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Project at Seneca Mall site called unworkable

The proposal to transform a faded West Seneca retail zone into upstate New York’s most ambitious commercial development could not succeed based on the area’s demographics and would cannibalize existing businesses, according to the draft version of a new study commissioned by the town.

Combined with officials’ fears that S&R Properties’ $700 million Seneca Place plan for its former Seneca Mall property would overwhelm town finances and infrastructure, it appears that the original concept of the massive mixed-use development first proposed in 2012 faces a dim future – at least in Town Hall’s view.

But the developers are not letting go of their grand vision for a project they say reflects their optimism in the area’s future and in its strategic location near major transportation routes like the Thruway, Niagara Thruway and Routes 400 and 219.

And West Seneca officials remain optimistic that the Denver-based company can still upgrade a long- time eyesore into a major commercial improvement, though they now acknowledge the $130 million in town funds it seeks throughout the life of the project in its current form would prove too much to handle for a suburban community of 44,000 people.

“The public participation in this particular project is just too heavy for our town,” Supervisor Sheila M. Meegan said Tuesday. “It’s really too much of an ask for the town.”

Another key voice on the town’s three-member board, Councilman Eugene P. Hart Jr., also raised objections surrounding the heavy financial burden projected for the town. He hopes S&R will still undertake some type of development that West Seneca can afford.

“I just don’t believe this is the right project for us to be involved in,” he said. “It’s basically a high-risk real estate venture.”

But S&R CEO Scott R. Congel, a Syracuse native now based in Colorado, late Tuesday said he is “encouraged by several aspects of the recent … report as it relates to potential infrastructure funding from the town.”

“I look forward to continuing a positive dialogue with the town and collaborating with them regarding the size and scope of the project, which will ultimately be good for West Seneca and the entire region,” he said in a statement. “It is important to note that all of the revenue streams would be new to the town and come directly from the project as it is built out in phases, therefore not placing an additional burden on the taxpayers of West Seneca.”

In the past he has also claimed the project would support 7,000 construction jobs and more than 2,000 permanent jobs.

‘Seneca Place’

S&R’s $700 million “Seneca Place” plans for 3 million square feet of retail, residential, recreational and hotel facilities had been labeled a “game changer” by town officials when first unveiled almost four years ago. But it centered around $130 million worth of town-sponsored recreation and parking facilities that would consume approximately 85 percent of West Seneca’s entire bonding capacity, town officials say. They add that the project would also require $10 million to move a Tops market and Kmart store on the site while involving still more millions in future infrastructure upgrades.

“From the very beginning,” Hart said Tuesday, “we have said if this was such a great project, why can’t it be completed on the private side?”

Meegan said the town has always approached the Congel proposal with cautious optimism, but the new report confirms trepidations dogging it from the beginning.

“We now need to pump the brakes,” she said, calling the firm’s business plan “overly optimistic” and citing the report’s conclusions that the project would shutter other sports and entertainment venues in the region.

“The market is pre-saturated with sports facilities, and this would have a negative impact on the other great facilities we have,” she said. “Other developers do this without these facilities, and the burdens should not be shifted onto the taxpayers.”

The project began on an even grander scale, but its original $1 billion price tag was downsized in 2014 when developers dropped plans for two residential/hotel towers of 42 and 38 stories. There is also no further outright talk of a new Buffalo Bills stadium hypothetically offered in a separate project on an adjoining parcel.

Viability concerns

Now the original concerns of town officials are crystallized in a $40,000 study commissioned by the town to determine its ability to handle such a massive project. The town on Tuesday released the report by RKG Associates of Dover, N.H., and C.H. Johnson Consulting of Chicago, which analyzed the proposal of S&R, headed by members of the same Congel family behind some of the largest shopping malls in the Northeast (including Walden Galleria in Cheektowaga and Destiny USA in Syracuse).

Congel proposes turning the 53-acre site into a massive mixed-use development, featuring 1.2 million square feet of retail and residential space, 300,000 square feet of office space, a 65,000-square-foot cinema complex, two hotels, below-grade and surface parking for 6,000 cars, as well as green space.

But key to the concept is the company’s proposal to build a 135,000-square-foot community and athletic center, complete with swimming pools, plus a 57,000-square-foot ice arena and events facility. It would require about $130 million in town support, basically committing all of the town’s bonding capacity and leaving little for any other capital needs – including a $70 million sewer upgrade now underway.

While it is possible the project could continue in another form without the town facilities, the idea centered around the public and private components working together. The report released Tuesday centered on that partnership and issued several key findings:

• Demographics suggest that the new sports and recreation facilities would “likely need to compete with existing facilities to capture a diminishing target market.”

• Marginal population loss and stagnant household growth.

• Any new destination retail in West Seneca would largely compete in an “adequately served market … suggesting that new inventory will compete with existing inventory without necessarily increasing consumer draw or market area.”

• A sizable inventory of sports facilities already exists within an approximate 30-minute drive time. “This will result in competition for users between the existing facilities,” the report said.

The concept also presents other problems. Although thousands of new residents could populate the new buildings, the consultants question whether they could support the cost of the new town facilities the developers seek.

“These alone are not likely to be sufficient to fully support the financial requirements for the proposed town-owned facilities,” the report said.

It also said the recreational services would adversely compete with existing organizations like the YMCA and that the area’s population could not support the significant scale of the project proposed.

“The demographics of the West Seneca marketplace are sub-par and could challenge the financial viability of a large-scale development such as the proposed facilities at this time,” the consultants said.

In addition, the consultants questioned the viability of the project’s retail and housing components.

“The additional large-scale retail development proposed at Seneca Place, unless specifically targeted to fill the ‘voids,’ would do little to further expand the market and would thereby largely result in a transfer of existing sales,” they said, “particularly given the nominal population and housing growth.”

Local opposition

Even absent the concerns of Town Hall, however, the project as proposed was bound to face legal opposition from other area developers like Carl P. Paladino, who owns a hotel and other parcels adjacent to the proposed Seneca Place. He said Tuesday he was prepared to erect one of his signature billboards in the area urging Congel to “go back to Aspen.”

He pointed to the 30-year tax breaks Congel seeks for the project (already rejected by County Executive Mark C. Poloncarz), and called his appeal for town financing a “front-end rip-off for a 6,000-space parking garage to serve as the foundation (for the development).” He also said West Seneca can’t support Congel’s hotel plans and would “send off the whole center of gravity” in the town.

“I will fight it all the way to the Supreme Court if I have to,” Paladino said, adding he believes the town should use its right of eminent domain to acquire the property for public use after decades of neglect by S&R Properties.

Several sources say West Seneca is also mindful of a similar S&R project proposed for the former Irondequoit Mall in Monroe County, which has remained vacant for years and is mired in lawsuits involving several local municipalities.

Hart said the project will still seek public input in hearings to be scheduled later at one of the town’s high school auditoriums.

“We want the public to know how and why we have reached this decision,” Hart said. “We wanted to get this right.”