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Heritage Centers to sell 4 properties as it reorganizes

One of the region's biggest social service nonprofits is changing its name, selling its major properties and reorganizing how it delivers services as it transforms in response to regulatory and business changes.

Heritage Centers, a 60-year-old organization that works with people with developmental disabilities, is restructuring and downsizing its physical presence in Buffalo and its suburbs, even as it tries to serve a growing clientele of individuals and families in Erie County.

It's also abandoning the business name it has used for over 30 years and rebranding as The Arc Erie County New York as of Oct. 7

The nonprofit is selling four different properties it no longer needs – including its current headquarters – while consolidating its administrative and programmatic operations to a single new location that would be more efficient. The agency is hoping to garner more than $8 million for the four properties, according to Hunt Commercial Real Estate broker Clarke Thrasher, who is representing the agency.

Heritage officials are looking for a large single-story building with 40,000 to 50,000 square feet of space and at least 160 parking spots for its new location.

The nonprofit's leadership prefers to stay within the City of Buffalo, but so far the only buildings Thrasher and Heritage officials have identified to "possibly pursue" are outside the city, Thrasher said by email.

"We want to focus on the City of Buffalo as a consolidated site. However, we have not been able to find a facility that can support that level of parking," said Heritage Chief Financial Officer Mark Mortenson. "The search continues and we haven't really solidified on anything."

The name change will align the organization with the national group with which it is affiliated. Heritage Centers is the Erie County chapter of NYSARC Inc., a statewide organization formerly known as the New York State Association for Retarded Children. The state group is part of a similarly named national organization, which has adopted a new name: The Arc US.

Founded in 1957, Heritage Centers employs 1,100 full- and part-time workers and serves 2,800 individuals in Erie County. The organization operates on a $46 million annual budget.

"We are repositioning ourselves as a human services agency," Mortenson said. "The City of Buffalo will continue to be an area where we will have a physical presence to support the individuals and families. It just won't be in the current building that we operate out of."

The changes stem from a variety of factors. For one thing, the organization is currently decentralized. Its main offices and staff are split between its original building at 101 Oak St. in Buffalo, which was built in 1982, and a secondary building at 2643 Main St. It also has large operations in both Tonawanda and Hamburg, primarily for its service programs.

That means "administrative staff is operated in two split buildings, which does create a bit of inefficiency," Mortenson said. "That's a lot of driving and a lot of calling back and forth."

But the real impetus for change came because of the federal government. Officials had to shift a significant part of the nonprofit's business model – and drop a big part of its operation – after the federal Center for Medicaid Services in 2013 directed agencies like Heritage to close their "sheltered workshop" environments. Instead, they must now integrate the individuals in such programs into the broader community.

"Sheltered workshops" are physical facilities where developmentally or other disabled individuals are employed separately from the general population, often in manufacturing or similar fields such as woodworking. The concept, once commonplace, has become outdated in the United States because of changes in society, as well as a 1999 U.S. Supreme Court ruling that those with disabilities should not live, work and receive services in isolation.

The federal agency set a target date of 2020 for all such workshops operated by agencies such as Heritage to close.

"We heard that message loud and clear, and we have been fortunate to identify a lot of community work locations for the individuals that we support and serve," Mortenson said. "We took this to heart, and we've actually made incredible strides in incorporating our individuals into community settings."

That, however, meant an end to Heritage's Allentown Industries, which occupies two-thirds of the Oak Street building, and both of the main suburban buildings.

Allentown is a business services company that provided a variety of fixed-cost services to other businesses, ranging from fulfillment, packaging and assembly to furniture refinishing, lawn care, janitorial, and both temporary and permanent staffing. The company claimed to be the area's largest hand-refinishing firm, with facilities in both Tonawanda and Hamburg to cover the region, while its lawn-care division served both residential and commercial customers.

But with that business shutting down as of December, Heritage would no longer need the workshop space downtown or the furniture refinishing operations in Tonawanda and Hamburg. Officials looked at whether they could just reuse the existing facilities in different ways, but concluded that didn't make sense financially.

Instead, it's selling them. The agency listed 101 Oak St. for $5.2 million. The 68,276-square-foot, free-standing, one-story building includes 46,000 square feet of light industrial or warehouse space, with four enclosed loading docks and mezzanine storage, plus 24,000 square feet of office area. It also has about 151 parking spaces. Built in 1982, it sits on 2.68 acres.

Its other administrative facility, at 2643 Main St., is listed for $1.6 million. The two-story office building includes almost 32,000 square feet of Class "B" space, with private offices, training rooms and conference rooms, plus a maintenance shop and 20 parking spaces. Additionally, there are two adjacent parking lots at 31 and 34 Pannell St., with 90 spaces and 22 spaces, respectively.

Heritage is asking $725,000 for a light industrial manufacturing building 560 Fillmore Ave. in Tonawanda. The one-story building includes 6,000 square feet of office or showroom space and another 13,000 square feet of manufacturing and warehouse space, with three recessed loading dock doors and one overhead door.

In Hamburg, Heritage wants $405,000 for 2866 Pleasant Ave., a single-story block and metal building with 3,600 square feet of production or warehouse space, and 3,300 square feet for office or showroom use. Built in 1940, the one-story building sits on 0.72 acres at the corner of Pleasant and Southwestern Boulevard, with 25 parking spaces.

Meanwhile, Mortenson said, the agency plans to broaden its geographic reach by opening more smaller facilities in both the Northtowns and Southtowns, and relocating existing programs to those new sites. One such example is a new facility at 56 Main St. in Hamburg.

Officials are currently going through a site-selection and search process to identify other potential locations, but "selling the buildings is the big important thing to do right now," he said.

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