on July 28, 2014 - 12:01 AM
, updated July 28, 2014 at 3:51 PM
First of a three-part series
More than a decade after its creation, the Buffalo Niagara Medical Campus is reviving a large swath of urban Buffalo, breeding $400 million in private development outside the campus.
In the past five years, a Buffalo News real estate analysis found, 30 different investors and developers bought or renovated more than 100 largely vacant or run-down commercial properties outside the campus boundaries.
They spent more than $41 million to buy the properties, mostly along the Metro Rail transit line and on nearby streets. The News found they are expected to spend nearly nine times that amount – estimated at more than $350 million – to fix up their new buildings and lots.
The development effectively extends the medical corridor along Buffalo’s Main Street as far north as Hertel Avenue and as far south as William Street.
It is also creating new wealth – an important piece for Buffalo’s economic revival – and making winners of a small group of real estate investors who bet that the medical corridor would take off as promoted. And it promises much-needed cash for City Hall through increased property taxes on these improved properties – many being developed without property tax breaks.
Perhaps more fundamental: The city’s east-west demarcation line – the “right and wrong side of the tracks,” so to speak – may be shifting east, or at least getting a bit fuzzy. If developers are right, it will even be trendy one day to live and work on the eastern side of Main Street and along some side streets heading toward Michigan Avenue and even farther east toward Jefferson. Investors and developers, The News found, have started buying residential properties in the city’s Fruit Belt and other East Side streets within a walk or Metro Rail ride to the Medical Campus.
“I have a vision,” said developer Dennis M. Penman, an executive vice president with Ciminelli Real Estate Corp., “of the double yellow line on Main Street being erased.”
Buffalo’s East Side isn’t about to become the new Allentown or Elmwood Village. But as the West Side and even North Buffalo neighborhoods become pricey, the near East Side – marred in recent decades by crime and poverty – could return as a healthy area of commercial and residential activity, developers say.
“Within the next 10 years,” Penman predicted, when asked when the Medical Campus spinoff will start transforming the near East Side.
Hard to believe? Not so, says Penman.
“Whoever thought Harlem would become a real estate mecca?” he said, referring to the boom in the once-dismissed Manhattan neighborhood.
The Medical Campus is only 13 years old, created in 2001 to turbocharge the health care industry in Buffalo. The campus itself – 30 square blocks abutting the northern edge of downtown Buffalo – began as the longtime home of Buffalo General Hospital and Roswell Park Cancer Institute. Since then, the Gates Vascular Institute has opened; the seven-story Conventus medical office building, 11-story Roswell Park Clinical Sciences Center and new University at Buffalo medical school are under construction; and work is about to begin on the new John R. O’Shei Children’s Hospital.
By 2017, 17,000 to 20,000 people are expected to work and attend school on the Medical Campus, compared with 12,000 today – and that is driving much of the private development near the campus.
Up and down Main Street, which forms the western border of the Medical Campus, private developers are building and renovating housing, stores and office space. To accommodate the new employees, Medical Campus planners estimate that an additional 500 new homes are needed in the area in the short-term, and as many as 2,000 homes by 2020.
So far, The News estimates, 120 new apartments have been built, 100 more will be available soon and at least 300 existing apartments are being renovated with the Medical Campus in mind.
All this has the potential to lift the entire city, said Robert G. Shibley, director of the University at Buffalo’s Regional Institute. “This kind of activity is a game-changer for the downtown and, as such, will be a big lift for the region,” Shibley said. “As the saying goes, there are virtually no really good regions without a great downtown.”
Nick Sinatra, a former Bush administration aide, is using investment backing from the Hyatt Hotel fortune to buy and convert often run-down properties into high-end apartments. Sinatra, whose family owns Sinatra’s restaurant on Kenmore Avenue, didn’t get into the game early. But he has quickly become a player.
“The guys that bought land before, good for them, they will make money,” he says. “But that doesn’t mean because I paid more I’m not going to make money. The market has moved. It has gone up. Land is worth more and rents are higher.”
Said Sinatra of the Medical Campus and its spin-off development: “It’s the most exciting thing to happen in 30 years.”
Buffalo News reporter Susan Schulman contributed to this article.