Savarino Companies

ESD to Make Big Move to a Smaller Space

The Buffalo News

12/4/2008

When the Empire State Development Corp. relocates its Upstate operations to new Buffalo offices next month, it will utilize just half the space it originally planned to occupy.

Upstate ESD President Dennis Mullen confirmed Wednesday the economic development agency will occupy the fifth floor at 95 Perry St. and will sublease the fourth floor.

"The world has changed dramatically since we signed our lease in 2007," Mullen said. "There's a new administration in Albany, a new ESD chairman, a new Upstate president and the economy is struggling in ways we couldn't have imagined."

In November 2007, ESD announced it had signed a lease for 30,000-square-feet of yet-to-be-renovated office space in an idle warehouse in Buffalo's Cobblestone District. The agency was expected to make its move by mid-2008, becoming the first tenant in the new mixed-use complex.

But the intervening 13 months have brought major structural and personnel changes to ESD - a domino effect that started with the resignation of Eliot Spitzer as governor and continued as his successor, David Paterson, has reshaped the agency, appointing M&T Bank Chairman Robert J. Wilmers as chairman and Mullen as Upstate economic development czar.

That overhaul also caused ESD to rethink its space needs. At the time the lease was signed, the Buffalo office was expected to grow to 55 staffers by move-in day - it currently has 40 employees.

The 10-year lease also assumed one or more local development agencies would "co-locate" to the Perry Street building, filling at least 5,000-square-feet on the fourth floor. While the Erie County Industrial Development Agency did weigh the idea of bunking in ESD, it decided to stay put on Oak Street.

"It's been a work in progress," Mullen said regarding space decisions and timing of the move. "I can tell you now we'll occupy 15,000-square-feet and will be fully moved by Jan. 15."

Among the 40 state employees making the move from the Liberty Building to Perry Street will be Upstate ESD headquarters staff, workers assigned to the Erie Canal Harbor Development Corp., plus legal, communications and information technology employees whose duties serve all seven Upstate offices.

Sam Savarino, who co-developed the dormant warehouse to a mix of office, residential and commercial space, said he is pleased the agency is ready to make the move.

"We're pleased they will abide by their lease for the two floors and look forward to having them as tenants," Savarino said.

"There is a clause in their contract which allows them to sub-lease the fourth floor and we are aware of strong interest by some potential tenants, so this should work out well for everybody," he added.

ESD's freshly-constructed offices, which include a state-of-the- art, tele-conference room, have been move-in ready and furnished to agency specifications since late September, according to Savarino.

Meanwhile, crews have been busy building out the building's third floor and a portion of the second for Watts Architecture & Engineering PC. That company will relocate its 70 staffers from Eggertsville to the Cobblestone District in February.

Build-out continues on five, two-bedroom apartments on the second floor. Winsoft, a Canadian software firm will be located on the first floor, along with a coffee/wine bar and fitness center.

"We should have all that completed and everybody in by March," Savarino said. "The only open piece is the restaurant and we should have that leased and built-out before too long."

The 8,000-square-foot restaurant space will be located at the corner of Perry and Mississippi streets.

Savarino and Chris Jacobs of Avalon Development purchased the five-story warehouse in 2005 as part of a redevelopment project that included four dilapidated buildings along Mississippi Street, between Perry Street and South Park Avenue.

Those redone sites are now home to Savarino's development and construction company, several small financial and communications firms, and W. J. Morrissey's Irish Pub and Restaurant. Benchwarmer's Sports Bar & Grill will join the line-up as soon as its liquor license is finalized.

by Sharon Linstedt



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