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The Buffalo Urban Development Corp. has approved a $750,000 loan to TM Montante Development’s Elm/Michigan Holdings LLC to help finance the $8.1 million mixed-use project to redevelop the long-vacant Planing Mill Building into residential and commercial space.

Montante will use the money, the first loan awarded through the Buffalo Building Reuse Project Loan Program, to convert the 43,500-square-foot former E.M. Hager & Sons lumber mill – later the Spaghetti Warehouse restaurant – at 141 Elm St. into 22 residential apartments and 10,800 square feet of first-floor office space, to be occupied by engineering firm C&S Companies. The project, which will encompass solar power, is expected to be completed by the end of the year..

Officials hope to roll out a second request-for-proposals process shortly for another loan, using $3 million in state “City-by-City” funding that was allocated to the loan program to assist redevelopment efforts.