$43M Elmira Regional City Center Project Proposed

Posted September 7, 2012

Officials upbeat about big downtown Elmira project
By Ray Finger, The Star-Gazette (9/5/12)

Much potential is anticipated in a proposed project that could bring a new hotel, apartments, businesses, a restaurant and a banquet facility/conference center to downtown Elmira.

The sweeping project proposed by developer Michael Elzufon, of Minneapolis, would occupy two city blocks, cost up to $43 million and take several years to complete. It is being called the Elmira Regional City Center.

“I really do believe this project has the potential to be a game-changer for the downtown business district. It could reshape the whole central business district. It’s a project of that magnitude,” Chemung County Executive Tom Santulli said Wednesday, a day after the news of the center was made public during a Southern Tier Regional Economic Development Council meeting in Binghamton.

However, he cautioned the community not to think of the proposal as a done deal.

“There’s just a lot of work to do on this project, and we have to put it in perspective. When you do a project of this magnitude, it doesn’t happen quickly. There are a lot of bumps in the road along the way,” Santulli said.

The developer has to secure financing for a project this extensive, and there is environmental assessment work that has to be done, he said. Also, the city, the Elmira school district and the county all have to sign off on a tax abatement and financing arrangement, he said.

“It certainly is going to provide a great opportunity for the community, a great opportunity especially for the city, to do something that really could be a game-changer,” Santulli said. “It’s just a massive project with a lot of moving parts, and I think we have to be patient and take it day by day.”

Located in a two-block area bordered by Clemens Center Parkway, East Church Street, Baldwin Street and Market Street, the Elmira Regional City Center project potentially involves the redevelopment of the city-owned Federal Building — better known as the old post office — as well as the Star-Gazette building, the Personius-Warne studio and the Yunis building. Construction of a hotel also is planned.

Local businessman Tom Freeman, president and chief executive officer of First AIR and owner/operator of First Arena, looks at the project positively.

“It would be great for downtown and great for the arena,” he said Wednesday. Asked about the potential impact of the conference center on the arena, he said, “I think that we would be very complementary to each other. I don’t view it as competition at all.”

Elmira City Councilman Brent Stermer, D-2nd District, said council members support the project 100 percent.

“This is a wonderful and exciting project for downtown that has great potential,” said Stermer, in whose district the project is located. “It’s really a chance for our downtown to grow again and succeed.”

From a marketing standpoint, the project is important for two particular markets, said Kevin Keeley, president of the Chemung County Chamber of Commerce.

“One is the visitor market. We have a lot of aggressive marketing we do for tourism and visitors. This would dramatically enhance that, the attributes we have to market,” he said Wednesday.

“The second is the image of the community for recruiting employees,” Keeley said. Inquiries are received all the time from engineers, educators, doctors and others in the medical field who are looking into moving into the area and want to know about the lifestyle in the community, he said.

“Having something as cosmopolitan as this project would really dramatically enhance the appeal of the community to those new employees and their families,” Keeley said. “We understand these things really are enormously important to the whole (human resources) initiatives in our economy.”

That was demonstrated by Michael and Gina Mitchell’s Riverside Suites project on West Water Street that includes luxury loft apartments, Keeley said. The market for that kind of housing is growing pretty dramatically, he said.

“The boomers are empty-nesters who don’t want to cut the lawn anymore,” he said. “Young couples are delaying having children longer, and so they really want that urban lifestyle until they get to the point where they want to put a swing set out back. You really have a contraction of a couple of markets that would find this very appealing.”

The project is exciting and good for everybody, Gina Mitchell said Wednesday.

“It’s a great project for Elmira, and it can really help all the businesses down here — the restaurants, the entertainment, my property,” she said. “It will help support other businesses and other service kind of industries — the barber shops, the nail salons, that kind of thing — that we need a little bit more critical mass to support.”

More importantly, it results in property that eventually will be generating taxes, she said.

“You hear people go, ‘Well, hire teachers and pave the roads,’ but how do you do that without tax money?” she said. “You do that by creating properties that have value and are taxable.”

Plans are still moving forward on a hotel planned for vacant land at East Church Street and Judson Street Extension by developer Edger Enterprises near the highway and have not been affected by Elzufon’s proposal, City Manager John Burin said. “One is not impacting the other, as far as I know,” he said.

With the existing Holiday Inn Elmira-Riverview at 760 E. Water St., there is the potential for three major hotels in the city. But as has been seen in Horseheads, multiple hotels in an area can benefit each other, Keeley said.

“One hotel is a hotel. Two hotels become a destination. Once you begin to have several options for lodging in a concentrated area, there is a phenomenon in marketing that exponentially increases the marketability of the site,” he said.

“So everybody benefits from having more than one lodging facility nearby. We’re seeing that up by the mall in Horseheads, and certainly we would anticipate and hope to see that here with (Elzufon’s) development and Jodi Edger’s project on East Church,” he said.

For example, when Elmira College is having freshman orientation, a parents’ weekend or some other event, all lodging facilities in the city can benefit, Keeley said.

“They can go after the business market or the leisure market or other specific niche markets in their advertising and promotions, but what’s good about having them is that they accommodate each other’s overflow. That’s why it becomes a destination,” he said. “In most cases, that overflow becomes very helpful.”

(For original story and photos, please visit http://www.stargazette.com/article/20120905/NEWS01/309050026/Officials-upbeat-about-Elmira-project?odyssey=tab%7Ctopnews%7Ctext%7CFRONTPAGE.)


Proposed Elmira center would bring jobs, tax revenue
By Ray Finger, The Star-Gazette (9/6/12)

Hundreds of jobs and about $1 million in new property tax revenue are anticipated to result from the proposed Elmira Regional City Center project, officials said Thursday.

Elmira City Council chambers were packed Thursday morning as a presentation was made providing an overview of the proposed $43 million project.

“We keep using the term ‘transformational.’ We try to come up with something else because it kind of gets old, but it will be transformational,” City Manager John Burin said of the projected impact of the center.

Developer Michael Elzufon, of Minneapolis, was to fly into Elmira on Thursday morning for the presentation, but his plane was turned back because of foggy weather, Burin said. However, he was able to participate from the Detroit Metro Airport through online meeting software.

The project is to be located in a two-block area bordered by Clemens Center Parkway, East Church Street, Baldwin Street and Market Street. It would include a 127-room Hilton Garden Inn with indoor and outdoor pools and a restaurant with rooftop terrace dining.

The project potentially involves the redevelopment of the city-owned Federal Building — better known as the old post office — as well as the Star-Gazette building, the Personius-Warne studio and the Yunis building.

The section of East Gray Street that currently runs between Clemens Center Parkway and Baldwin Street would be eliminated.

The project is expected to produce 230 construction jobs over two years and as many as 100 permanent jobs through the hotel, restaurant, banquet facility and groundskeeping, said George Miner, president of Southern Tier Economic Growth, who gave the bulk of Thursday’s presentation.

The project features about 120 apartments including studios, lofts, extended-stay suites and condominiums, Miner said.

The project has many contingencies, he said, noting underground storage tanks at one of the properties.

The developer will provide $4.4 million in financing for the project, Miner said. Almost $5.2 million in state funding has been applied for. Elzufon has been working with several banks to obtain about $17 million in private equity funding, he said.

Part of the funding will involve an arrangement similar to what was done to finance construction of the CVS Pharmacy distribution center in the Town of Chemung, Miner said.

Through such an arrangement, $13.4 million in Payment In Lieu Of Taxes increment funding would be applied to debt service for the project.

That PILOT funding would come from the increased property tax revenue expected to result from the project, Miner said.

The two-block project area currently generates $85,000 in property taxes to the city, Chemung County and the Elmira school district, Miner said. After the project is completed, it is projected to generate a total of about $1 million in property taxes, he said.

The PILOT arrangement would take about $640,000 of that for debt service toward buying buildings, infrastructure work, removing the section of Gray Street, environmental work and renovating buildings, Miner said.

About $425,000 of what remains in property tax revenue would be divided among the city, county and school district, he said.

“That’s the way things get done in urban center projects,” Miner said.

An additional $525,000 a year is estimated to be generated in sales tax revenue and another $330,000 in room tax annually, he said. Additionally, 15 condominiums projected to be built in the Federal Building would generate an additional $109,000 in property tax revenue that would be outside the PILOT agreement, Miner said.

“This is what it takes to make a change in the area. I think we have the formula. All the pieces have to fall together, there’s no doubt about it,” Burin said. “But with community support, letting people know that you support something like this is going to go a long way. It’s going to send a message to Albany.”

Elzufon said the Star-Gazette building initially was planned to be razed until he did a walk-through. Currently, 20 residential units are planned for the existing first and second floors, he said.

An additional three floors are to be built in a pyramid shape atop the existing Star-Gazette building. The fourth and fifth floors also will have apartment units, with the roof level to feature such amenities as a fitness center and a lounge area.

Star-Gazette President and Publisher Sherman Bodner said earlier this week that while he cannot comment on the sale of the building, the newspaper plans to remain “a vital part of the downtown Elmira business community.”

Original plans for the Personius-Warne studio were to preserve only the building’s facade, but at this point, the original front portion of building will be kept and the rear section, an add-on, will be removed. The proposed new use for the building will include a wedding planning room, a bridal salon/tuxedo shop and a coffee shop featuring baked goods.

A unique glass fountain-sculpture will be the centerpiece of the development in front of the hotel. The main entrance to the complex would be off Baldwin Street, roughly in the area of Gray Street.

Construction of four floors of micro-lofts and extended-stay suites is planned at the corner of Market Street and Clemens Center Parkway. The Yunis Building is to be converted into three floors of rental apartment units.

“We’ve come a long way, but we still have a long way to go. This certainly is not a done deal, but we feel very good about it,” Burin said. “With support and if the numbers come together, this dream that (Elzufon) has will become a reality for this region.”

(For original story and photos, please visit http://www.stargazette.com/article/20120906/NEWS01/309060028/-43M-Elmira-redevelopment-project-packs-City-Hall?odyssey=tab%7Ctopnews%7Ctext%7CFRONTPAGE.)
 

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