OLEAN — City officials are expected to sign off on redeveloping the city center’s tallest structure tonight.
The Common Council will host a public hearing at 6:15 p.m. on a proposal to designate Savarino Companies of Buffalo as a “qualified and eligible sponsor” to redevelop 101 N. Union St. — the former Manufacturers Hanover building.
Savarino officials plan a $13 million redevelopment in the 104-year-old building using $2 million from the 2017 state Downtown Revitalization Initiative award, various development tax breaks and other sources.
The property is owned by the city Urban Renewal Agency, which has searched since 2010 for a developer for the seven-story structure. Under state law, the city must approve the developer for the project, as the city assisted in purchasing the structure.
Under the proposal, Savarino will develop a first-floor restaurant, bar and banquet space, as well as 25 apartments on the upper floors, according to the public hearing announcement. The apartments will remain rental for at least five years and consist of affordable housing under state guidelines.
Originally, a boutique hotel was planned for several floors, as well as high-end apartments on the top floor.
The sale price has not been determined, but is based on a third-party appraisal completed in January. Under that review, the property was appraised at around $34,000, plus an additional $124,000 in cell tower lease revenue.
If approved tonight, the project will not move ahead immediately as several more steps must be taken. A price must be negotiated, and upward of $700,000 of work is needed while the URA owns it.
A new roof and stabilization work is needed, and will rely on a $500,000 grant from the state Office of Parks, Recreation and Historic Preservation and a $200,000 Empire State Development grant in the city’s name. However, as the ESD and Parks grants were awarded to government agencies, the work must be done before the sale.
The deadline for closing on the deal was moved to September from February to accommodate the roof project, as well as to better line up with the acquisition of the neighboring Siegels building. The URA awarded preferred developer status to Savarino for that structure in 2018. The firm plans to turn the lower floor of 107 N. Union St. into a small business co-op incubator in partnership with Olean Business Development with two apartments on the second floor.
The building opened for business as First National Bank on April 1, 1915. Passing through several owners via bank mergers, the final tenant moved out by 1994, with the building sitting vacant for more than two decades.
The property was purchased in 1994 by local businessman Louis Magnano of Park Center Development and Buffalo-based developer Carl Paladino for $173,000. In 1999, several pharmacy retail chains expressed interest in buying the properties, leveling them for a drug store. However, city officials and the Empire Zone worked to halt that proposal. They sold it to Dunkirk-based Southern Tier Environments for Living in 2004 for $150,000. Despite a $700,000 Restore NY, STEL could not get the funding and canceled the redevelopment. The URA purchased the building for $400,000 in 2010.
On three occasions — once in 2011 and twice in 2015 — the URA prepared requests for proposals for the site, receiving no responses. Only in 2017 was an RFP returned with a proposal.
Mayor Bill Aiello and Keri Kerper, coordinator of the city’s Department of Community Development, could not be reached for comment by press time.