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Developers propose six-story building for Gates Circle site

A project to create a new neighborhood at Gates Circle will begin with a six-story, brick-and-glass apartment building with first-floor retail, balconies and a rooftop patio.

But the larger development around it will no longer include the YMCA, which has withdrawn from the project.

Meanwhile, the developers are still trying to buy an adjacent 750-space parking ramp from the city. And the future of the century-old former homeopathic hospital building that still stands on the site is less certain, after the developer failed to qualify for historic tax credits that were critical to the financing.

Those are some of the new details that emerged Tuesday, as partners TM Montante Development and Morgan Communities of Rochester kicked off their reuse of the former Millard Fillmore Gates Circle Hospital site by formally filing plans with the city for the first building. The project will be considered by the Planning Board on May 8.

The new details reveal progress in some areas but false starts in others. And they show just how complex the entire effort will likely be.

"All aspects of the project have been challenging," said TM Montante President Christian Campos. "We are just going to keep moving forward to try to figure out the right solution."

Developers Thomas Montante and Robert C. Morgan have teamed up to convert the sprawling property into what they're calling Lancaster Square, described as a "vibrant, mixed-use urban place" with a combination of modern homes, neighborhood retail and commercial office space.

The developers already own most of the 10-acre site, which Montante purchased from Kaleida Health in December 2013 after the hospital closed. Crews demolished most of the structures – including imploding the 10-story main hospital building – and then spent months clearing the site and cleaning it of environmental contamination. Only the original 1911 homeopathic building still stands.

Plans call for $150 million in new development that would include up to 531 condominiums, market-rate apartments and townhomes, as well as a grocery store, fitness club, some commercial office space and other ground-floor retail storefronts. That doesn't include the costs of the $41 million Canterbury Woods senior housing community at Gates Circle or the $11 million People Inc. senior facility on Linwood Avenue nearby.

"We've been viewing this as a transformational project since day one," Campos said.

Canterbury Woods, the suburban senior community run by Episcopal Church Home & Affiliates, is constructing a six-story urban facility at 3 Gates Circle, with 53 independent-living and five assisted-living units. The nonprofit, which has a long waiting list for the apartments, already acquired its 1.4 acres of land from Montante and will operate separately.

People Inc. has also received approval late last year to build a 37-unit senior housing complex on a 1.1-acre vacant former hospital parking lot at 637 Linwood Ave.

That leaves 5.3 acres still under the developers' control at the main hospital site, plus a separate 2-acre parking lot that stretches from Lafayette to West Delavan avenues.

The proposal filed Tuesday would mark the third project on the site, but the first by Montante and Morgan, whose firm joined the development team in late March, bringing its experience with apartment development and management, as well as its financing contacts. Morgan's Pittsford-based company owns and manages more than 180 properties in 14 states.

As initially announced in early March, the new proposal calls for a six-story building on the northeast corner of Delaware and Lancaster avenues with about 60 market-rate apartments and at least three first-floor retail spaces.

Plans call for the 67,000-square-foot brick-and-glass building to feature 10 studio apartments of 600 square feet each, 35 one-bedroom apartments of 650 square feet and 15 two-bedroom units with 1,200 square feet in each. Rents have not been finalized.

An artist's rendering of the side view of the proposal to construct a six-story apartment and retail building at Lancaster Square. (BLT Architects)

The new building would be located on Lancaster Square, a new public space Montante is creating at the heart of the main site. That's also just north of the new Lancaster Avenue extension, a road built by Montante that stretches the existing street from Delaware to Linwood avenues. The new street isn't yet open to the public.

Besides standard bank construction and permanent loans, the developers plan to pursue various government incentives to help pay for the $13.4 million building, although they have not yet determined what they will seek. The redevelopment would also qualify for state brownfield tax credits.

"The project has been very well-received, and the process has been very collaborative," Campos said. "We feel very good about where we are with this building."

The Planning Board filing comes after extensive community outreach efforts by Montante and Morgan, including discussions with the Gates Circle Community Advisory Committee, area block clubs and other community groups. Montante, which began the planning last summer, also worked with Robert Shibley and Bradshaw Hovey of the University at Buffalo’s Regional Institute to develop a process for reviewing the design with the community, including a values statement.

That effort appears to have paid off, as at least one neighborhood leader said she will back this project with a personal letter of support.

"The process used by TM Montante to engage with the community in a meaningful way should be used as a model for other development projects in the city," said Gretchen Cercone, president of the Lancaster Avenue Block Club.

Officials hope to start construction at the beginning of summer, with about 12 months of work before completion.

The Lancaster Square concept also envisions two more large buildings on the site, with ground-floor retail, a layer of commercial office space above that and residential units on the upper floors.

The developers also hope to sign an agreement with the city within the next few months to buy the parking ramp on Linwood, Campos said. Crews will then stabilize and upgrade it.

But not everything is going as planned. Officials are now seeking other funding options for the homeopathic building project, after months of talks with the National Park Service and State Historic Preservation Office led nowhere because so much of the larger hospital complex had already been demolished.

Campos also said the YMCA – which had earlier signed a letter of intent to participate in the project – had notified the developers that it was "no longer considering the site" for its North Buffalo needs, after hiring a consultant to evaluate options. YMCA spokesman Geoff Faulkner said the decision was based on a study of market demographics, membership and service areas.

No company has agreed to operate the grocery store yet.

Campos said the team is still planning to include a fitness center in the project, and continues to talk with Tops Markets and other stores.

Discussions have also begun with other commercial tenants, who are attracted not only by the convenience to the Buffalo Niagara Medical Campus but also to downtown and the Elmwood Village.

"There's been a lot of momentum that's continued to build. There's a lot of interest in the site," he said. "People have steadily become believers in the project."

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