Leaders Consider Using Public Funds on HSBC Tower

12:07 AM, Mar 4, 2013   |    comments
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BUFFALO, N.Y. - Some are wondering whether taxpayers will be picking up the tab to transform the biggest building in Downtown Buffalo.

It appears the owners of the HSBC Tower will be looking for millions of dollars worth of special tax breaks.

The building is 38 stories tall, and sits in in the middle of Downtown Buffalo's flourishing waterfront. But by this time next year, the tower is on pace to lose nearly all of its tenants.

"The last thing we want is a vacant building of that height sitting in the middle of downtown," said New York State Assemblywoman Crystal Peoples-Stokes (D-Buffalo).

So, what to do with it? Its owners have a massive, $75 million-dollar mortgage payment due in two years, and under the current circumstances, it looks like they won't be able to make the payment.

Experts recommended converting the tower from office space into luxury condos, a hotel, or a mix of everything. But such a transformation will probably require tens of millions of public dollars worth of special tax breaks, perhaps similar to $37 million Sabres owner Terry Pegula got for his Harbor Center project.

Buffalo Common Council President Richard Fontana said he is watching closely to see what the owners of the tower are planning.

REPORTER: Do you think taxpayers are going to embrace the idea of public money and tax credits going into this place?

FONTANA: Well, I'm not going to support tax dollars, especially from the city level, going in to build luxury condos. That's not going to happen. I mean, that doesn't happen in Downtown Buffalo. However, if they put together a plan that makes sense for the building, and actually returns dollars to the taxpayers, whether it's a 10-year period or a five-year period payback situation, I'd be willing to definitely look at that situation.

If money is tight locally, some state leaders might support using some of the "Billion to Buffalo" Governor Cuomo pledged, but they'll need to see a plan for the tower first.

"There is no specificity yet," Peoples-Stokes said. "And I don't think you can really question whether or not there would be government support for it until you know what the specificity includes. And I think you also have to make sure it includes living wage jobs. If those things come together, and it's the right thing to do, then I could see there being public resources there, absolutely."

New York State Assemblyman Michael Kearns (D-South Buffalo) said the tower is a wonderful investment opportunity for a private sector buyer, and fears the state is too broke to contribute any tax dollars to it.

"When not-for-profits are being cut, hospitals are being cut, school budgets, teachers have to be laid off, yeah, I think taxpayers are going to be very concerned or very worried that we would be investing money in a private entity," Kearns said.

County Executive Mark Poloncarz said he has been speaking with the owners regularly, but that he's "not going to give away the bank" to them. A spokesperson for Buffalo Mayor Byron Brown said the mayor will only get behind a deal that's good for city taxpayers.

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