a potential downtown casino. George Hamberger, of Hunt Commercial Real Estate, said he's received an inordinate number of calls about the vacant Taylors building, the former Adam, Meldrum and Anderson Co. flagship store, at 389 Main St., in the wake of the casino announcement.
"I sent out three information packets today," Hamberger said. "This is all new interest and the only thing that's changed is word of the casino."
The partners in Lawley Service, Buffalo's largest insurance agency, own the company's 90,000-square-foot office building sitting directly across Delaware Avenue from the Statler.
Christopher Ross, a partner in the firm, said he has been contacted several times in the last three years about the building at 120 Delaware Ave.
"We've had inquiries from people over the last two or three years. We've heard a lot of talk about a possible casino over the last three years, it comes and it goes," Ross said.
He said the firm did not receive any calls about the building following last Wednesday's announcement by Pataki.
"I guess we would be open-minded if the right opportunity presented itself. But we're not sticking a 'For Sale' sign on the window, because we like it here," Ross said.
The Statler sits in the cradle of the city's government office market, which ties up much of the adjacent property. Three federal office buildings, including a Federal Reserve bank branch, cement the north side of Delaware Ave., between Mohawk and Chippewa streets.
A large entertainment complex in the commercial business district could vastly change the traffic and parking patterns.
Jeff LiPuma, managing broker for CB-Richard Ellis in Buffalo, said a casino's ultimate impact on downtown property will be based on how well those issues are addressed.
"The potential for negative impact on the downtown office market is certainly there if this isn't planned right," LiPuma said. "If the casino is developed in a coordinated plan for downtown, then it will have a positive impact on property values."