McGuire plans sale of part of Pilgrim Village to low-income developer

Jun. 20--Pilgrim Village is finally about to see some long-promised redevelopment on the 11-acre community north of the Buffalo Niagara Medical Campus, after several years of halting progress and a lengthy legal battle.

In a surprising move, owner McGuire Development Co. is negotiating to sell 4.5 acres of the aging low-rise property to affordable housing developer SAA-EVI of Miami, led by Stuart Alexander, effectively bringing on a new partner in its effort to reimagine the low-income neighborhood.

"We are not low-income housing developers and that's not an area you dabble with," said McGuire President Danielle Shainbrown. "So we set out to find the most-qualified, well-vetted partners to do that, and Stuart's group quickly rose to the top."

McGuire and SAA-EVI have signed a memorandum of understanding, but do not have a signed contract, and would not disclose the purchase price. The land to be sold is located on the northeast quadrant of the community, at Michigan Avenue and Best Street, across from City Honors High School.

Upon closing, SAA-EVI plans to develop two affordable housing projects, one aimed at seniors and one for families, with a total of 222 apartments between them, plus a host of amenities. The total investment, including the purchase price, is expected to top $50 million.

"For me, it's a very exciting thing, because of what Pilgrim Village represented and what happened to it, and it's an opportunity to turn it around," said Alexander, chairman of SAA-EVI and founder of predecessor Stuart Alexander & Associates. "It's certainly something that community deserves, given what's happened in the medical corridor."

Alexander said the developer hopes to start work by the end of the year if the project is approved by the city.

That's a dramatic change from years of stagnation at the site, after initial plans by former owner Mark Trammell to redevelop and modernize the subsidized housing collapsed amid disagreements with the the federal government and bickering with McGuire.

Several buildings were demolished in the southwest corner in preparation for a new multistory apartment building. But the fenced-in land has remained vacant.

"It was disappointing when that didn't come together," said Brendan Mehaffy, executive director of Buffalo's Office of Strategic Planning. "To see progress, to see something happening there right now, is important."

Pilgrim Village was a 90-unit multifamily development that was built by Trammell's father in 1980 on 11 acres. It contained 17 residential buildings and one maintenance building.

But it was outmoded for current tenant needs and desires, and its location adjacent to the burgeoning Medical Campus made it highly underused for its potential. So Trammell's MHT Holdings teamed up with McGuire on an ambitious redevelopment plan.

The first phase called for a $96 million, six-story building with 152 apartments in a 260,000-square-foot L-shaped structure, plus a separate four-story parking ramp. It also would have featured first-floor space for a grocery, coffee shop, restaurant and dental office, plus a music school and a dance school.

Five buildings with 25 townhomes were demolished in preparation, while the remaining 65 townhomes were to receive a $3 million rehab. Eventually, a second phase of redevelopment would have added another 300 units for students, medical staff and conventional housing.

Instead, the project languished as the financing was held up, and McGuire and Trammell traded accusations of improprieties, and eventually lawsuits. McGuire, which had already loaned money to Trammell for the project, foreclosed on the property when he didn't repay his debt.

The litigation remains, but does not affect the sale of the property to Alexander's group, Shainbrown said. "We absolutely have title ownership to the property," she said. "We are free to develop it or dispose of it, however we would like."

SAA-EVI now expects to tear down four or five more buildings and relocate any tenants off-site to another subsidized housing complex, with an option to return to the new units once they are built.

"The project is tired. It's not right for those people to be living there, frankly," Alexander said.

Plans call for constructing one three- and four-story building with 98 units of senior housing, with 80 one-bedroom apartments, plus 18 two-bedroom units for those needing more room because of health issues, Alexander said.

Adjacent to that, the developer will erect a second five-story building with 124 apartments for families, featuring a mixture of 31 one-, 64 two- and 29 three-bedroom units. There will also be a 5,000-square-foot community center and a 3,200-square-foot retail space in that building, though "nothing of any consequence," Alexander said.

However, the new complex will feature significant tenant amenities, such as an indoor children's recreation or playground area, a green roof, workout rooms, computer rooms and meeting rooms, as well as a 5,222-square-foot outside play area and workout stations. Also planned is a second large 23,000-square-foot green space, a garden, and two parking lots totaling 165 spaces.

Alexander said the deal has been in the works for more than eight months, and his firm has been in negotiations with the U.S. Department of Housing and Urban Development, regarding the Section 8 subsidies that are critical to the neighborhood. Pilgrim Village was originally developed with those subsidies, and is governed by a contract with HUD and state agencies.

SAA-EVI has also been talking with New York State Homes and Community Renewal about obtaining bond financing for the project in early 2021. And the firm applied to the state Department of Environmental Conservation's Brownfield Cleanup Program to remediate the land.

In the meantime, the firm held one public meeting with neighborhood residents on March 12 -- right before the coronavirus pandemic shut the state down. It plans two more on June 30 and July 1 -- using social distancing and other Covid-19 safety measures -- and will begin publicizing its plans to get the message out, Alexander said.

"This has got to be a very inclusive process of the community around it," Mehaffy said. "Whatever they present is likely to be something that is initial and subject to adaptation based on the community input they receive."

Officials plan to submit paperwork to the city Planning Board and Common Council for both site plan review and a planned-unit-development designation, with McGuire's participation.

Meanwhile, McGuire will control the rest of the site, but has no current plans for redevelopment. Belmont Housing is already managing the property for McGuire and taking care of tenants, including those who had previously been displaced within the complex during the earlier demolition.

Shainbrown said McGuire is seeking a joint-venture partner or a buyer for the entire site, but is not currently in talks with anyone.

"Our options are open. But if someone comes to us in the meantime with a fantastic idea, we're not going to say no," she said. "We don't want it to stay vacant anymore."

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