One of Buffalo’s leading developers on Wednesday said the One Seneca Tower should be demolished, not subsidized by taxpayers.
But the vacant 38-story downtown tower can’t be imploded and would cost more than $35 million to raze, another expert said.
Paul Ciminelli, CEO of Ciminelli Real Estate Corp., said Buffalo’s real estate market is “pretty stable” right now, aside from the tower, but trying to “fill a million-square-foot hole” in that building would be very difficult. Even with a mixed-use plan, he said, such a redevelopment would likely still require a significant office tenant – something that’s in short supply in Buffalo – to take up at least one-third of the space.
And he expressed concern and opposition to the oft-mentioned idea – proposed most recently by New York City billionaire businessman John Catsimatidis – that the government should help finance a $100 million-plus redevelopment of the landmark building.
No one has specified how much government incentives might be needed, but experts agree it’s likely to be millions of dollars given the scale of the redevelopment.
“We don’t need anyone to throw subsidies at this thing to destabilize the office market,” Ciminelli said during a meeting of the Buffalo Place directors. “That thing is just going to be hanging out there. It is a huge issue.”
He also called the 1.2-million-square-foot tower “functionally obsolete,” saying it would be better to open up cleaner access from downtown to Canalside without a huge barrier. “Then you can develop the site more to where Buffalo is going,” he said. “That building reflects where Buffalo has been. There’s a higher and better use for that site.”Others agreed.
“I’d personally like to see that building go away,” said Steve Carmina, co-founder and partner at architectural firm Carmina Wood Morris, also a downtown property owner and Buffalo Place board member. “That building is almost an impossibility unless you make it mixed-use, and I don’t know how you make it mixed-use. It’s too deep.”
Of course, Ciminelli and many of the other members of the Buffalo Place board are heavily invested in city real estate, so they also stand to benefit as long as the tower’s space is not on the market. Ciminelli conceded as much during the meeting.
“For someone who owns property downtown, it’s a concern for me,” he said. “The last thing we need is someone coming from downstate, looking to get subsidies.”
Indeed, the developer said he’s already fielded and rebuffed calls from other out-of-town investors, who ask him about how to “reposition” the tower and get government support for it. But “the only question I’d like to get is how much dynamite will it take.”
Certainly, demolition would not be an inexpensive venture, given the height of the building, the possibility of some asbestos, and its location in a more congested part of the city.
Jon Williams, owner and CEO of demolition firm Ontario Specialty Contracting, said much of the building would have to be taken down mechanically and slowly, because it sits astride or near key city infrastructure connections and other buildings. Mass demolition would create “a lot of issues environmentally.”
“You can’t physically implode the building. You’re going to essentially take it apart by hand,” he said. “It’s going to essentially be the reverse of the construction.”
He pegged the cost at “upwards of $35 million,” citing $25 million for at least the upper half of the building, at a cost of $40 to $50 per square foot, plus at least another $10 million for the rest.
Even so, Ciminelli said, the city would still be better off. “Maybe you can knock out the Skyway on the way down,” he joked, earning some chuckles.
Critics dismissed Ciminelli’s comments as just a “competitive concern.”
“It makes sense that he and others want it to go away,” said Peter Hunt, chairman and CEO of Hunt Real Estate Corp. “All that prime real estate returning to the market would be great competition not only for Paul but all of our local developers now active in the central business district.”
Hunt has been actively involved for years in efforts to re-lease and then redevelop the tower, and is currently working with at least one potential buyer. He rejected the contention that the building is outmoded, and suggested that demolition would just lead to “a new hole in a prime location” that would have to be redeveloped in the future, likely still with “enormous subsidies in one form or another.”
Williams also rejected Ciminelli’s argument that reusing the tower could damage the market, or that anyone would need “massive” government help to do so. And he said there would likely still be some kind of high-rise structure built at the site even after demolition, because “there’s not infinite real estate in downtown Buffalo, and that is really the center of what’s going on.”
“The market is continually looking for new and better space,” he said. “The older space has to be rehabilitated and rebuilt, or it would be vacated.”
Instead of a full demolition, Williams suggested that a new owner could take off just the top 10 floors of the tower, gut the interior to its shell, remove the windows and pre-cast infill around them for eventual replacement, and install an exterior glass elevator on the outside of the building to enhance its appearance. That could probably be done for about $22 million, he said, followed by the interior renovation.
“If you did that tower right, and you did the exterior elevator, it would be the nicest condominium structure in downtown,” he said.
Built in 1972 as the headquarters for Marine Midland Bank – now HSBC Bank USA – One Seneca is the tallest privately-owned building in upstate New York, dominating the Buffalo skyline with its tan cement edifice. But its future has been in doubt since its two largest tenants, HSBC and law firm Phillips Lytle LLP, decamped for new office space just down the street in late 2013. Together with the prior closing of the Canadian consulate, that left the tower 95 percent empty in a matter of months, prompting the loan servicer at the time to foreclose on the $91 million loan.
Miami Beach-based LNR Partners, which now represents the bondholders that own the mortgage, finally took possession of the tower through an auction in October 2015, adding the five-story parking ramp across Washington Street in March 2016. The firm has been trying unsuccessfully to unload them to a new buyer, but no local developer or investor has expressed interest.
“Because it’s so controversial, no tenants will even consider going in there because they don’t know who the landlord will be,” Ciminelli said. “But in the long-run, it’s still out there.”