A new, high-end townhouse development is going up in Buffalo's Waterfront Village adjacent to Erie Basin Marina.
The Townhouses at Waterfront Place, a 15-unit, upscale housing development, is slated to welcome its first residents this fall.
The units are expected to sell for between $529,000 and $659,000, but the new owners will be getting tax breaks of about $12,000 annually on their property tax bills in the first few years because the townhouses are located in a state Empire Development Zone.
"Those first years, they'll only be paying around $800 in property taxes. That's a powerful incentive," said Carl Paladino, chief of Ellicott Development Co., which is developing the project.
Four units are to be built immediately, with the others to follow as sales dictate, he said.
"We are taking a bit of a risk by aiming for the highest end of the market," Paladino said. "But if demand is as strong as we think it will be, we'll have them all built and sold by early next year."
When they were first proposed in 2005, Ellicott Development anticipated a price range of $275,000 to $310,000 for the new townhouses, but they've now morphed into larger, better-appointed units priced at roughly double that range. The two- and three-bedroom townhomes will be as large as 2,800 square feet.
The decision to shoot higher came after canvassing current waterfront residents to find out what they would want if they were building from scratch, Paladino said.
"They're telling us they want larger bedrooms, very high-end finishes, two-car garages, overall larger floor plans," the developer said. "To really give people what they are looking for, it is going to cost more, so we'll see how the market reacts to the first phase and make adjustments if we need to."
Ellicott Development also researched recent resale prices of waterfront condominiums and townhouses and noted several in a price range similar to the cost of the units it is building. It found one sale last fall that topped $900,000.
The red brick townhouses will be built along Ojibway Drive, on a vacant five-acre parcel just east of Admiral's Walk in the Waterfront Village. They will be joined by a 13-story, 48-unit condominium tower, The Pasquale, that will be under construction this summer.
Because Waterfront Place is within a state Empire Development Zone, townhouse buyers will have an added incentive of significant property tax breaks during their first 10 years of ownership, Paladino said.
The tax break will allow the new owners to pay a rate that is calculated on the "unimproved land" value of their homes for the first six years, with the rate escalating to 25, 50, 75 and 100 percent of the full, improved value over the final four years.
At current City of Buffalo property tax rates, the average townhouse in the new development would be taxed at approximately $12,500 per year based on full assessed value.
Ellicott Development gained city approval for the $40 million residential project in 2005. Ellicott paid the city $848,000 for the last remaining development parcel in the Waterfront Village neighborhood.
The development firm, which has accumulated a list of would-be buyers who have signaled interest since the project was announced, will kick off an official marketing campaign this week. Its first target market will be Waterfront Village residents who have been invited to an informational session this week.
The company expects to receive state approvals for its condo tower in the next 60 days, opening the door to presales of those units.