Update: Gateway Project Niagara Falls Clears FERC Hurdle for $125M Plan

Element Development’s Gateway Project, Niagara Falls’ planned $125 million mixed-use development on Buffalo Avenue, has cleared a federal hurdle: the Federal Energy Regulatory Commission issued a ruling on Sept. 25 that removes a 4.8-acre parcel from the Niagara Power Project boundaries, opening the land for use in the project, the Niagara Gazette reported on Nov. 3. This is an update to our earlier coverage of the Gateway Project.

What Happened

According to the Niagara Gazette, the FERC ruling takes a 4.8-acre city parcel out of the boundaries of the Niagara Power Project, the hydroelectric project operated by the New York Power Authority. The parcel is part of the roughly seven acres Element wants for the development. The Gazette reported that NYPA does not need the parcel for its own purposes, for public access, for recreation or for shoreline protection, and that no archaeological or historic resources were found on the site.

The ruling does not hand the land to the developer. Upstate Strategic Advisors, the government relations consultant working with the project, says NYPA must first issue a request for proposals before the property can be transferred to a developer, according to the Niagara Gazette. The firm, founded by former Assemblyman Sam Hoyt, called the FERC approval a “game-changer,” as cited by the Gazette from Buffalo Business First, and said in a statement on its website that it looks forward to seeing the venture move forward.

Element’s president could not be reached by the Gazette. He told Buffalo Business First that the ruling is a step in the right direction, and that outlet previously reported that construction should start this coming spring and take three years, according to the Niagara Gazette.

What the Gateway Project Includes

The plan calls for about 225 market-rate apartments and 100 condominium units, plus restaurants and retail space, across four buildings totaling about 469,000 square feet, according to the Niagara Gazette. Earlier reporting by Niagara Action described the complex as three 8-story residential towers, a structured parking ramp, and a mixed-use building with ground-floor storefronts and event space above, with two more parcels that could eventually be developed for retail.

• Main site: 901 Buffalo Avenue, on land between Buffalo Avenue, Niagara Falls State Park and the Niagara Scenic Parkway (Niagara Action).
• Adjacent building: 1001 Buffalo Avenue, a former paper plant warehouse planned as a family entertainment venue with a virtual reality sports arena, indoor go-karts, a zipline, retail and a brewery or distillery (Niagara Gazette).
• Planned amenities: a pharmacy, grocery options and wellness services (Niagara Action).
• Cost: $125 million (Niagara Gazette).

The Developer and the Financing Plan

Element Development is led by president Nirel Patel, whose affiliated Rupal Hospitality owns the 57-room Cadence boutique hotel on Rainbow Boulevard and Seva Kitchen and Bar, and whose group is completing a $14 million expansion of the Marriott Courtyard across from the Gateway site, according to Niagara Action. Mayor Robert Restaino has supported the proposal (Niagara Action).

Patel has said the project is primarily privately funded, with private investor commitments secured and institutional lenders expected to contribute. The company plans to use New York’s Brownfield Cleanup Program, historic preservation tax credits and federal New Markets Tax Credits, according to Niagara Action. In June, Niagara Action reported that the Niagara Falls City Council was expected to consider transferring the abandoned, city-owned Porter Park property at Buffalo Avenue and 10th Street to Element.

Where Things Stand

With the FERC boundary change in hand, the remaining steps reported so far are the NYPA request for proposals and transfer of the parcel, plus the approvals and final reviews that Niagara Action noted in June when it reported a construction start 12 to 14 months out. The later Buffalo Business First report of a spring start, cited by the Niagara Gazette, is broadly consistent with that window. No general contractor, construction manager or design team has been named in the sources reviewed for this report.

Implications for Owners, Developers, Contractors and Subs

• Land control was the gating item. A parcel inside a federally licensed hydropower project boundary cannot simply be sold or built on. The FERC action removes that constraint, but a public RFP from NYPA still has to run, so the developer does not yet have full site control.
• A large residential package for Niagara County. Three 8-story towers, a parking structure and a mixed-use building add up to a sizable concrete, structural, MEP and envelope scope by local standards. Firms in Western New York should expect bid activity to follow site control and financing, not precede it.
• Incentive-driven schedule. Brownfield, historic and New Markets credits each come with their own eligibility and compliance steps. Contractors should plan for documentation requirements tied to those programs.
• Adaptive reuse next door. The 1001 Buffalo Avenue warehouse conversion is a separate interior-heavy scope that could move on its own timeline.

What to Watch

• Issuance of the NYPA request for proposals for the parcel and the outcome of that process.
• City Council action on Porter Park.
• Selection of a construction team and any public financing or tax credit approvals.
• Whether a spring groundbreaking holds.

Bottom Line

The FERC ruling removes a federal boundary that stood between the Gateway Project and a key part of its site. The developer still needs NYPA to run a request for proposals and transfer the parcel before vertical work can start, but the path to the spring start reported by Buffalo Business First is clearer than it was a few months ago.

Key Questions

What did FERC decide about the Gateway Project in Niagara Falls?

On Sept. 25, the Federal Energy Regulatory Commission issued a ruling removing a 4.8-acre parcel from the Niagara Power Project boundaries, land that is part of the roughly seven acres Element Development wants for the Gateway Project (Niagara Gazette).

How much will the Gateway Project Niagara Falls cost?

Element Development’s Gateway Project on Buffalo Avenue in Niagara Falls is a $125 million mixed-use development (Niagara Gazette).

How many apartments and condos will the Gateway Project have?

The Gateway Project plans about 225 market-rate apartments and 100 condominium units in four buildings totaling about 469,000 square feet (Niagara Gazette).

When will construction start on the Gateway Project?

Buffalo Business First previously reported that construction on the Niagara Falls Gateway Project should start this coming spring and take three years, though NYPA must first issue a request for proposals before the parcel can be transferred (Niagara Gazette).

Related Coverage

• Niagara Falls' $125 Million Gateway Project: 325 Homes, Four Buildings, and a Market-Rate Bet on Downtown
• Update: Niagara Falls Picks Developer for $25M Niagara University Housing
• Niagara Digital Campus: A $1.5 Billion Data Center Proposal Navigates the Path to Groundbreaking in Niagara Falls

Image credit: Niagara Gazette (Gateway Project rendering). Image from the source article: Niagara Gazette.

Sources

• Niagara Gazette, “Federal ruling clears way for parcel use in $125M Gateway development,” https://www.niagara-gazette.com/news/local_news/ferc-ruling-clears-way-for-parcel-use-in-125m-gateway-development/article_74c140fe-bc37-47cf-a89d-27de349bb089.html
• Niagara Action, “$125 Million Gateway Project Could Bring Hundreds of Homes, Retail and Entertainment to Niagara Falls,” https://www.niagaraaction.com/125-million-gateway-project-could-bring-hundreds-of-homes-retail-and-entertainment-to-niagara-falls/