Battle resumes over delay at 50 Court St.
Hotung wants city to void pact with Paladino
Nearly two decades after it was first proposed, a still-not-built office complex along Court Street in downtown Buffalo is once again sparking controversy.
In the latest skirmish, Buffalo businessman Patrick Hotung charges developer Carl P. Paladino has missed several key deadlines tied to the construction of an 11-story office tower on city-owned property at 50 Court St. Hotung, general manager of Main Place Liberty Group, is calling on the city to void its 2006 agreement to sell the vacant land to Paladino for $700,000, and entertain his higher offer of $1,275,000.
Hotung has proposed Violet Realty, Main Place Liberty’s parent firm, build a privately-owned parking ramp on the site to serve its buildings.
“[Paladino’s Ellicott Development] has failed to fulfill its obligations under the Land Disposition Agreement which its own terms has expired,” Hotung wrote in a June 2 letter to Mayor Byron W. Brown. “Violet Realty respectfully requests that it be designated an eligible sponsor for the redevelopment of 50 Court Street.”
“Not a single brick has been added to the tax base, and a gaping hole remains on one of the city’s most important downtown streets,” he continued.
Paladino rejects Hotung’s missed deadline assertions as “total hooey.”
“Pat Hotung is the reason why that building isn’t up yet,” Paladino said. “If he hadn’t filed his meritless lawsuit to stop the project we wouldn’t be having this conversation.”
Under a May 2006 agreement with the Buffalo Urban Renewal Agency, Paladino faced an October 2006 deadline to deliver detailed plans for the $45 million office tower, followed by a December 2008 dead-
line to complete construction of the 335,000-square-foot building.
However, that timeline was interrupted by a lawsuit Hotung filed in August 2006, challenging the amount of money Paladino would pay for the vacant city land. The project contract suspends, or “tolls,” the deadline countdown if there is pending litigation.
Hotung, who lost an earlier lawsuit that charged the proposed office tower would have negative environmental impact on his neighboring properties, was rebuffed by the State Supreme Court and the state Appellate Division. The litigation hit its final hurdle on April 29, 2008, when the state Court of Appeals refused to hear an appeal.
Renewal agency lawyer Scott Billman said the April 29 Court of Appeals notice ends the tolling period and restarts the deadline clock.
“There is no pending litigation, so the clock has resumed and the redeveloper is expected to perform as outlined under the terms of the Land Disposition Agreement,” Billman said.
Under the agency’s lawsuit-stalled performance timeline, Paladino has until mid-July to deliver full construction documents. The land agreement allows the developer to pay a $10,000 fee to extend the deadline another 60 days.
Hotung contends Paladino should have met planning deadlines despite the litigation, but said he’d accept the July deadline.
“At least Carl would have deadline,” the Main Place Liberty Group executive said. “And when he fails to meet it, we stand ready to build a parking ramp on the site.”
But because nothing is simple in what has become downtown Buffalo’s longest-running development project, Paladino has a different deadline circled on his calendar — October 21.
“The clock can’t start until Hotung has exhausted all his appeals, and he’s crazy enough to take this to the U. S. Supreme Court,” Paladino said. “I’m not moving a muscle until he has completely run out of ways to block me.”
Paladino arrived at the October deadline by adding the 90 day period Hotung has from the date of the Courts of Appeals notice to seek U. S. Supreme Court review.
Deadlines notwithstanding, Paladino has reviewed his nearly three-year-old office tower proposal and has started revisions to downsize the project to meet current market demand for downtown office space.
“We’ve determined we need to go with a smaller building. We’ll represent a seven-story, 225,000-square-foot tower,” the developer said.
The downsized tower will cost approximately $30 million to construct.
He blames Hotung’s lawsuit for allowing two major downtown office projects to get ahead of 50 Court St., resulting in a smaller pool of available tenants. He cited Uniland Development’s new office building at 285 Delaware Ave., as well as Uniland-Acquest Development partnership to overhaul the former Dulski federal office building to mixed-use, with more than 100,000-square-feet of Class A office space.
Buffalo law firm Damon & Morey, a tenant Paladino had hoped to sign to 50 Court St., recently confirmed it will lease 50,000-square-feet at the overhauled Dulski site at Delaware Avenue and West Huron Street.
Paladino said he might sue Hotung for the loss of potential tenants and carrying costs tied to the litigation-caused delay.
“He deserves to be sued until hell freezes over. He’s cost me millions [of dollars],” Paladino said.
Paladino’s interest in the Court Street site dates back to 1989. Over the years, he’s proposed several different projects for the address, including a 15- story office/hotel tower.
