Published: April 24, 2008 11:13 pm      

CITY OF LOCKPORT: Kendig to sell Canal St. stake to GLDC

Greater Lockport Development Corp. will buy out its partner in Canal Street redevelopment.

The agency’s board of directors voted Thursday to approve an agreement in which the agency pays principal Ben Kendig’s company, Rich Lock LLC, to abandon his 40-year contract to manage four GLDC-held properties on Canal Street.Kendig already has signed off on the deal, which will require GLDC to pay him $300,000 over three years. That covers Kendig’s $269,000 cash investment in historically accurate exterior rehabilitation and compensates him for lost potential revenue.

The buyout means GLDC will have sole control over the fate of the buildings.

Kendig, who did not attend the board meeting, described his split with GLDC as amicable.

“I’ve done what I came for. They can handle the local economy better than I can,” he said. “I feel like I’ve given a tremendous amount of effort to Lockport and with a good feeling in my heart.”

Mayor Michael Tucker, GLDC’s president, pressed for the buyout because of differences of opinion on whether the Canal Street buildings should be leased or sold and for how much. GLDC has been anxious to get a tenant or buyer onto the block to show progress and help lure other businesses.

But GLDC’s contract with Kendig had him securing tenants and managing the properties for two-thirds of whatever rents were received. Buildings could be sold, as long as Kendig agreed with the price.

The Rich Lock buyout proposal surfaced after a would-be local pub operator resisted leasing and wanted to buy a building, but not at the price Kendig sought.

Kendig, who was sought out by GLDC seven years ago because of his expertise in rehabbing old structures, said he remains convinced of the block’s business potential but he’s not unhappy to stop managing it. His “hands are full” rehabbing two buildings, an 1810 stagecoach inn in Chili and an 1840s-built structure in Rochester, he said.

The Canal Street buyout “is very good progression of the project. I’m touched and pleased to see people love their community so much,” Kendig said. “Construction is the hard part that nobody else can do. A lot of people can do the rest.”

With the buyout, GLDC is now the sole owner/manager of two large commercial properties in the city. The other is Harrison Place, which remains inert pending major repairs.

Taking on Canal Street is a risk GLDC had to take, Tucker said.

“We can be a lot more flexible with no middleman, no partner,” he said. “It’s challenging, no doubt, but sometimes you’ve got to do the right thing. ... The last 30 years we’ve done things that just haven’t been working, so we’ll try something new.”

Once the deal is closed, GLDC will have to figure out whether it wants to hire a real estate broker or property manager to recruit tenants or buyers. Tucker and GLDC attorney John Ottaviano both think it would be better to sell, not lease, them. Parcels could be sold individually or the whole block sold to a developer, Ottaviano said.

“We don’t plan to be in the real estate business,” he said.

The terms of the deal require GLDC to pay Rich Lock $100,000 at closing, which should take place within 30 days, then pay $100,000 a year for the next two years, at 4 percent interest. The money is to come from GLDC’s revolving loan fund, which currently contains about $500,000, according to GLDC Executive Director William Evert.

The deal also will list the project’s worth as $929,000, the value of cash contributed by Kendig and GLDC up to this point. The list price, put into the deal at Kendig’s request, allows Kendig to “write off” a $600,000 loss as a donation to charity, Ottaviano said.

In other business, the board agreed GLDC will borrow $1.5 million, as a Revenue Anticipation Note, to cover the upfront cost of roof repairs at Harrison Place. The city previously was awarded a $1.5 million Restore New York grant for Harrison Place improvements, but the money is paid out as reimbursement of expenses. Roof work should be done this summer, Evert said.

Also, board members voiced support for a proposal by Becky Burns, a member of the city’s Flight of Five Restoration committee, to decorate part of Canal Street as a lead-in to the historic locks area.

According to Tucker, the committee wants to use the front of 79 Canal St., near the Pine Street bridge, to display vintage photos and would erect life-size cutout figures of old-time canal workers, barrels and crates on the street. “It’s a pretty cool idea,” Tucker said. “It really adds some character to the street.”

The plan has to be approved by the city planning board.

Contact reporter Joyce Miles at 439-9222, ext. 6245.