Sabres Say HarborCenter Cost Rises to $170M

February 13, 2013 Updated Feb 13, 2013 at 8:31 AM EDT

By James Fink, Buffalo Business First

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Sabres Say HarborCenter Cost Rises to $170M

February 13, 2013 Updated Feb 13, 2013 at 8:31 AM EDT

The development price tag of the HarborCenter project on downtown Buffalo's Webster Block has risen 38 percent, increasing from $123 million to $170 million.

And, at $170 million, the project carries the largest development price tag for any private sector-funded building in Buffalo's history.

HarborCenter, a project being driven by the Buffalo Sabres, will feature twin ice rinks, a 200-room hotel plus a smattering of retail and restaurant space along with nearly 850 indoor parking spaces. The project is set for the Webster Block - a nearly two-acre, 300-car surface parking lot that sits just across Perry Street from First Niagara Center.

It is located within the 20-acre Canalside footprint and is expected to attract more than 500,000 people annually when it opens in September 2014.

"We look at this as a community asset," said Cliff Benson, Buffalo Sabres' chief development officer and HarborCenter pointman. "This is not something you would normally do as a project venture."

Sabres' owner Terry Pegula and his wife, Kim, are underwriting HarborCenter's development.

A number of factors contributed to HarborCenter's development costs ballooning, including environmental remediation and the cost of the indoor parking.

"The project morphed quite a bit," Benson said. "The reality is, it is a difficult space to work with. Structurally, it is a very complex parcel to build on."

The increased development price tag came to light following a Buffalo Planning Board meeting on Tuesday morning. Sabres officials presented a project overview to the board. The planning board, among its actions, approved a land disposition agreement that will allow for slivers of Washington, Main and Perry streets to be "abandoned" for a portion of the project. All three streets will remain open to traffic, with only parking lanes abandoned.

The Buffalo Common Council, when it meets on Feb. 19, is expected to approve the measure.

For construction to start by March 1, the next week is a critical one for the Sabres and HarborCenter team. Formal approvals must be granted by the Erie Canal Harbor Development Corp. and the Buffalo Common Council. A series of sales tax breaks - worth about $2 million annually over a 10-year period - must also be approved by the Erie County Industrial Development Agency's directors when they meet on Feb. 19. The ECIDA's policy committee, Monday, approved the request by a 6-0 count with a Feb. 15 public hearing on the incentive package.

Benson said the Buffalo Planning Board's okay was one of several key approvals needed.

"It is another step in a long process," Benson said. "Any delays could really hurt us."

HarborCenter will be anchored by the twin rinks - one with an 1,800-seat capacity and the other with a 150-seat capacity. The rinks will be on the building's sixth floor with the parking ramp occupying much of the first five floors. The project's Main Street frontage will also house 10,000-square-feet of retail while facing Washington Street will be a two-level, 13,000-square-foot themed restaurant.

The hotel will begin on the seventh floor.

The entire structure will have 12 floors.

The Sabres were selected as site developer last August following an RFP process that Buffalo Mayor Byron Brown initiated in April 2012. Prominent developer Carl Paladino also submitted a bid that was centered on a hotel and Class A office space.

While there has been strong community support for the project, especially with its transformative ripple effect on Canalside and downtown Buffalo, at least one neighboring business owner, John McKendry from High-Temp Fabrication, has concerns about the impact it will have on his firm and the nearby Cobblestone District.

"It will constrict the movement in an area that's already jammed," McKendry said. "I think the Sabres are trying to do too much in too small of a space."

Sabres officials said that is not the case.

The rinks are designed for community activities, youth hockey programs and, possibly NCAA Division I hockey. Canisius College is rumored to be interested in making HarborCenter its home rink.

The Sabres and other NHL teams will only use the rinks when First Niagara Center is not available because of a lacrosse game, concert or other special event.

"This is not a Sabres' practice facility," said Terrance Gilbride, a Hodgson Russ partner and HarborCenter council. "There is no locker room dedicated for the Sabres. That was intentional."

Populous, a prominent sports venue architectural firm, designed HarborCenter. Separately, the Kansas City firm will also be doing renovation work on Ralph Wilson Stadium, home of the Buffalo Bills.

Benson said the Sabres organization is fully dedicated to seeing HarborCenter built and succeed. If developed, as advertised, it will serve as major magnet for Canalside and Buffalo. The Sabres envision it being a key destination for youth and amateur hockey tournaments. New and expanded tournaments would help fill hotel rooms, restaurants and retail destinations through-out the region.

"It would help make Canalside a 12-month, year round destination," Benson said. "To me, this is all about helping to pump up the waterfront."

The rinks, restaurant and retail shops are slated to open by September 2014, with the hotel set to welcome its first guest by May 2015.

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