Stephen P. Fitzmaurice has a huge challenge on his hands.

Fitzmaurice, the chief operating officer for Seneca One Realty, the New York City-based investment group that owns One HSBC Center, is scrambling to find new uses for a 38-story office tower that will be mostly vacant by October, once its biggest tenants, HSBC Bank and the Phillips Lytle law firm move out.

The tower’s owners have floated the idea of turning the tower into a mixture of apartments, condominiums, office space, a hotel, retail and possibly an observation deck and restaurant on the top two floors. Fitzmaurice brought in a panel of experts from the Urban Land Institute last week to review those plans.

The experts said converting the building will require significant amounts of public money, although they warned that failing to do anything would be a major setback to the development efforts along the waterfront and elsewhere downtown, leaving a towering empty building in the heart of the central business district.

Q: What’s the first issue that has to be tackled? Is it the $75 million balloon payment that’s due in January 2015?

A: The first thing on the list was to address the balloon payment issue. If our owners can talk about the willingness of the public sector to partner with them about the future of the building, that makes it a lot easier to speak with the [lenders] and come up with a solution.

Q: How does the balloon payment work?

A: It’s a pretty common thing in commercial lending agreements. The term of our mortgage was for 10 years, and during that time the principal would decline from $84 million to $75 million. At the end of the 10 years, you have a $75 million balloon payment. Your choice is to pay off the $75 million or you refinance.

In most cases, you refinance, but the lender has to look at the project and say, OK, how do we do that. In this process, you have a situation where negotiations will have to take place between our owners and the lender and come up with something that’s going to work.

Exactly what that is, I’m not sure because, frankly, it’s something I’ve never been involved with.

Q: The deadline for the balloon payment is January 2015. In practical terms, if you are to work something out, when do you need to have it done?

A: I think we need to work something worked out this year, before the end of 2013. We have a good deal of occupancy through the most of this year, so we have the ability to take care of principal and interest payments and take care of the building.

But we need to figure out how we do business after the end of the year. That first major step is to work something out with the [lender] and determine how you’re going to do that.

Q: What’s the downside of the tower selling at auction?

A: If the building were to sell at auction for God knows what sum of money, you don’t know what you’re getting. I think it would be far better for our current owners and the city and the other people in the public sector to work together and try to come up with something that’s going to work for everybody.

Q: Are the other projects, such as the HarborCenter project, a help or a hindrance to what you’re trying to do?

A: The biggest is the Sabres HarborCenter development. That development is incredibly complementary to what we want to do here.

You’re talking big-time street level retail, a hotel that’s going to work with the two ice pads that will be there. And with the two ice pads, how could that be any more perfect across the street from the arena?

I look at what Erie Canal Harbor Development Corp. is doing across the street from here and they’re changing this from an area where people would simply come to work each day to an area where they come for recreation.

We’re starting to see a tremendous amount of concentrated activity here, and I think virtually all of it is very complementary to what we’re doing.

Q: The Urban Land Institute report showed that many of the reuses can’t stand on their own financially. How do you get around that?

A: Some of the returns are better than others and you have to think about how one type of development complements another.

You talk about something like market rate housing, where they said the return is something along the lines of $1.50 per square foot per month. OK, that’s not a great return, but will that fund some significant retail on the ground floor or lobby level that we might be able to get some tremendous rents with?

This is a very nice milestone along the way, but we have a lot of work left to do.