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IT Hub and IBM Heading to Key Center

The south tower of Key Center will not be empty very long after Delaware North Cos. relocates its headquarters to 250 Delaware Avenue in late-2015.  The State has selected Key Center as the site of the Buffalo IT Innovation and Commercialization Hub which IBM has agreed to anchor with 500 new jobs.

New York State’s Fort Schuyler Management Corporation (FSMC) is working with McGuire Development Company to develop the new site.  Seven property owners submitted proposals for the project in downtown and the Larkin District. The state will buy the south tower’s office space as a commercial condominium.

According to the request for proposals released in April, the facility needs 100,000 contiguous square feet that must be made available for completion of the entirety of its improvements as soon as possible but no later than October 1, 2015.  The property must also be able to accommodate between 50,000 and 100,000 square feet of expansion space for purchase by FSMC.  That times nicely with Delaware North’s move that threatened to leave a significant block of office space vacant.

The seven properties considered for the Hub according to The News were:

Other buildings whose owners responded to the bidding request included the Bank of America Building at Fountain Plaza, Main Place Liberty Group’s Main Place Mall and Tower, Uniland Development Co.’s 250 Delaware, Krog Corp.’s 701 Seneca, Krog’s Trico Building and Savarino Cos.’ 500 Seneca, according to sources with knowledge of the selection process.


There are no details on where an interim Hub will locate.  From the RFP:

If the proposed property is unable to accommodate the full 100,000 sq.ft. by November 1, 2014, but will be able to accommodate the Facility within a reasonable timeframe after that date, FSMC may be willing to enter into a short-term lease for 25,000 contiguous sq.ft. of office space made available to it no later than June 1, 2014.

Key Center currently has vacant office space including 30,000 sq.ft split between each tower’s third floor and 15,000 sq.ft. on the 14th floor of the north tower.  So does the adjacent Bank of America building also owned by Key Success LLC.  Both properties are managed by Ciminelli Real Estate Corp. for the downstate owners.

Written by WCPerspective


Buffalo and development junkie currently exiled in California.

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  • PaulJoseph1

    I hope a large illuminated IBM logo will be placed on all four sides of south tower to advertise Buffalo’s continuing growth.

  • rubagreta1

    I’m curious what the Buffalo office vacancy rate would be if you excluded One Seneca.
    As far as I’m concerned, that 1980 dinosaur is not really on the market because there is no demand for it (there are no big tenants that would take a large number of floors, nobody is going to lease one floor when the rest of the building is vacant, and it requires an incredibly expensive top-to-bottom renovation.

  • flexme

    1972 Dinosaur

  • costrander08

    PaulJoseph1 I was thinking the same thing

  • KevinRyan1

    rubagreta1  I’m thinking nobody is willing to commit to this building due to the foreclosure proceedings…once it goes though this process ..Hopefully it will realign itself to the market demand…It seems that mixed use would be the best use.. condos, hotel, retail and offices …so that they don’t pillage other buildings downtown.. once this building is occupied again I will truly believe that Buffalo is on its way back…We are on the right path.

  • le80

    PaulJoseph1 Agreed, and replace the neon with something a bit more “classy”.

  • schvanstuchen

    le80 PaulJoseph1 I believe they are saying the signage would be in addition to the neon. The neon really isn’t signage, rather it is a design element for the building.

  • Fly Street

    BOOM!!!  Stuff just got real…downtown!  Folks: it is happening… hang on its going to be a fun ride!

  • JayDBuffalo

    le80 PaulJoseph1 
    I dont mind the neon.  I actually wish more buildings had lighting on the rooftops.

  • flexme

    Change the neon from green to blue

  • costrander08

    schvanstuchen le80 PaulJoseph1 
    I’m cool with the neon, I’d just like to see more hotel and business flags on the buildings in the city. To evoke the “you see it in other cities” mantra, it gives off the impression that the buildings are bustling and that people and companies want to be here. Like Paul said, it serves to advertise growth.

  • JayDBuffalo

    Ill agree to that

  • PaulJoseph1

    costrander08 schvanstuchen le80 PaulJoseph1 I think the neon on Key looks cool too. It shows off the pyramid shaped roof line and looks impressive driving into downtown at night.
    I’d really like to see more LED lighting on some of the older building to show off all the architectural details at night,  it may even promote more foot traffic downtown at night. The Lafayette Hotel would be a stunner if it were all lit up.

  • tjhorner1

    JayDBuffalo le80 PaulJoseph1 Count me in on keeping the neon, and branding the building IBM (Although I’d bet that as part of Key Bank’s lease, building branding is included….)

  • elias already exists

    the big issue i have with this whole deal (besides 500 jobs not really being created) is the fact that the state is using $15,000,000 worth of tax dollars to purchase real estate to house a private sector business. That has the aroma of something unamerican. yes, i know, a football stadium paid by tax dollars, blah blah…does anyone else have an issue the way your tax dollars are being spent in this deal? Anyone else feel that any level of governments should not be in the real estate business, beyond housing public sector business? Someone please explain the importance of NYS government owning real estate to house IBM, and why IBM could not lease the space from the owners of Key Center themselves.

  • LouisTully

    So is this in any way an attempt to get the Key Building owner to shut up and stop crying?
    I know the courts ruled against him – as I recall most recently – but will this put an end to the suit against DNC, Uniland, and ECIDA?

  • GotAnyChange

    It’s also good exposure for the companies. You used to see obnoxious signs all over ye Olde buffalo. Tacky maybe but it gave the city an entrepreneurial spirit.

  • saltecks

    elias already exists This format is based on the very success center for Nano Technology in Albany  which has made  Albany one of the primary Nano Tech centers in the world.  NYS  will own the  building, and the equipment inside. IBM is the anchor tenant. The first one of hopefully many components that will be attracted to the research facilities. Certain  NYS  govt offices as well as other companies will be. eligible to use the Equipment provided. This will facilitate young start up companies who could not otherwise afford to purchase the necessary equipment on their own.  IBM will pay rent to New York State.

  • saltecks

    Fly Street And according to Business First, TOPS is seriously looking at putting stores in  DT Buffalo and Rochester.

  • sobuffbillsfan

    elias already exists The problem is those are the rules of the game, you don’t have to like them but thats still the rules.  Ricky Perry flies around the country now openly poaching companies with tax breaks, and tries to sell it as job creation.  At least the center of excellence model involves actual innovation, not just handouts.   The games rigged and only getting worse.

  • whateverr

    elias already exists
    ‘does anyone else have an issue the way your tax dollars are being spent in this deal?’
    Yes, me.
    It’s $55 million total actually.  I think $15M for the building plus $40M for equipment.“IBM will add 500 jobs when it moves in.  The hub is being paid for through a $55 million grant as part of the Buffalo Billion initiative.”
    $55M divide by 500 jobs = $110,000 per job in cash from NY state taxpayers.
    Not as much as $260,000 in NYS cash per promised job for the RiverBend par tof ‘Buffalo Billion’, $225M for 850 jobs, so only by comparison I suppose $110k isn’t as bad.
    The ‘Buffalo Billion’ program is very politically smart for Cuomo… use other people’s money to create many of these announcements here where he’s the hero, win Erie County where he embarrassingly lost to Paladino in 2010.
    I’d wonder how popular the program would be with Buffalonians if it instead was a ‘Billion for Rochester’, whose poverty rate is higher than Buffalo’s (31.6% poverty rate in Roch, vs. 30.1% here).
    Or if it were a Billion for… Syracuse (33.6% poverty), or Binghamton (31.2%), Utica (30.1%), …

  • justannotherone

    elias already exists 
     does anyone else have an issue the way your tax dollars are being spent in this deal? 
    I always do but it never seems to matter.  The powers that be are always giving money to businesses and developers.  55mil plus tax free for 10 years? C’mon what do you think they will do in 10 years.   Here’s a clue….Delaware North!   In 10 years they will ask for more or else,  we will go to Texas where they are going to give us XYZ.  Corporations don’t keep their promises no one holds them accountable for their job creation claims etc.  And in the meantime we get to drive on crappy unmaintained roads and pay the bills for suspension repairs and alignments to our cars.

  • Soccerdude5719

    Wait a minute aren’t they getting money from the government? Somebody should sue!

  • saltecks

    whateverr elias already exists Actually,the Fort Schuyler Mgmt Corp, the independent state agency that is making the nanotech investments, has already established installations in other upstate cities including Syracuse and Utica. Buffalo is late to the game. Utica has already experienced  1.5 billion  in addition private investment. Not a bad ROI.

  • whateverr

    ‘Utica has already experienced 1.5 billion in addition private investment. Not a bad ROI.’
    And it isn’t as though Buffalo/WNY never received NYS corp welfare pre-Cuomo/pre-“Billion” either… Geico, Downtown Hyatt, Rich Products on Niagara many times, GM engine plant many times, … very long list.
    No doubt with so many tries made at handing taxpayer $ to private businesses, some will succeed that way with ROI… just as some (Solyndra, One Sunset, etc.) will fail with all taxpayer $ lost … and many fall somewhere in between, and many that succeed would’ve succeeded without public handouts happening **.
    ** = latter is my opinion, not asking you to agree in slightest. I realize from past debates you and I are 180 deg opposed about this topic, so we can just agree to disagree.
    Unlike Rob Astorino’s recent critique of Cuomo’s “Buffalo Billion”, however, I’m not basing my opposition on prediction that any particular project will fail financially – I’ve no idea – but rather that whole concept is misuse of $ that should be instead be spent by NYS govt on problems such as sewage overflows in Buffalo, mental health facility cutbacks under Cuomo, and many other examples I could give.  
    Again, not trying to change your opinion, saltecks, just giving my rebuttal opinion.

  • whateverr

    ‘Somebody should sue!’
    lol, yeah sounds like a dumb waste of anybody’s suing money, but actually people have made serious efforts at trying it not very long ago. 
    One attempt was Mark Goldman & others sued NY state to try stopping this practice when govt $ handouts to Bass Pro seemed likely, pointing to the NY state constitution’s plain wording which directly outlaws spending of NYS govt $ for private businesses.
    Some of the top court’s judges agreed with the plaintifs that the wording means the spending is unconstitutional in NYS, but unfortunately a majority of judges thought up an interpretation to allow it to continue…