Savarino Companies

Savarino Aims for Flex Space

Buffalo News

6/23/2009

Savarino Companies wants to put up a pair of "spec" office or light industrial buildings in Buffalo's Lakeside Commerce Park, adding steam to the city's efforts to convert the formerly polluted area into an active business zone, the company confirmed monday.

The Buffalo-based construction and development company plans to erect two separate structures totaling 75,000 square feet, to be located at 200 Ship Canal Parkway, on 5.869 acres of land next to parkland along the Union Ship Canal.

They will be across the canal from the offices of Certainteed and Cobey, two existing companies that have already set up shop in the park.

According to plans for the two-phase project, the new l-shaped steel and masonry buildings will offer "flex" space, able to accommodate multiple office, light industrial, warehouse and distribution tenants.

Both will be one-story buildings, with 34,450 square feet in one and 38,222 square feet in the second, although the exact size and scope "might change a little," said Samuel J. Savarino, President and CEO.

"The purpose of putting them up is to have space for businesses to occupy on a quick basis," he said.

Savarino has been negotiating with the Erie County Industrial Development Agency and the Buffalo Economic Renaissance Corp. to buy the land for $231,000, and he expects to sign the contract this week before the plan goes before the agency's board. an affiliate of Savarino Development Corp will own the land.

He said he does not have any tenants lined up, but isn't worried. the property is located in an Empire Zone and Renewal Community, which brings various tax benefits to the table for both the developer and tenants.

But savarino took it a step further as long as two years ago, applying for and obtaining approval to participate in the State Brownfields Cleanup program.

In exchange for Savarino cleaning up the site, the property will qualify for the same benefits as in an Empire Zone, but without the uncertainty surrounding the future of that program, which expires next year.

He said he and future tenants may tap into some other ECIDA programs, such as loans, but won't need to seek additional tax benefits from the agency.

Still, the incentives mean Savarino can subsidize the rents at below-market rates, probably $7 to $8 per square foot, depending on the tenant.

"That was a bit of a coup for this area and for us, but also for the City," he said. "there are a lot of benefits that accrue, not only for us as developer, but also the tenant. hopefully, that will allow us to attract some tenants that wouldn't normally come."

The buildings will cost about $5 million to $6 million more, not including the cleanup or any specific "build-out" requirements for tenants. He's also spent about $100,000 on legal and other advance work. The architectural design work is being handled by Silvestri Architects PC in Amherst, while Malcolm Pirnie Engineers are performing the environmental and civil engineering work.

He said he hopes to break ground by yearend, but admitted that depends on how long the public comment period and remediation take. "I can't say it won't slide into 2010," he said.



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