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Cobblestone District draws new interest as casino expands

Activity in Buffalo’s Cobblestone District has picked up steam as the neighborhood draws more attention because of investments by the Seneca Nation and speculation over a downtown stadium.

In recent months, two aging industrial properties have been acquired separately by the Paladinos and Pegulas, with no announced plans for either one.

The Seneca Gaming Corp. undertook a $40 million expansion of its Seneca Buffalo Creek Casino, introducing new features in a bid to draw more patrons.

Uniland Development Co. is marketing a nearby parking lot property for redevelopment.

And both the Paladinos and the Senecas are contemplating new projects in the neighborhood, capitalizing on its convenience to downtown Buffalo, Canalside and the Niagara Thruway.

The interest in a neighborhood dominated for years by warehouses, industrial sites and vacant lots has been building for years as developers renovated older buildings along Mississippi Street and the Seneca Nation built its casino.

Last month, Sabres owners Terry and Kim Pegula acquired the Hi-Temp Fabrication building at the corner of Illinois and Perry streets. They have not yet said what they plan to do with the building.

Now, Ellicott Development is exploring additional real estate purchases in the district after buying a warehouse on Chicago Street last October, and the former Nicolson & Hall boiler building at 41 Columbia St. three years ago.

CEO William Paladino would not identify any particular buildings or properties that the developer is pursuing, but confirmed the company’s interest.

“There are some other things we’re looking at, but nothing finalized that we can talk about,” Paladino said.

William Paladino and his father, Carl, have already assembled real estate in the Cobblestone area and surrounding streets over many years, although much of it consists of vacant industrial buildings or empty lots. The company renovated the long-vacant, eight-story Fairmont Creamery building at 199 Scott St. – a block away from the Seneca Buffalo Creek Casino – into apartments, offices and a restaurant. Among other tenants, it houses the offices for Liazon Corp. and Pegula Sports & Entertainment.

Most recently, the Paladinos last fall bought a 43,000-square-foot building at 222 Chicago St. from the Kellner family, paying $1.325 million for the site at the corner of Perry Street.

Those investments put Ellicott Development in a prime position to capitalize on the recent growth of the casino, as well as speculation surrounding the potential for the future construction of a Buffalo Bills stadium. Among other locations in Western New York, an early examination of possible sites for a new stadium included downtown Buffalo.

William Paladino also confirmed in January that the Senecas are considering a large mixed-use project in downtown Buffalo, on non-tribal land adjacent to the casino, that could include some combination of residential, office and entertainment, along with a parking structure.

Paladino said neither the Senecas nor the stadium were factors in the Chicago Street purchase.

“Obviously, it’s in the back of our head that it might go down there, but that didn’t influence our decision to purchase this property,” he said.

Paladino said the company does not have plans yet for the 222 Chicago building, currently home to 130-year-old precision manufacturer Kellner Bros. Inc. and machine shop Quality Grinding Inc. However, he said those two companies are expected to move to new locations, opening up the entire building to reuse.

“We’ve been looking for a warehouse space, and this fills a few short-term needs that we have,” William Paladino said. Also, “it’s a big piece of property that could help us with parking for the Fairmont.”

The Kellner purchase was part of a larger tax-free real estate transaction by Ellicott, in which it bought several properties in Buffalo and Hamburg while selling another for an equal value. The sale is still pending.

Besides 222 Chicago, Ellicott also bought the Northwest Community Health Center building and adjacent parcels at 1294-1300 Niagara St., for $2.375 million; BryLin Hospitals buildings at 1255 and 1263 Delaware Ave. and 550 Linwood Ave., for $4.6 million; and a 12,600-square-foot, two-story office building and meeting hall at 3800 Lakeshore Road in Hamburg, formerly home to United Auto Workers Local 897.

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