The Buffalo Urban Renewal Agency Thursday gave unanimous approval to a revised contract with developer Carl Paladino to construct an 11-story office tower at 50 Court St. in downtown Buffalo.
The revised land disposition agreement will see Paladino's 1097 Group LLC pay $700,000 for the city-owned property and agree to meeting a series of development deadlines or face penalties.
Mayor Byron W. Brown said the sale agreement, the first to include post-sale requirements, establishes a "new model" for downtown projects where city-owned land is involved.
"This establishes a model that we're going to take to other downtown projects," Brown said, noting how the city will be able to track progress on the $45 million project through a series in interim deadlines.
"This is a great project for downtown Buffalo. It's a downtown project that has value. It's a downtown project that is significant," the mayor added.
Under the agreement, which will go to the Buffalo Common Council Tuesday for final approval, Paladino has until September to submit construction plans to the city. The developer is required to apply for a building permit and submit details of project financing by November.
Construction is to be completed within 24 months of taking title to the site.
Penalties include $10,000 per month fees for delays and potential forfeiture of the property for failure to meet performance standards.
Paladino said he does not anticipate any problems making the deadlines. He plans to begin construction next spring and have the 335,000-square-foot office tower ready for occupancy in spring 2008.
"We are happy to move forward with a downtown project that will compete well with suburban office development that offer tenants large floor plates," Paladino said.
The fate of the long-planned office building, originally proposed in 1988, was not so clear earlier this year when the Brown administration questioned the deal BURA and former Mayor Anthony M. Masiello had approved with Paladino.
Among the concerns was an 11th hour purchase offer from Main Place-Liberty Group executive Patrick Hotung who offered $1.275 million for the parcel to build a 600-vehicle parking ramp. Hotung's offer caused city officials to revisit the appraisals which led to Paladino's $700,000 deal.
While the Brown administration is now comfortable with the $700,000 purchase price, it did eliminate a potential rebate of $150,000 included in the original sale agreement if Paladino encountered underground obstructions while digging the building's foundations. It's believed that portions of foundations from long-gone buildings are still intact under the site and could increase construction costs.
Buffalo's development chief Richard M. Tobe said the administration is also comfortable with Paladino's planned use for the site.
"This is an office building where an office building ought to go," Tobe told the BURA board.
Paladino labeled Hotung a "bitter competitor" who has attempted to derail the office project through a series of lawsuits over the past two years, prior to his attempt to outbid the developer to gain control of the site.
"There's a place for parking ramps and lots in downtown, but this is an ideal location for an office complex," Paladino said.
He plans to market the new building as a "lawyer's complex," citing its proximity to all downtown court buildings, as well as city and county offices.