Neither the developer nor the City of Buffalo is giving up after a State Supreme Court justice ruled in favor of a lawsuit blocking plans to label as "blighted" the former Millard Fillmore Gates Circle complex.
The lawsuit – which challenged the city's labeling of the 6.7-acre site as a special urban development action area, or UDAA – has delayed the project, which in turn delays the multimillion-dollar development plans, maintains eyesores and threatens the community benefits the project would provide, say the Brown administration and the developers.
"By approving the designation of an Urban Development Action Area the city was saving a dilapidated historic building, securing affordable housing on site, and creating approximately $30 million in contracting opportunities for minority- and women-owned businesses as part of the overall $100 million redevelopment of Gates Circle," said Brendan Mehaffy, executive director of the city's Office of Strategic Planning. "The ability to designate sites like Gates Circle as an Urban Development Action Area is critical for development throughout the City of Buffalo, so the city plans to continue pursuing this case in court."
Ultimately, developers want to transform the entire site into the new Lancaster Square community, with about a half-dozen buildings containing more than 500 condominiums, townhouses and apartments, plus an urban grocery, a fitness center, additional ground-floor retail space and potential office space.
However, the "the judge's ruling impacts the project significantly," said Christian Campos, president of TM Montante Development.
The UDAA designation would have made Montante eligible for up to 20 years of property tax abatements. In exchange, Montante agreed to meet certain affordable housing and MWBE hiring targets. The court ruling affects those parts of the plan.
"One of the things we've been open to is a public/private partnership (that) is needed to move the project forward. The judge's decision invalidates that part of the plan," said Campos, adding that his company will move forward with portions of the project while figuring out how to proceed with the rest.
The developers will put in "several million dollars" to reconstruct the 750-space Gates Circle parking ramp at 1277 Delaware Ave. using "traditional real estate finance methods" to help support the parking demand for the Lancaster Square community, said Campos and Byron DeLuke, TM Montante's director of development. That renovation project should start in the spring, they said.
Also this year, they plan to use historic tax credits to fund an adaptive reuse project to transform the site's 50,000-square-foot former medical office building at 1275 Delaware Ave. – which dates back to the 1950s – into 30 market-rate apartments, with commercial office space on the lower levels.
Both projects are part of the larger $150 million Lancaster Square redevelopment plan that was first proposed in February 2019. Two months later, the Common Council designated the former hospital site as a blighted area that included most of the former hospital campus, all of Gates Circle itself, and the rights-of-way on Delaware, Lafayette and Linwood avenues.
Critics mocked that designation for one of the city's better neighborhoods, and last May neighborhood resident and activist Daniel Sack sued the Council in State Supreme Court, saying the city is improperly applying the state law that authorizes such a designation, asserting that it's meant for a much narrower purpose: To encourage private developers to remedy or prevent blight on city-owned land.
The creation of the Linwood Lafayette UDAA was "arbitrary and fraudulent," argued Sack, who lives less than a half block from the site.
State Supreme Court Judge Mark Montour rejected the plan in November, ruling that the state law allowing UDAAs was intended for use on formerly city-owned land in “blighted” areas – which Gates Circle does not appear to be, Montour wrote in his decision.
State law also requires that 60% of land in a UDAA be publicly owned. The judge questioned the inclusion of city streets and rights-of-way to get to that minimum, writing that both were included "in a gerrymandered fashion to achieve a threshold measurement."
Montour also cast doubt on Gates Circle’s designation as a “blighted” area, pointing out that the Council has acknowledged it sits in a wealthy neighborhood.
Some work already had been completed at the site. The developer imploded the 11-story hospital tower and sold the land to Episcopal Church Home & Affiliates, which constructed Canterbury Woods, a new continuing care retirement community. A second parcel was sold to People Inc., which built Linwood-Lafayette Senior Apartments on what was a vacant parking lot.
The developer also took down some other structures and cleaned up the site. New sidewalks and a road have been installed inside the site's parameters, "so at some point in the not-so-distant future the whole road will be open connecting the east and west sides of the site," Campos said.
"When we acquired the site, on it stood 900,000 square feet of vacant hospital. It was a brownfield. So in that time, in a complicated and challenging way, we've moved a lot of this forward," Campos said. "We've made a lot of progress over time."