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HSBC asks more time on land deal ; Indicates interest in site alternatives

HSBC Bank wants more time to consider constructing an office building on Buffalo's waterfront, a request that suggests the banking giant still is looking at alternatives to its current home downtown.

Bank executives are seeking a 60-day extension of their option on the Webster Block near the waterfront as part of a search that could result in a new location for its headquarters and thousands of employees.

Just days before the request, city officials and downtown business leaders encouraged the bank to stay in HSBC Center and suggested a move elsewhere might destabilize the downtown office market.

Despite that plea, Mayor Byron W. Brown endorsed the extension Thursday and urged the Common Council to follow suit quickly.

"It's our belief this extension should be approved," said Peter Cutler, Brown's spokesman. "This is about preserving 4,000 jobs."

Preservationists say they see Brown's endorsement as a kind of political double talk.

They want to know why the mayor would support an extension on the Webster Block just days after publicly asking the bank to stay in HSBC Center.

"We can't have the waterfront competing with downtown," said Timothy A. Tielman, executive director of the Campaign for Greater Buffalo. "We feel the Webster Block deal is very bad for the downtown office market and very bad for the waterfront."

Brown would seem to agree, to some extent.

In a recent letter to the Erie Canal Harbor Development Corp., which oversees the waterfront site the bank is considering, the mayor warned of serious consequences if HSBC moves to a new location, even one just a block away.

The mayor, in fact, went so far as to offer a "very aggressive incentive package" to keep HSBC USA in the 38-story office tower.

So why would he now turn around and give HSBC more time to consider a competing location?

"All I care about, and all the mayor cares about, is keeping them downtown," said Jordan A. Levy, chairman of the harbor development agency. "By not granting the extension, you risk losing thousands of jobs that are now downtown."

Business leaders are worried because HSBC is one of downtown's major tenants and employers, and the downtown real estate market historically is slow to absorb gluts of empty office space.

Some fear the downtown market would not survive a move by HSBC when its lease expires in October 2013.

Business leaders also worry about the potential for financial problems at one of downtown's flagship buildings and the possibility of a big reduction in the assessed values of HSBC Center and other buildings.

Common Council leaders were just learning of the bank's request Thursday and declined to speculate on what the Council might do.

"I would like them to stay where they are," Council President David A. Franczyk said, "but I'll reserve judgment until there's a full airing of the issues."

The bank's option on the Webster Block, which is bordered by Main, Washington, Perry and Scott streets, will expire early next month.

e-mail: pfairbanks@buffnews.com

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