Back in action: Savarino returns to complete three projects

Jul. 7—A year ago, Samuel Savarino gave up his longtime construction contracting business after a bitter fight with a state agency cost him his ability to get insurance for his work.

But that hasn't stopped him from acting as developer, and he is pursuing prominent projects in three different counties. After months of uncertainty over the future of the former Welch's Building in Westfield, the F&M Building in Lockport and an industrial site in North Buffalo, Savarino is still hoping to accomplish the goals he originally set out for each.

Savarino, a veteran of the construction field, had been one of the most consistent and active players in the development arena for more than 20 years, performing construction work across the region and tackling development projects through his Savarino Companies and related entities. But that came to an end last summer after the Dormitory Authority of the State of New York terminated the firm for cause on a renovation project at SUNY Alfred State.

The Dormitory Authority had accused Savarino of failing to comply with the construction schedule for MacKenzie Hall, not correcting certain work that it said was completed improperly, not managing the staffing of its asbestos subcontractor, and not providing an acceptable plan for using minority and women contractors on the project. It suspended and then fired Savarino in November 2021.

Savarino denied the accusations and filed a lawsuit against the Dormitory Authority a year later, accusing the state agency of wrongful termination and breach of contract. But the agency countersued for $4.85 million in damages. Savarino's surety bond firm — its insurer — was forced to complete the work under the performance bond, with Savarino reimbursing the insurer even though the contractor didn't get paid.

Savarino incurred $3.3 million in losses and could no longer get the insurance the company needed to handle construction projects for clients, costing it $110 million in new work. So the company essentially shut down last August and laid off its entire staff. And Savarino stepped back from any other work, leaving the three pending development projects in limbo.

Now Savarino is back and optimistic that he can get it done. "We're planning on going forward," he said.

1 Howell St.

Savarino last month won a one-year extension of city approval to develop a burned-out former factory along Scajaquada Creek into a 50-unit waterfront apartment complex. Construction would take 18 to 20 months, probably starting in early 2025.

"I purchased the property, so I'm committed to do the project," he said. "It's delayed, but it's going to go forward. The plans that were approved are the plans that we're going with."

The $15 million project by Howell Street Venture LLC would demolish a 10-year-old industrial warehouse that was heavily damaged in a fire and erect a new building in its place. It also involves a $2 million remediation of the highly polluted parcel under the state Brownfield Cleanup Program. The proposed five-story, 49,000-square-foot building would contain 14 studio, 28 one-bedroom and eight two-bedroom apartments.

Financing is still not secure, though. It was originally supposed to be a mixed-income building with some units offered at affordable rents based on the area median income. But that's no longer working out financially, so Savarino would either use a higher percentage of the AMI or make them all market-rate rents.

Welch's

In the Village of Westfield, a partnership between Savarino and another firm agreed to buy and redevelop the historic former Welch's Grape Juice Co. headquarters through 2 Portage LLC. The partners completed their $475,000 purchase and received approval from the Chautauqua County Industrial Development Agency for $1.76 million in tax breaks to support the $16.15 million project.

Renovation plans called for the building at 2 S. Portage St. to be turned into 46 mixed-income residential apartments and 3,700 square feet of commercial space. The project includes 31 one-bedroom and 15 two-bedroom apartments, ranging in size from 500 to 1,200 square feet, with both market and affordable rates.

The project already has commitments for financing and low-income housing tax credits, as well as historic tax credits and grants, and Savarino's team is now working on finalizing the architectural plans with hopes to start work by late 2024 or early 2025. As with Howell, though, he's now looking at making all the apartments market-rate.

"The rents that one could get at best in Westfield are not the same as one could get in Buffalo," he noted. "The rents are going to be lower than they would for a similar unit in Buffalo."

F&M

Savarino had planned to spend $9 million to redevelop the former Farmers & Mechanics Building in the City of Lockport, adding 30 new residences to the landmark building. Located at 116 Main St., the building consists of a historic tower and an attached single-story mall dating to the 1970s. But they've been mostly vacant for more than 30 years.

Plans call for 21 one-bedroom and nine two-bedroom apartments, and some first-floor commercial or retail space in the historic former bank lobby. The tower would be restored, while the mall would be gutted and lined with housing along the perimeter and 22 indoor parking spaces in the interior.

Savarino has both buildings under contract from Granchelli Development and received an 18-month extension on his city approval of the project, now valued at $12 million. He's working with Lockport Development Corp. to complete due diligence and has not applied for financing.

But he previously expected to use historic tax credits, a Restore NY grant and $1.4 million from the Downtown Revitalization Initiative, as well as a Main Street grant from New York State Homes and Community Renewal, a first mortgage and a loan subsidy.

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