Developer Rocco Termini believes the City can and should do more to promote downtown development and even suggests going as far as using eminent domain to make it happen.
Eminent domain is the right, granted by the Takings Clause of the Fifth Amendment to the Constitution, of a government to seize private property and turn it to public use after paying “just compensation.” City and state officials have traditionally used eminent domain to acquire privately owned property for public goods such as highways, public facilities or sports arenas.
Use of eminent domain has grown as it is frequently being used to acquire private property to benefit other private individuals, namely developers. In 2005, the U.S. Supreme Court upheld government’s right to take private property for private redevelopment in the Kelo v. New London case.
In New London, the City pushed plans to replace homes with a private commercial development, arguing that the new development would improve the community’s well-being. According to the City, the jobs, expanded tax base and revenue provided a public benefit justifying the use of eminent domain. The Supreme Court agreed ruling that eminent domain is a legitimate tool for communities interested in revitalizing themselves.
Wherever proposed, taking private property for economic development purposes is sure to set off a firestorm of protest amongst private property rights advocates and concerned citizens. Termini sees eminent domain to acquire and assemble blighted sites as justified in certain situations with proper planning and judgment.
“We tried to do the 500 block [of Main Street], but with 14 owners, they are never going to agree to anything,” he says. “It’s just impossible.”
And that means dollars.
“Cities elsewhere are putting dollars into downtown development,” he says. “It hasn’t been happening in Buffalo.”
That may be changing. Termini is requesting City financial assistance to complete the funding package for two ambitious projects in the heart of downtown- redevelopment of the AM&A’s department store and Lafayette Hotel properties.
In his State of the City address, Mayor Brown proposed using $10 million of the City’s surplus for economic development and quality-of-life programs. Termini believes that the AM&As and Lafayette Hotel projects are regionally significant and key to downtown’s future.
Plans for the vacant department store include underground parking, a first floor food court, second and third floor office space, a 117 room hotel that is expected to be a Hilton Garden Inn, 28 market-rate senior independent living apartments, and 52 upscale apartments on the top five floors
The nearby Lafayette Hotel would be transformed into approximately 110 market-rate apartments, refurbished hotel rooms on the second floor, and banquet facilities on the building’s main floor. Architectural firm Carmina Wood Morris is designing the reuse plans for both properties.
“They will transform two blocks of downtown bringing 500 people to that condensed area,” explains Termini. “It’ll produce what we’ve all tried to do- create critical mass downtown.”
Termini is seeking $5.5 million in City financial help to complete the financing package for the projects. With the City facing a multi-million dollar deficit next year, the Mayor’s idea of tapping reserve funds for economic development projects may be a non-starter. Termini says there are other funding sources the City has access to such as New Market Tax credits and says the New York Power Authority settlement funds should be spent throughout downtown and not just at the foot of Main Street.
With the Historic Preservation Tax Credit law changes needed to make the projects feasible progressing, the last significant hurdle appears to be the gap financing. He is waiting for a response to his request for funding.
“We’re asking for $5.5 million,” he says. “That’s four percent of the $120 million project cost.”
“The time is right to redevelop these two significant downtown properties. What’s the alternative? Have the Lafayette continue as a flophouse and the department store remain vacant?”