Three prominent local real estate developers bought the massive Seneca Industrial Center in the Larkin District for $3.1 million this week, as part of a planned $50 million redevelopment project that already has received some federal funds.

Gordon Reger, James W. Cornell and Peter Krog plan a multiple-phase, multiple-year rehabilitation of the 1.2 million-square-foot monolith at 701 Seneca St., complementing what developer Howard A. Zemsky did on nearby Exchange Street with the Larkin at Exchange Building.

The project will include cleaning up and updating the eight-story building's aged facade, as well as converting nearly half of it into Class A and Class B office space.

The rest of the building, about 500,000 to 550,000 square feet, will remain commercial and light industrial "incubator" space, which has been the building's traditional use for decades. Currently, 55 percent of the building is occupied.

Work is expected to begin shortly but could take five to seven years, Cornell said.

"We're pretty charged up about this," Cornell said. "We think it's going to be a pretty vibrant and dynamic addition to the Larkin District. It's the last major project that really needs some solid attention."

The group, which at one time called itself Larkin Partners, is separate from Zemsky's Larkin Development Group, but Cornell said that "we have a good working relationship with Howard, and we look forward to being good neighbors."

Zemsky agreed. "We see it as a huge vote of confidence in the Larkin District and our vision."

The three developers' companies -- Reger Holdings LLC, Praxiis Business Advisors and Krog Corp. -- are the principals of Seneca Larkin 701 LLC, which bought 635, 653, 680 and 701 Seneca St. from Seneca Industrial Associates LP. The selling group includes the principals of Seneca Development & Management, which operated the building for 40 years.

"It's a long time. A number of our owners are well into their retirement years. That was probably one of the overriding reasons why we felt it was time to sell," said Alan Dewart, co-owner and president of Seneca Development, which will develop and manage other projects. "We felt it was time to step aside and let another ownership group come in and take the building to the next level."

The three developers are veterans of the real estate industry. Reger, who is chairman and CEO of his family-owned real estate investment firm Reger Holdings, is a former executive at his family's Marc Equity Corp., which later merged with Marrano Homes. Through his current company, he has purchased or developed commercial and residential properties in the Boston area, Rhode Island, Maine and Alaska.

Krog is an prominent and active Orchard Park-based property developer, with an expertise in brownfield properties. And Cornell, who is also an executive with Reger Holdings, is a management and business adviser.

"We're real pleased with this group. They're local, they're responsible, and they certainly have the resources," Dewart said. "It's a win-win situation, and it's good for Buffalo."

The four properties that the developers acquired, as well as Zemsky's Larkin building, originally were part of the sprawling 54-acre Larkin Soap Co. complex, one of the largest industrial complexes in North America at the time. "It was really quite astounding," Cornell said.

The Frank Lloyd Wright-

designed Larkin Administration Building stood at 680 Seneca, until it was sold in 1943, abandoned in 1945 and demolished in 1950. It's now a parking lot, as is 653 Seneca nearby.

The property at 635 Seneca, at the corner of Larkin Street, is a 140,000-square-foot building with a "very large chimney," which Cornell said might be the largest in Buffalo. It's the former Larkin engineering and boiler building that supplied all the steam heat generated for the entire complex. Plans call for converting that into a 54-unit loft apartment project, Cornell said.

But the big undertaking is the imposing Seneca Industrial Center, actually eight contiguous buildings with a wrap-around facade. That was the former Larkin manufacturing facility, while Zemsky's building was the former Larkin Terminal Distribution Warehouse.

"We're looking forward to making some good things happen with the building," Reger said.

The developers intend to first rehabilitate the facade, replacing windows and "bringing the building up to a better aesthetic standard than it is today," Cornell said. He said they plan to restore the exterior to the building's "historic period" of the late 1950s and are working with the state Historic Preservation Office to "determine what [is] the exact look and feel of windows and other significant architectural features of the building we'd like to preserve."

"Our intention is to work on the facade as quickly as we can, but we need to make sure we do that in agreement" with the state agency, he said. That may delay the start until spring, he added, "but certainly no later."

"That building ... has not had a lot done to it since the '50s, so we are of course looking forward to what promises to be the aesthetic transformation of that building," Zemsky said. "This is going to accelerate the transformation of the district."

The first six floors each has about 170,000 square feet, while the top two floors can accommodate 150,000 square feet. But the building's average tenant currently occupies 5,000 to 30,000 square feet.

Initially, the developers plan to commit about $5 million over 18 to 24 months.

But the entire project could cost $50 million, including tenant improvements and build-outs, as well as additional services.

Cornell said the group already received a $5 million federal allocation from Recovery Zone facility bonds. He said he and his partners also expect the projects to qualify for federal and state historic tax credits.

jepstein@buffnews.comnull