An expert panel from the Urban Land Institute presented preliminary suggestions for the future of the HSBC tower in Buffalo on Thursday. The building, owned by Seneca One Realty, is facing the loss of two tenants, HSBC Bank and Phillips Lytle LLP, by Jan. 1, 2014.
Their departure will put the occupancy rate in downtown Buffalo's tallest office building at five percent.
The proposal recommends hiring a developer and update the 40-year-old building into a mixed-use center. The panel is proposing a banquet facility, resident, hotel and office space.The panel said the plans will not be fulfilled without public sector investment.
Steve Fitzmaurice, Chief Operating Officer of Seneca One Realty, says that should not be a problem.
“I think you can’t look at this strictly in the current time. This building has had an assessed value of somewhere between $50 million and $84 million over the last 40 years and paid taxes according to that assessment. That’s a lot of money. This building has returned a tremendous amount of money to the public as it is and I think if we play our cards right, this building could have an assessed value that far exceeds where it is right now,” said Fitzmaurice.
Panel volunteer Art Melito says mixed use is the only option because the owner is unlikely to get another tenant as large as HSBC Bank. He says right now, half of the site is undeveloped.
“So there’s really is a huge opportunity to upgrade some of the public open space that exists on-site and also connecting to some of the things that are already being done on the waterfront. This site could really be an anchor between the central business district and the waterfront and promote the idea of 24-hour activity downtown,” said Melito.
The panel said one challenge will be the $75 million balloon payment due on the current lease by January of next year. Fitzmaurice says negotiations with lenders will take place before then.
The panel said inaction was not an option, and believe the building is not a lost cause. Their full recommendations will be completed within a month.
