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The former Spaghetti Warehouse restaurant building on Elm Street could get new life, as a plan by developer Thomas M. Montante moves forward to convert the onetime lumber mill into 25 apartments and first-floor commercial space.

The project by TM Montante Development for what will be called the Planing Mill Building at 141 Elm received critical financing Tuesday when the Buffalo Urban Development Corp. approved a $500,000 “bridge” loan for the $8 million redevelopment effort.

The building has been vacant since 2004 and has been the subject of numerous redevelopment ideas in the past. Montante, brother of Uniland Development Co. CEO Carl Montante, wants to turn the 43,500-square-foot downtown building into a mixed-use facility that incorporates solar energy. Officials expect the project to merit LEED Gold certification, a high measure of environmentally friendly construction.

Specific details are still in flux, as the firm just began its design work last week with its architect, said President Timothy Vaeth. Plans call for apartments on the upper floors and as much as 15,000 square feet of commercial space on the first floor.

Montante is now in talks with a consulting firm about taking up 8,000 to 10,000 square feet, and it may reserve additional space for a second business, Vaeth said. Or the rest of the first floor might be used for additional retail amenities, bike storage or laundry facilities for the residents and more elevator access for the upstairs apartments, he said.

There has been discussion about setting aside about 1,000 square feet in the front of the building on Elm for “community space” of some sort, Vaeth said. He noted that the Michigan Avenue African American Heritage Corridor is just to the east, and the building is also close to the Buffalo Niagara Medical Campus and the downtown core.

“We don’t want to be an isolated structure there,” he said. “We want to interact with everything going on around us.”

Montante needed the bridge loan to carry it through the design effort and initial construction phase, while other financing is lined up. In particular, the firm is pursuing historic tax credits for the 135-year-old building, which is being nominated for listing on the state and national historic registers. But the sale of those credits to eligible investors is “more complex” and “takes a little more time,” Vaeth said. The developer is also obtaining a more traditional permanent construction loan.

“We will use these funds to carry us through the next couple of months and get design in place and start the interior prep work on the building,” Vaeth said.

Officials hope to put a site plan in front of city officials within a month and to obtain permits to start construction in late spring, possibly as soon as this month. The goal is to get the commercial space ready for occupancy by September and the apartments by December or January.

Montante, a commercial real estate development and investment firm, is also the developer of the Riverview Solar Technology Park, a 180-acre commercial development that includes on-site solar power generation.

Begun in 1878, the building has several sections built over the last century. It was first occupied as a lumber mill by E.M. Hager and Sons in 1883.

“A lot of the woodwork and finished carpentry in historic homes” on Delaware Avenue and Chapin Parkway “came out of this building,” Vaeth said. Woodwork from the mill also graces parts of St. Louis Catholic Church and the Buffalo Club.

“That’s one of the reasons why it’s historically significant,” he said.

Located on 0.9 acres between William and Clinton streets along the Elm Street arterial, the facility was used for other purposes after the lumber mill, and it housed the Spaghetti Warehouse restaurant for years until the restaurant closed in 1996. Since then, it has been home to Your Father’s Mustache, Sweetwater’s and finally Sensation’Z nightclub, which closed in 2004.

Most recently, it was under contract to be acquired and redeveloped by Greenleaf & Co.’s James Swiezy and former banker-turned-developer Paul J. Kolkmeyer, who had planned to spend $7 million to convert the industrial warehouse into up to 38 residential lofts and ground-floor commercial space. The project was even approved by the Buffalo Planning Board.

The partnership fell apart before the purchase, however, and Montante stepped in to buy it last October from Al Nemmer for $706,522.

An earlier version of this story incorrectly asserted that LEED Gold certification was the highest measure of environmentally friendly construction.

email: jepstein@buffnews.com