Buffalo’s building reuse assistance program outdated and out of time

When city officials launched the Buffalo Building Reuse Program, their goal was to spur redevelopment of older, vacant or underused commercial and industrial buildings into vibrant new apartments, retail or office space.

Developers were already working on those types of projects, relying on state and federal historic tax credits for financing. But they needed a little help to bridge the gap in funding and time on downtown projects, before the cash from those credits would flow in. And banks and other lenders weren’t prepared to provide that.

So the Buffalo Urban Development Corp. created the building reuse loan fund, offering low-interest loans of up to $750,000, in partnership with several local lenders such as Evans Bank, M&T Bank, HSBC Bank USA, First Niagara Bank and Pursuit. That made the difference in enabling several projects to advance, including the Phoenix Brewery apartments and the Alexandre Apartments.

“It was a good collective effort with the banks,” said Brendan Mehaffy, Buffalo’s economic development commissioner. “It did lead, at the early stages, to a number of projects and conversions in the central business district.”

Less than a decade later, the environment is much different. Banks are now more willing to step in with bridge loans after gaining years of confidence in seeing projects come to fruition. Their interest rates and fees have also been lower than the building reuse loan terms, and less bureaucratic, making the BUDC program the lesser choice.

“When we initially launched program back in 2015, we had a good amount of activity,” BUDC President Brandye Merriweather said. “Now there are more banks in the market who are able to do these types of loans.”

So with the original loan agreement scheduled to sunset in 2025, BUDC wants to start fresh – by pulling the plug on the old building reuse loan program.

There are no loans in the pipeline, all the previous loans have been repaid, with interest. The agency…