A well-known adage in real estate development is “the greater the risk, the greater the return.” This is certainly the case for 500 Seneca, a mixed-use project involving the adaptive re-use of a 320,000-square foot, century-old factory building in a blighted neighborhood in Buffalo, NY. In redeveloping 500 Seneca, a partnership of the Savarino Companies and Frontier Development Initiatives took a great number of risks and overcame a variety of obstacles to transform a historically significant, neglected building into an award-winning, fully-occupied one.
At a cost of more than $44 million, Savarino and Frontier converted the former manufacturing complex into 97 market rate apartments and 130,000 SF of commercial space. Combining the historic with the latest trends and amenities in its plan for the property, the developers transformed a deteriorated building into a vibrant mix of retail, commercial and residential space. The site’s age and condition permitted the use of historic and brownfield rehabilitation tax credit financing, in addition to traditional financing tools. Despite its challenges, 500 Seneca was so well-received that it leased up within eight months of completion.
The success of 500 Seneca has spurred plans for the subsequent redevelopment of other former industrial buildings in the surrounding neighborhood. The developers’ unique use of a Payment In Lieu of Taxes (PILOT) Increment Financing (PIF) tool to finance surrounding streetscape improvements has brought further benefits to the neighborhood and to the city as a whole.