As structural steel rises on Ciminelli Real Estate Corp.’s Conventus medical project in downtown Buffalo, the developer is moving to buy two key properties directly across Main Street.
Ciminelli has put the EPIC building at 1000 Main St. under contract for $2.1 million and is seeking to buy the Salvation Army building next door. Both buildings are across Main Street from the Buffalo Niagara Medical Campus.
The EPIC purchase, expected to close in March, will give the developer a 13,000-square-foot, single-story building on one acre that will face the seven-story Conventus building under construction.
The price for EPIC’s building is three times its assessed value of $740,000, according to city tax records, reflecting the rising value of properties near the burgeoning Medical Campus. The property was recently appraised as close to the sale price, said Dennis Penman, executive vice president for Ciminelli.
The building won’t be redeveloped right away. EPIC – formally Every Person Influences Children Inc. – will lease it back for at least seven years and will continue to occupy the building.
“We’re very excited about this. It’s a great opportunity for us to really focus in on the mission,” said EPIC President Vito J. Borrello. “We are not in the real estate business. Our work is helping families. This is really going to allow us to have someone with the expertise of a Ciminelli managing that building piece while we continue to have all of our programs and partnerships in the building for families.”
Ciminelli is also seeking to negotiate a deal to buy the Salvation Army building and relocate the nonprofit to a new facility elsewhere. The Salvation Army board was “looking at the values in the neighborhood and questioning if it was the right time to monetize that asset given the rising values,” he said.
The developer has no specific plans for either building, but Penman sees both properties as being linked to the Medical Campus and the Conventus building, with the potential for housing and retail space that would support the campus as among likely future uses.
“It’s too early. Until we have real control of the property and can do a master plan, we’ll take slow steps,” he said. “It’s strategic, and certainly leverages the significant investment we’ve already made at Conventus.”
Ciminelli is putting a lot of focus on the Medical Campus, seeking to amass a mixed-use portfolio in the neighborhood. Besides Conventus, Ciminelli also built HighPointe, Kaleida’s new consolidated nursing home on Michigan Avenue on the other side of the campus, and it owns the former Langston Hughes building near the Conventus site.
The $100 million Conventus project at Main and High streets will house clinical, educational and research functions, with direct connections to the soon-to-be-built John R. Oishei Children’s Hospital and University at Buffalo School of Medicine & Biomedical Sciences. The 335,000-square-foot Conventus building is scheduled to be completed in the spring of 2015.
EPIC had been eyeing the activity on the Medical Campus, including the $100 million Conventus project right outside its windows, and wanted to see if it could cash in on its real estate. So it ordered a fresh appraisal of its 13-year-old building and, based on that, reached out to several developers, including Ciminelli.
Similarly, the Salvation Army had been contacted by several developers, including Ciminelli, prompting its leadership to evaluate whether it should sell and relocate or stay in its current facility.
The Salvation Army doesn’t want to sell its building without having a plan for what’s next. So it issued a request-for-proposals to developers in town, seeking to get a new home and some money after the move. Ciminelli responded, was interviewed and is now working out details of a memorandum of understanding about how to proceed, Penman said.
“We are still a long way off in making a decision,” said Thomas Applin, the executive director of Salvation Army in Buffalo. “It’s really about finding out if it’s really feasible. We could end up not being able to afford to do anything.”
Both sides stressed that no decision has been made. The agreement, which has not been signed, anticipates researching alternative sites and evaluating the costs of a move but doesn’t assume a purchase yet, Penman said.
However, that’s Ciminelli’s ultimate goal, he added, though the current process alone may take nine to 12 months.
Salvation Army provides a range of social services, including food, disaster relief, assistance for the disabled, outreach to the elderly and ill, and clothing and temporary housing for the homeless. Its four-acre property – which consists of 92,000 square feet in two main buildings, cobbled together from multiple structures over 60 years – extends from Main Street to Pearl Street.
“We are attempting to be good stewards of the resources and investment that the community has made in the Salvation Army in the 130 years that we’ve been serving people in Erie County,” Applin said. “It’s about what’s in the best interests of the people we serve, the community, the mission of the Salvation Army.”