Buffalo Business First  |  8/7/15

Downtown grocery store stocks challenges

Buffalo’s downtown corridor has jobs, housing, retail and restaurants. What typically comes next for resurfacing a city is a grocery store.

Buffalo has reached critical mass as stakeholders help to create a sustainable 24/7 downtown, said attorney David Colligan. With the highest percentage of population growth in Western New York happening downtown, the need for housing exploded.

There are projects that have been completed, ones in the works and others in the pipeline, occupying much space in the central business district. So much so that developers are seeking buildings to convert outside the district, he said.

Naturally, there’s been increased interest in finding a place that could more efficiently feed the growing number of residents.

“We’re building a 24/7 downtown — much of it is actually built,” said Colligan, who founded Colligan Law, where he practices in the areas of corporate and business law. “The demand is finally here. It’s like with foot traffic — you have to have a certain amount of it for things to open up.”

The need for a downtown grocery store could be filled with a proposed mixed-use project for 201 Ellicott St., but for a developer to jump in, it may take some risk and expense, according to Adam Walters of Phillips Lytle LLP. Among the challenges are parking, delivery schedule and traffic flow.

“All of them can be solved but it’s going to be expensive,” said Walters. “So, how do you make that work? And I think that’s where the city and developer will need to be particularly creative to structure this thing so that they can have the amenities they need and build in the things that minimize the impact to the development and community.”

Walters’ practice focuses in the area of real estate development and he’s been part of downtown development for the last 20 years. He said many like the idea of mixed-use but implementation can be an issue.

“People don’t like to live next to disruption, and mixed-use on some level is putting residential next to disruption. So how you deal with that and make it all work is a real challenge,” he said.

Since his State of the City address earlier this year, Buffalo Mayor Byron Brown has focused on turning the city-owned 2.5-acre site along the 200 block of Ellicott Street, which now houses almost 400 parking spots, into a building that would include a grocery store, condos and retail.

The city received multiple responses from developers in July to its Request for Qualifications, or RFQ. City leaders will review the submissions and choose a finalist.

“Just judging by the calls I’ve had, I consider this a super-hot parcel,” Brown told Buffalo Business First earlier this year.

The Ellicott Street location is ideal since it’s a middle ground between Canalside and the Buffalo Niagara Medical Campus.

“It’s almost like they can’t go wrong,” Colligan said. “If the medical campus continues to grow and medical students go to school there and fill the surrounding community and they have to shop, they’ll go to the grocery store. And if Canalside continues to grow and residential develops there, they’ll have to shop there. So, they get the better half of two worlds.”

Challenges ahead

Walters said the developer must replace the existing parking. There is no street parking around the lot and grocery stores want convenient places for patrons to park.

Walters did legal work on zoning for the Lexington Coop Market on Elmwood Avenue, which has limited parking, but that took litigation with neighbors.

Paying for parking could be a challenge for the developer, Walters said. Structured parking costs about $5,000 for on-site surface space and $25,000 for underground space. Creating a parking ramp has been discussed for this project.

The old zoning rules for the downtown district create square footage related parking issues. Colligan said the code states that for every extra square foot added to a project, additional parking is required and it’s the reason city grocery stores usually have cavernous parking lots.

However, the Green Code, which has not yet been officially enacted in the city, may provide less restrictive variances on parking requirements. Retail store developers could get a break if the project resides in a transit-oriented development zone.

Colligan said the city once encouraged setbacks but are now focused on moving retailers closer to the sidewalk to encourage public transit use. That’s happening with a Dollar General store at Main and Amherst streets in North Buffalo.

Colligan was recently in Minneapolis where these types of stores get a huge break on parking requirements. He even saw a recently built Whole Foods Market in that city’s downtown without any parking.

“It just about blew my mind to see a Whole Foods on the corner of a busy street with no parking that I could see associated with it,” Colligan said. “That’s very cool what that city is doing but they’re in the third or fourth phase of it and we’re just creating it right now.”

Traffic flow could be an issue for city grocery store with the morning rush hour limiting access to one side of the site, Walters said. Grocery stores typically have early morning deliveries, loading and garbage pick-ups when most people are still sleeping.

It usually takes six to nine months on a fast-tracked project to get design and approvals completed and start with the construction, which could take another 18 to 24 months, according to Walters.

An added wrinkle is that the RFQ requires that the developer work with Erie Community College to incorporate the college’s master plan into the conversion of 201 Ellicott. It will create an opportunity for synergy but that process will also take time, Walters said.

“It’s one of those things that if everything comes together well it really could be something special and help downtown continue to turn a corner,” he said.