The owner of Main Place Mall and the Liberty Building is asking the state attorney general's office to investigate the proposed sale of city-owned land for $500,000 less than he was willing to pay.
Patrick Hotung of Main Place-Liberty Group is crying foul over a decision by the Buffalo Urban Renewal Agency to sell 50 Court St. to developer Carl P. Paladino for $700,000. Hotung has offered the city $1.275 million for the land, which is now used as a surface parking lot.
"This is absolutely ridiculous. I put a noncontingent, cash offer on the table that is based on a current appraisal and I'm ignored," Hotung said. "I think this goes beyond bad judgment. I think it's illegal."
Paladino proposes building a $45 million, 11-story office building on the prime downtown real estate, located on Court Street between Pearl and Franklin streets. Hotung wants to construct a $10 million, 600-vehicle parking garage on the site, which is adjacent to his office/retail complex.
Mayor Anthony M. Masiello said he voted to sell the city land to Paladino because of its potential to generate significant property tax revenues.
"That building is going to bring in at least $1.4 million in new tax revenues a year from the day it opens, and that's only going to go up," Masiello said. "Pat's offer would give the city a half million dollars in one-time revenues, so there's really no comparison."
Hotung, who unsuccessfully sued to halt Paladino's project on environmental grounds, acknowledges that a parking garage "isn't as sexy" as a new office tower. But he said the last thing downtown needs is another office building.
"We've got millions of square feet of vacant office space, and this will only create more," he said, acknowledging that his own Main Place Tower has a vacancy rate of more than 50 percent.
"I know I can fill a parking garage. I doubt Carl will be able to fill that office tower," he said.
Masiello also rejected Hotung's contention that there is a shortage of downtown parking, citing the recent expansions of the nearby Augspurger and Adam ramps.
Paladino called Hotung's last-minute bid and request for an investigation a case of "sour grapes."
"He tried to kill this project by tying it up in the courts with a nuisance lawsuit, and this is just more of the same," Paladino said. "This is an exciting project for downtown Buffalo, and we expect it to keep businesses downtown and attract some others in from the suburbs."
Hotung's complaint is the latest salvo in a long-running dispute he has had with Paladino over the property.
In 2004, Hotung was rebuffed by the city in his effort to purchase the parking deck under Main Place Mall. The underground facility is operated by Buffalo Civic Auto Ramps, a nonprofit entity whose board of directors includes Paladino.
Hotung made a case for the parking garage, saying the Main Place ramp has a current waiting list of more than 400, including 80 of his tenants who would like to park where they work. He also noted that if Paladino's building goes up, more than 200 customers of the existing surface lot will be displaced.
Ellicott Development, which has had "designated developer" status for the site for the last several years, originally was to pay the city $483,000 for the land. In late November, Hotung entered the picture with a $1 million cash offer, causing the urban renewal agency to call for updated appraisals. The city received two independent appraisals: $925,000 and $690,000. After review, the agency arrived at the $700,000 figure, with $150,000 of that to be put in escrow to cover any unforeseen environmental problems.
Hotung said he obtained a pair of appraisals of his own, which put the value of the site at $1.2 million and $1.275 million.
Because of the site's proximity to the various downtown courts, Paladino is marketing the proposed office tower as a "lawyers' building." He said he has preliminary commitments from four law firms and interest from others.
Barring further delays, the project is expected to have a groundbreaking in the spring.