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Builders see steady growth across the region Several projects slated downtown and in suburbs

Delaware Avenue in downtown Buffalo has become a magnet for construction.

The former Dulski Federal Office Building is being prepared for an overhaul. Uniland Development Co.'s new office building is rising near Chippewa Street. New Era Cap Co. has moved into the refurbished former home of the Federal Reserve Bank of New York's Buffalo branch. And the new owner of the Statler Towers has grand plans.

Buffalo Niagara might not b e a thriving construction market compared to regions in the sun belt. But on Delaware Avenue and elsewhere this year, a number of projects will alter the local landscape.

Paul Ciminelli, president and chief executive officer of Ciminelli Development, said his company is "bullish" on 2007, though he isn't counting on a big surge in development this year. "It's kind of steady."

The most prominent new project is the $110 million headquarters of HealthNow New York, the parent company of Blue Cross/Blue Shield of Western New York. Duke Realty of Indianapolis expects to finish the massive complex along the Niagara Thruway this summer, said Drew Sanders, a Duke vice president. "It's right on schedule."

Duke will own the complex and lease it to HealthNow New York.

The complex will consist of 469,000 square feet, and a 1,500-car parking ramp. During a tour of the under-construction complex, Dennis Gorski, a HealthNow New York vice president, looked over the surrounding land and said he hoped the project would be a catalyst for spinoff development.

"You're going to have a lot of people in this general vicinity," he said.

Gorski noted that what was once a "brownfield," cleaned up in preparation for construction, will host a "green" complex. It will be the region's largest Leadership in Energy and Environmental Design certified building, meaning that it maximizes energy usage, light and sustainable green materials.

New Era Cap's new headquarters gave the former Federal Reserve Bank's offices a highly visible makeover. Ciminelli Development bought the building and will manage it for New Era.

Just up the street, the Uniland office building at 285 Delaware Ave., between Tupper and Chippewa streets, is targeted for completion this summer. M&T Bank will be the anchor tenant in the building, which is valued at $12 million to $15 million. Conestoga-Rovers & Associates has also agreed to take a floor.

An office project at that site had been talked about for years. Now it is a reality. "We recognize there's a lot of activity in the city for newer space, Class A office space," said Michael Montante, Uniland vice president.

Also on Delaware, Uniland is teaming with Acquest Development to renovate the ex-Dulski building. The business partners, who previously worked together on Niagara Center on South Elmwood Avenue, expect to start the project this year.

> Much downtown

Anne Duggan, director of operations for Ciminelli Real Estate Corp., said downtown locations have become far more attractive for businesses. A few years ago, she said, some companies wouldn't even think about moving downtown.

Developer Carl Paladino is adding some projects to the downtown mix. He is partnering with Frank McGuire to redevelop a cluster of buildings in the 400 block of Main Street, including the long-vacant former Courtyard Mall. The project will create a combination of office, residential and retail space, and is expected to be completed this year, Paladino said.

The developer is also close to beginning work on an office tower at 50 Court St. And on the waterfront, he is building townhouses and a tower called the Pasquale with 11 floors of condos and two floors of parking.

The Cobblestone district also has its share of building, including the Seneca Buffalo Creek Casino.

Seneca Gaming Corp. has begun construction on a temporary $3 million casino. It will be just a 5,000-square-foot prefabricated metal building housing 124 slot machines and a snack bar, allowing the Senecas to meet the obligations of the state gaming compact to have a casino up and running this year.

The casino project, however, seems to be in limbo. Earlier this month, U.S. District Judge William M. Skretny ruled that the National Indian Gaming Commission acted improperly in late 2002, when it approved the Senecas' efforts. The Senecas and casino opponents are at odds on the impact of the ruling, and the dispute is likely to take months to resolve.

Assuming it goes in the Seneca Gaming's favor, a permanent casino worth at least $125 million would be built. It would have 100,000 square feet of gaming space with 2,200 slot machines and 50 table games, upscale restaurants and shops, a 2,500-vehicle parking ramp and a new Seneca Gaming headquarters. The nine-acre site would be extensively landscaped and would include an artificial creek running through the property and public green space.

Nearby, developer Samuel Savarino is working on a Cobblestone project involving a combination of office space, retail and entertainment space and luxury condos.

Savarino is also building the second phase of the Western New York Medical Arts Center, close to the Buffalo Niagara Medical Campus. The center's first phase opened last year.

Paul Iskalo of Iskalo Development is making renovations to the Electric Tower, which has lined up several tenants.

Late last year, CityView Properties announced plans for a $13.5 million, 75,000-squarefoot Class A building on Exchange Street called Mill Race Commons. The developers of CityView previously turned a former Graphic Controls factory into the thriving Larkin at Exchange office building.

Developer Peter Krog has unveiled plans for an office building valued between $11 million and $17 million at 166 Church St., behind the Adam's Mark Hotel.

On the renovation side, the Statler Towers is headed for a planned $80 million makeover. British investor Bashar Issa's vision calls for turning the Statler into a hotel, residential and office complex.

As if that wasn't ambitious enough, Issa has also announced preliminary plans for a 40-story tower at South Elmwood Avenue and West Mohawk Street, which would be the city's tallest skyscraper by 33 feet. It would contain offices, condos and a hotel. But Issa doesn't expect to begin construction until 2008.

> In the suburbs

Not all of the activity is occurring downtown. In the Town of Tonawanda, Thomas Montante is taking an unusual approach with Riverview Commerce Park: He plans to leave 75 percent of its land "green." His company, Broad Elm Management, is starting with a "speculative" office and warehouse building, the first of 11 buildings planned for the 106- acre site.

In the Town of Lancaster, McGuire Development is getting to work on Wehrle Corporate Center. When complete, it is expected to be a $8.4 million project consisting of four buildings.

McGuire is also jointly developing a $5 million Amherst building that will become the home of the Brain & Spine Center of Western New York. The center expects to relocate there this fall.

Iskalo is acquiring what was formerly Stereo Advantage's service center on Union Road, and will turn it into professional and medical office space.

He is also considering a Class A office building at the corner of North Forest and John James Audubon Parkway in Amherst.

"We see strong interest in our product niche," he said.

Matrix Development, led by John Yurtchuk, is starting work on a $9 million surgical center in Amherst. Matrix might also start development of a second phase of the Excelsior Medical Campus for another group of physicians, Yurtchuk said.

The developer is also considering adding a 10,000-squarefoot building behind the Dent Tower on Sheridan Drive.

Yurtchuk said he sees "slow and steady growth" in the local market this year, partly stimulated by homegrown companies that have expanded and need more space.

Ciminelli might start work on another building in its Colvin Woods office park in the Town of Tonawanda, as an existing building there fills up, Paul Ciminelli said.

Ciminelli is also working with home builder Marrano/ Marc Equity on a mixed-use project at the former Gateway site on Main Street in Amherst. Marrano's portion of the project will be a subdivision known as Greythorne by Marrano.

Uniland has some suburban projects in the works, including 60,000 square foot building at Sheridan Meadows Corporate Park-North, a 120,000-squarefoot building in Airborne Business Park in Cheektowaga and a 150,000-square-foot " spec " building in CrossPoint Business Park in Amherst.

CrossPoint is also reportedly under consideration for another major back-office facility for Citibank, which last year opened a building in that park.

> Niagara projects

HSBC Bank North America has announced a data center that will be built in Niagara County. The entire project is valued at $166 million, including the new center, technology for it, and upgrades to an existing center in Amherst.

Ciminelli Development will start building a $42 million, 126,000-square-foot municipal complex in Niagara Falls. It is expected to get under way this fall, with completion targeted for the first quarter of 2009, said David Chiazza, vice president of development.

Calamar will also be active in Niagara County, with further development of its Woodlands Corporate Center in Wheatfield.

The developer will add a 30,000-square-foot Class A building, and in the summer will roll out its first office condo, said president Kenneth Franasiak. Calamar is also making plans for a "flex" building in the development.

Franasiak said he is trying to meet demand for new Class A space in the county. The office condos are designed to serve office- space users who also want an ownership stake, he said.

Franasiak said he isn't getting carried away with new construction, since he sees a "softening" in economic conditions related to development.

Overbuilding doesn't tend to be a problem in the Buffalo market, he said. "That's why the market is an efficient market."

Aside from the construction projects announced and under way, a number of long-talked about projects in downtown Buffalo are awaiting the green light, including a Bass Pro store for the dormant Memorial Auditorium, a new federal courthouse at Niagara Square, and development of the Outer Harbor.

e-mail: mglynn@buffnews.com