For now, HSBC will keep some tower space

October 24, 2013 Updated Oct 24, 2013 at 8:48 AM EDT

By Allissa Kline, Buffalo Business First Reporter


For now, HSBC will keep some tower space

October 24, 2013 Updated Oct 24, 2013 at 8:48 AM EDT

HSBC Bank USA N.A. won't completely vacate the soon-to-be former One HSBC Center when its long-standing lease expires Oct. 31.

Spokesperson Neil Brazil said HSBC "will continue to rent a small amount of space within the building for a period of time" as it shifts operations to two existing bank facilities - one in Buffalo and one in Depew.

But how much space and for how long remain unknown. Those details haven't been finalized, according to Steve Fitzmaurice, chief operating officer of Seneca One Realty LLC, which owns the 38-story tower.

"It's something that's in negotiation, so I can't comment on it," Fitzmaurice said.

HSBC - and its predecessor, Marine Midland Bank - anchored the 42-year-old tower for four decades, at one time occupying 22 floors and housing several thousand workers in the building at the foot of Main Street. But the bank's local presence has changed in recent years.

In 2012, it sold 195 retail branches in Upstate New York and shifted its regional focus to commercial and international banking. It is currently investing $35 million to rehabilitate and refurbish the HSBC Atrium on Washington Street and the bank's Walden Avenue office in Depew.

Now, the 2,000 people who most recently worked at the tower are relocating to those two sites, where they will handle commercial banking, human resources, legal, risk and compliance, human resources, securities and IT operations.

The tower, meanwhile, faces an uncertain future. In addition to HSBC, key tenant Phillips Lytle LLP is scheduled to move out of the building in mid-November, further reducing the occupancy rate, which is expected to fall to 5 percent in January.

Financially, Seneca One Realty is facing a $75 million balloon payment to its lenders in February 2015. The Urban Land Institute has suggested mixed-use development for the site.

By the end of the month, the building's name should be officially changed from One HSBC Center to One Seneca Tower. The Buffalo Common Council has okayed the switch, which now awaits Mayor Byron Brown's approval, Fitzmaurice said.