The building is available, as is the gymnasium in between this and the Squire mansion.

The neighborhood is lucky Tracy Diina was executive director of Literacy Volunteers when they were looking for a new location. They moved to the Squire Mansion from Delaware Avenue across from Target. Their landlord (Plaza Group/Ron Alsheimer, a good landlord) wanted to retain them, made them good offers. Tracy's attraction to the building and location made the project pencil out for Cash to do (as did the historic tax credits). But many organizations, particularly ones with high percentages of female employees, blanch at going into a 'transitional' neighborhood from a relatively secure one like Delaware Ave near Kenmore. Kudos to Tracy and the Board and staff of Literacy Volunteers for becoming an anchor for this campus.

Larry Regan had the St. Vincent's orphanage under contract prior to the Packard building. The unknown costs of rehab required to qualify for historic tax credits made the project too uncertain in Regan's eyes. So he switched focus from the orphanage to the Packard building. That said, I showed him buildings throughout Buffalo. He saw a lot of product. He liked Main Street. He liked the direction the area is going for the long haul. He retains control of his projects for long terms and looks to invest in areas which will support market rate conversions as the subsidy periods someday expire.

St. Vincents is for sale, as is the gymnasium. Contract price when Regan had the orphanage under contract was $850,000, I believe.

Another broker (I believe Tony D'Auria of Waterborne) had this under contract prior to Regan for lease to the Maritime Charter School. Back then (six years ago?) the cost of rehab of St. Vincent's for that project was $4m (without any acquisition cost, and with the condition that the building's previous use was as a school as recently as the early 1980s). Cash was unable to secure financing to complete the deal (Maritime didn't have funding to buy; they lease). Bankers weren't willing to take the risk.

Cash was never willing to give it away for nothing. That rumor is my fault. I led David Torke astray. Cash told me he was willing to 'give it away'. But I thought Cash was being literal (I have facilitated building donations and fire sales before). Cash's definition of 'giving it away' and literally donating it are quite different. Asking price is the contract price he had from Regan. Make offer if interested.

Happy to arrange a tour for any group seriously contemplating interesting rehab project. My opinion is that this is a condo conversion. One classroom per condo, roughly 1000' per unit, 26 units, I think. Cash and I were ballparking the costs of doing the shell and common areas and roughing in all the mechanicals, but without adding costs of any build out within the units themselves. Let's say the roof and windows and plumbing hookups and rough electrical service and HVAC were brought to each unit. Our guesstimate is that a developer would have $75k/unit into the project just from the shell and common areas before any interior work was done on the individual units. Bathrooms, kitchen, bedrooms, electrical distribution within the unit, walls, floors, etc. would not be included in that cost.

So how much do they have to sell for to pencil out? How much would it cost to complete the insides?

My dream scenario is that a group of progressive contractors and architect (plumbing, HVAC, electrical, roofer, drywall, etc.) form their own little development corporation to tackle a project here and there such as this. The problem is most of those guys are too busy to bother. They make enough money concentrating on doing what they do best.

But this is also a candidate for a homegrown real estate investment trust (REIT). A REIT is a company whose stock is invested in real estate. Get a group of individuals who would like to take on the build out of own condos from the get go, and who are willing to invest in the shell now. Buy the building and secure it, bring in the mechanicals for everyone. Individual owners would then be responsible for finishing the units. Everybody gets to do do their own custom work. People can go high end or bare bones as their budget allows. You pay for your unit now; customize it over the next several years.

The trouble with this is financing, as none of the units would be habitable until done. So it's a great opportunity if you and a lot of similar minded folks happen to have a spare $75k laying around that you don't need to do anything with, plus all your build out costs. But maybe creative financing could be developed in conjunction with local foundations. Maybe foundations might be willing to bear the shell financing costs and then sell the individual units to buyers as they arrange for completion of their unit's work. It's a stretch, but I could see benefits for an arrangement such as this.

Anyone wanting a tour of the place is welcome to email me. Happy to organize a showing.

Steel:

I don't know that Cash will reject any reasonable offer. General advice to anyone: always offer a purchase price that you would be willing to pay. Forget the asking price. Pretend it doesn't exist. Always. Whenever you want to buy some commercial real estate, offer whatever it is worth to YOU. Don't worry about hurting someone's feelings. The worst the seller can say is 'no'.

As it happened, the sale of the Packard building did not fully get Cash out from under the liens he had against that building--he had to put some money into the deal. I don't think Cash has the cash to invest in the roof, windows, etc. even if he were so inclined. But yes, in general I would agree with you.

In 1950, Fortune magazine did a cover story on Buffalo. We ranked 15th largest metropolitan area in America and the 11th largest manufacturing center. Our wages and union densities were highest in the nation, if I remember the article correctly (it was reprinted or otherwise broadly referenced a few years ago by I forget who, Maybe Mark Goldman in one of his books?)

Wage and operating costs, including taxes, drove many corporations to exit Buffalo. Curtis Wright, National Gypsum, I forget the litany of home grown successes which relocated to cheaper California or Dallas or wherever. However, one cannot discount other natural forces at work:

- the Welland canal made it feasible to ship directly from the Great Lakes to the high seas with no expense related to inter-modal transfers of goods. Goodbye shipping industry.

-The railroads, another Buffalo strength, declined as the federal government subsidized the development of highways and air travel became affordable.

-Air conditioning made the South livable in the summertime and that made getting away from the harsh winters possible.

-The steel industry was strong and it's gone (virtually). Bethlehem located in Buffalo as I understand it because shipping costs for the coal, iron ore and finished products were cheap here because of our geographic location and shipping infrastructure. We had capacity to handle ships and we had the railroads. We were close, from a shipping standpoint, to the raw materials and markets for the product. Time, wages and lack of innovation doomed the industry. The American steel industry failed to innovate when granted periodic trade protection. Japan installed its first basic oxygen furnaces in 1964. We did in 1980. Steel failed not just in Lackawanna, but all over America as many nations subsidized their own steel industries and foreign companies outpaced our innovations. Wages were a factor. So was management.

-The south and west had cheap labor relative to the rust belt, and certainly cheaper corporate and personal taxes. This appealed to many captains of industry. Those who stayed to fight it out found themselves on uneven footing with regard to expenses of production.

-Overseas worldwide development ate into many of the niches we had carved for our economy, locally and nationally.

There were many forces at work which contributed to our burgh's decline. But the future is full of unpredictable forces, too. We sit atop lots of fresh water. We inherit a legacy of architecture relatively rare in the increasingly vanilla metro areas of most cities. We feature green energy potential. Where you live seems less important in a connected world. We don't feature many traffic jams, but on the other hand heating your house in winter is a lot more expensive than cooling a Southern home in the summer.

It's hard to see how the future will play out. High energy and government costs may doom us. But it's also darkest before the dawn. Sometimes places get hot just because it feels good to enough people. I wonder what Buffalo will be like in 50 years.

Regarding St. Vincents, however, I like the idea of making it an office condo project. You'd still need a roof, elevator, common areas, plumbing (though less of it), electrical, HVAC. You'd still have costs. But it could be attractive. It might appeal to those who'd rather own their office space than rent. It would be interesting to see the interest level and expense of something like this.

But I also don't think the day is far off that this is a desirable location for residential units. I'm bullish on Main in general. Public transportation and living close to your job will likely become increasingly attractive in an era of expensive energy. Linwood is one block away. There is positive development east of Main near here.

I think in five to ten years, a driver will be able to travel on Main Street from the Amherst border down to Shea's and feel good about the trip the whole time. When that day dawns, and I think it's fairly close, the image of the city in the eyes of many suburbanites will change markedly for the better. Main Street will make a difference.

Pegger, blackrocklifer:

Unions began for valid reasons and gave the working class real voice. Some corporate captains will steal every cent if they're allowed (see Enron). The trend of the rich getting richer while the majority see income erode is a serious problem that I think society is failing to address.

But still, unions got out of control. Kudos to the UAW and others for transforming themselves into partners with management. In some sectors, though, unions are still out of touch.

Though union membership is down, it's not so much because people left their unions, but rather because union jobs vanished due to competition. Where unions remain strong is government. Unlike private industry, government doesn't face the same competitive set of forces. Costs associated with union contracts fostered by government, such as in construction ('prevailing wage') and public administration (Taylor Law) exert an inordinate influence on our cost of living. Even if a minority are unionized, the influence of unions in New York is out sized.

There are other governmental costs and costs of doing business having nothing to do with unions. Whether or not one supports unions, it seems indisputable that the cost of doing business in NYS is demonstrably higher than areas experiencing greater growth. If not unions, what is the core of the problem? Why are costs here higher?

Thanks to several for the kind comments.