How much are you willing to pay to turn the HSBC tower into a vital offshoot of Buffalo’s waterfront development and keep it from becoming a vacant beacon of Buffalo’s blight?
That’s the question that’s going to dominate the discussion through the end of next year as the owners of the soon-to-be-empty tower – the tallest privately owned office building in upstate New York – scramble to avoid foreclosure or bankruptcy.
To their credit, the tower’s owners, Seneca One Realty, are making a gallant effort to come up with a way to hang on to the 38-story tower and make it a vital part of downtown Buffalo and the new waterfront developments nearby.
They want to convert the tower into a mix of hotel rooms, condominiums and apartments and offices, while replacing the concrete pad surrounding the fortress-like building with green space that would turn the undeveloped portion of the property into an inviting gathering spot for the community.
There’s only one problem: None of the ideas come close to making financial sense. Not by a long shot.
To make it work, the building’s owners would need incentives that would cost taxpayers tens of millions of dollars through a combination of tax credits, property tax breaks and other handouts, including possibly a slice of the Buffalo Billion in promised state aid.
That’s asking a lot. And it’s even harder to swallow for a retrofit of a 40-year-old office building that lost its second-biggest tenant, the Phillips Lytle law firm, to a new office building a block away and its biggest tenant, HSBC, to a cost-cutting move that will see it shift most of its tower workers to other local facilities.
The Urban Land Institute experts spoke of a public-private partnership that could allow taxpayers to share both the risks and potential rewards of the revitalization project, possibly including an ownership stake in the property or an arrangement that allows additional proceeds to flow to the government partners if rental income rises above a certain target.
“The public ought to own a percentage of it, or something. I don’t understand why the public has to give away our money.”
Built thirty years ago, the metro rail that runs both under and above Main Street is finally seeing a bright future. What’s the cause? The catalyst is the Buffalo Niagara Medical Campus, where 17,500 people are expected to be working soon, and they will depend more than ever on the oft-maligned “train to nowhere.”
As a result, at least $91 million has or is soon to be invested in real estate projects – primarily lofts and apartments – near the subway stations. The city hopes to approve 800 to 900 new housing units along the Main Street subway spine by 2016, with as many as 2,000 to 3,000 more in later years. And while they now see Metro Rail finally fulfilling its transit and development potential, transit officials, real estate developers, city officials and those guiding the city’s burgeoning medical industry all agree the development will spawn an urban lifestyle. It is also possible many Buffalonians may choose not to own cars, they say.
The city planning chief echoes what everyone from the Buffalo Niagara Medical Campus to the University at Buffalo all acknowledge: “This can’t happen without Metro Rail.”
Developments sparked by the new job-growth concentration on downtown’s north edge include:
• At least $91 million worth of real estate investment in hundreds of new housing units around subway stations like Utica, Amherst and LaSalle.
• A projected surge in rail ridership as thousands of Medical Campus workers commute to a facility deliberately designed without employee parking.
• Plans for a “coatless” Medical Campus connected by tunnels and skywalks, anchored by a new $350 million UB Medical School incorporated into the Allen/Medical Campus Station.
• Medical Campus ideas for car sharing that encourage mass transit-dependent employees to check out rentals for business or pleasure outside the urban core.
• Medical Campus proposals for extending Metro Rail through the former Delaware, Lackawanna and Western Railroad Terminal to a parking and transit hub in the Old First Ward for longer-range commuters.
• A Niagara Frontier Transportation Authority study under way that examines extending Metro Rail or another mass transit alternative to Amherst, with much of the justification based on serving the Medical Campus.
• City Hall’s new emphasis on a Main Street “knowledge corridor” encompassing Erie Community College, downtown financial and legal institutions, the Buffalo and Erie County Public Library, the Medical Campus, Canisius College, Medaille College, Sisters Hospital and UB.
Actor Gary Sinise’s foundation, Building for America’s Bravest, is helping to rethink design in order to accomodate veterans who return from war with serious injuries. As more veterans returned from home with injuries, designers realized that they needed to begin building a new kind of home.
These homes make it possible for veterans to live more independently than ever before, often custom designing homes based on the owner’s needs. Inspired by the lack of attention paid to Vietnam veterans, designers work hard to create a home that will serve the veteran now, as well as 10, 20, or 30 years into the future. A veteran in a wheelchair needs a floor other than carpet or may need the stove and counter to be closer to the ground. Mirrors in these homes tilt down, so veterans in wheelchairs can see themselves. Many of the homes functions are controlled by an iPad, for convenience. Yet the homes also allow space for growth and change, as it is impossible to foresee challenges that veterans may face well after they have returned and moved.
It’s a question many real estate agents hear from clients: Why do short sales take so long?
Despite improving real estate markets, short sales and foreclosure sales will be with us for the foreseeable future. Many homeowners are still underwater, and at any time in the coming years, these folks may face a situation, such as a job transfer or divorce, requiring them to sell at a loss.
Short sales happen because the loan on the property is larger than the sale price minus all the sale expenses. With a short sale, the seller is asking the bank to take less than the amount owed.
Even if you’ve made an offer and the seller has accepted it, it’s not a done deal. The seller’s bank must approve the sale, and this is where the big delays can happen. Banks are losing money in a short sale and aren’t too keen on it. It’s understandable. Imagine that you loaned a friend $100, and he came to you later saying he could only pay you back $75. Would you cave in easily? Probably not.
It’s important to know that a buyer and their agent have no control over the process. The success of a short sale — and how long a short sale takes — relies heavily on a listing agent. If the listing agent isn’t experienced with short sales, you’re likely wasting your time. A good short sale listing agent will properly advise the seller and have a thorough knowledge of the bank and its process before your offer is accepted.
Here’s a look at why short sales can take so long, along with tips for what you can do about it.
The seller’s bank must review the short sale package
In order to approve the sale, the lender requests a complete short sale “package” from the seller. Much like the package you must submit to get a loan, the seller must submit their finances. The lender will want to see the seller’s debts and assets, review their credit score and the contract to purchase the home. After all, why would a bank approve a short sale if the seller had $1 million sitting in the bank?
What you can do: A good listing agent will have the short sale package in hand and even completed upfront. Once an offer is accepted, the agent can simply add the contract and buyer’s information and submit it.
Documents get lost, pages go missing, signatures are left blank
Most banks require hundreds of pages in the short sale package, and many of those pages require signatures from buyers, sellers and agents. If one page is missing or one signature left blank, the document doesn’t get processed. Often, the listing agent will fax in 100 pages and just wait. Sometimes it will take a month to get a response from the bank, informing the agent that things are missing.
What you can do: Be proactive. The listing agent should call the bank after submitting the short sale package, especially if sent by fax. Confirm that all documents have been received. Make sure to get the name and phone number of the person you speak to.
Some documents quickly become outdated
It could be weeks between the time the documents get “processed” and when the information hits the desk of a negotiator, who actually reviews and negotiates. Does one bank statement come at the beginning of the month while all the others come at the end? That one bank statement may soon be outdated, and the bank will require an updated one. If that’s the case, it could take the lender weeks to realize this and another week to contact the seller or their agent.
What you can do: Review the statement date on each credit card and bank statement so you’ll know if a new one will arrive soon. If so, send it over right away.
The lender wants more information
The lender may ask to see the buyer’s proof of funds, review the preliminary title report or request more verification of the seller’s hardship (job loss, divorce, job transfer). The negotiator could request just about any additional information.
What you can do: The seller and agent should be ready to respond, because a delay could add a few more weeks to the process. Try to imagine yourself as the bank and think of everything that might be asked for. Provide as much information as you can upfront.
2 loans complicate everything
The short sale process is difficult enough with one bank. Imagine two banks, each with its own processes, that don’t cooperate? It could set everyone back months. The second lender may request more information before approval. Or, the second lender may issue an approval good for 30 days. If lender No. 1 approves on day 31, the seller must go back to the first lender to get re-approved.
What you can do: Understand the approval timelines for each bank and anticipate deadlines.
The deal could die at the last minute
Once the bank has a complete package and you get a negotiator on the phone, there is light at the end of the tunnel. After all this time, the negotiator may counter the buyer on price. Or they may only approve the sale if the seller contributes money. They could always ask for the commission to be lowered. No matter what they say, the bank’s request could kill a deal in the moment. And there’s no way to anticipate exactly what they will come back with.
What you can do: Don’t think the bank will simply approve a low offer. If the seller has money in the bank, they need to be prepared to contribute or you may have to come up with more money. Sometimes the bank is just looking at its bottom line and doesn’t care how everyone gets there. Buyers, sellers and agents must work together to make the deal work.
Foreclosure trumps everything
Time and again, all parties wait and wait and follow along the process — only to see the sale denied. What’s worse is that sometimes the foreclosure department at the same bank does not work in conjunction with the short sale department. A good offer for a short sale may be on the table, but the seller may be six months behind on payments, causing the foreclosure process to kick in. And the foreclosure process can trump everything. When this happens, the buyer no longer has a deal on the table because the seller, forced into foreclosure, is no longer the seller. In a foreclosure, the home belongs to the bank.
How to speed up a short sale
The best way to expedite a short sale approval, and therefore your escrow, is to be certain the seller’s real estate agent is experienced with short sales. The seller’s agent interfaces with the bank 24/7. If the agent isn’t experienced in short sales, chances are this process will drag on and on.
An experienced short sale agent will know how certain banks work, what to anticipate and how to best work through the bureaucratic process. But even the most experienced short sale agent can come up against brick walls or challenges they just can’t overcome. If you see a short sale home you love but don’t have much confidence in the listing agent, try not to fall too deeply in love with it. You’ll only be disappointed if the sale doesn’t go through.
Many of the nation’s leading craft breweries boast their efforts of sustainability: the Alaskan Brewing Company, however, is taking it up to a whole new level. It’s Juneau factory will now be powered by its most abundant (and free!) resource: beer. By reusing excess malt and barley, this brewery will become the first ever to be completely sustained by its own product.
While most craft breweries send their excess grain to farmers as cattle feed, the Alaskan Brewing Company had to get creative. There aren’t too many cattle farms that far North, and shipping the extra resources wasn’t economically or environmentally friendly.
