Three local development companies submitted plans to redevelop the former Millard Fillmore Hospital site at Gates Circle, and the smallest won.
Kaleida Health’s top executive said TM Montante Development was selected because it could close the deal within 30 days and had a partner in Canterbury Woods, with a successful business model, willing to invest $28 million to make the project work.
That model, a high-end continuing care community, has been successful in Amherst, where it continues to add space. But Canterbury Woods CEO Rob Wallace said many potential residents do not want to leave Buffalo, so building on one of the city’s most attractive streets was very appealing.
And Kaleida wanted a plan that had a significant chance of success, would benefit the community and also could move quickly to release Kaleida from future responsibility, said James R. Kaskie, Kaleida president and CEO.
The deal is scheduled to close Dec. 20.
“We were looking for a noncontingency transaction, to close by year-end, with no liability or holdover,” he said. “We should be able to pass along the keys.”
All three mixed-use proposals – by TM Montante, Uniland Development Co. and Benderson Development Co. – were dominated primarily by residential components. Uniland and Benderson have very strong track records of completing major projects throughout Western New York.
But while their concepts “were very good plans, they were unfolding plans” versus “a proposal that involves a developer with a sizable reputation and a lead tenant with a checkbook ready to make the investment,” Kaskie said.
The inclusion of Canterbury Woods gave Montante’s proposal the edge over its much bigger rivals.
Montante’s proposal involves razing the 10-story main building on the Gates Circle campus and replacing it with a $28 million Canterbury Woods satellite facility that would anchor the entire project, with 50 to 55 senior citizen living units. The demolition work would be handled and paid for by Montante’s partner in the project, Frontier Industrial Corp.
The surgical center behind the main building would also be demolished, and Lancaster Avenue would be extended through the site to Linwood Avenue. Along that new section of Lancaster Avenue, on the main campus and on a site across Linwood, a $35 million mixture of retail, offices, market-rate rental apartments, condominiums and townhomes would be built. Other amenities could include a health and wellness center and a small grocery store.
“We’re getting a lot of calls where people are interested in being in this location,” said J. Timothy Vaeth, president of TM Montante. “We didn’t want to become this little village unto itself. We wanted to extend the neighborhood.”
Vaeth noted that the project will likely be phased in over five to seven years, depending on demand, and could be expanded or modified as needed to squeeze in more units. That includes possibly going higher than the three to four stories currently depicted on renderings.
“We have such a great potential to add density, not only on the site, but in other buildings and across from it.” Vaeth said. “This is not something that has to be done all at once. But we’re putting that goal out there to drive density to the site.”
The residential development could ultimately involve as many as 500 units, although Vaeth was not precise about how many he envisioned. That could make this the largest such development in the City of Buffalo in many decades, and perhaps even a century.
“As far as a single investment in one location, it’s historic,” said Joseph S. Janowski Jr., a commercial real estate broker specializing in multifamily housing. “There’s probably going to be demand for it. I think it’s terrific.”
The project also calls for a pavilion and outdoor green space. And Vaeth said officials hope the city will reopen the 900-space parking ramp next to the site, while the group will also consider putting in “below-grade” parking.
Officials have already started meeting with local residents and businesses to collect their input. “This is a conceptual master plan,” Vaeth said. “The chances of this being built exactly as is (shown) is slim.”
However, it’s the Canterbury Woods portion that is most intriguing for many.
Vaeth said that once the deed is transferred Dec. 20, the new owners will immediately initiate the environmental review process and begin consultations and design work over the next six months. That includes traffic, noise and wind studies, and an examination of utilities coming into the site. Detailed plans would follow, but not necessarily all at the same time. Canterbury Woods also needs state approval.
Demolition work could begin by late spring or early summer, followed by about 18 months of construction work, with the first new residents able to move in by late 2015 or early 2016.
In the meantime, both Montante and Canterbury Woods will also set up offices nearby to handle maintenance, concerns and sales. “We want to be good neighbors,” Vaeth said. “We’re not going to manage this from the suburbs.”
Canterbury Woods will finance its project through a mixture of its own money and a short-term bank loan. Vaeth said Montante has already started talking with lenders and other institutions for financing, and also has “a large group” of private equity and debt investors available.
Additionally, Montante and Canterbury Woods said they will pursue standard tax incentives – including brownfields cleanup and historic rehabilitation credits – available from the state and Erie County Industrial Development Agency. “Anything that’s available, we’ll go after,” Vaeth said, but “I’m not going to go do something creative in front of the ECIDA.”