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Redeveloping the Chimes Building in downtown Syracuse

SYRACUSE — On Sept. 1, 500 Salina Enterprises, LLC., closed on the purchase of the landmark, 12-story, 144,000-square-foot Chimes Building at 500 South Salina St. in downtown Syracuse. 


The seller was UA Properties, LLC. located in Huntington, New York. UA Properties had bought the building in 2009 for $1 million. The original plan was to create office space, but a soft market convinced UA Properties to change the concept to selling apartments, which later morphed into apartment rentals. Municipal records indicate that the current total assessment of the property is $2.59 million and the full-market value is just north of $3.2 million. On Aug. 31, 2016, the sale price of the land and building were recorded at $6.675 million.


Remodeling plans


On Sept. 6, Labor Day, the new owner brought in Goodfellow Construction Management to repair the building’s façade, which was a hazard to pedestrians, and the construction company also replaced the sidewalk. The building had a number of city building-code violations, which it corrected in the first 30 days. The development plan calls for enlarging the lobby, utilizing the first and second floors for retail and office space, and constructing approximately 150 one- and two-bedroom apartments on the upper 10 floors. Goodfellow Construction has already completed demolition of the 11th floor and has begun working on the 12th floor. The previous owner had built 47 apartment units on floors three through six, which 500 Salina Enterprises will reconfigure and update during the two-year build-out. All of the apartments will be priced at market rates between $1,300 and $1,800 per-month.


The new owner also wasted no time in beefing up the security at the building. The company restored all the exterior lighting that highlights the building and retained a supervisor who lives on premises to immediately respond to tenant concerns. The company has even plans to reinstall the chimes, originally installed in 1928, and have them peel on a regular basis. In addition, the property now boasts 21 security cameras and offers 24-hour security both for the building and the adjacent parking lot. The planned build-out is not just cosmetic: the contractor is replacing the HVAC; the windows; rebuilding the four, high-speed elevators; moving pipes; and more. The American and Syracuse University flags now flutter on the flagpole atop the structure. The total investment is projected to be $15 million. At this point, the project development is self-funded by 500 Salina Enterprises; there is no determination yet to seek outside financing.


Downtown Syracuse development

The Chimes Building is the first investment in Upstate by the new owner, a New York developer, who has spent 30 years in real estate focused primarily on the metropolitan New York City area. This property attracted his attention, because the Chimes Building is in an area that’s rapidly gentrifying. Just across the street, Ed Riley invested $76 million to restore the Hotel Syracuse (renamed the Marriott Syracuse Downtown) to its original 1924 luster. The 400 block of [South] Salina Street is witness to several major remodeling projects that are creating more apartments and office space. 


The Chimes Building has 120 parking slots adjacent to the building as well as a 560-car garage a few yards away. The location is not only situated within the central-business district and cultural center, but also close to Syracuse University and four major medical centers. The community transportation system (CENTRO) runs regularly scheduled buses to the university and medical complexes every 10 minutes for those who don’t want to worry about parking. For students, physicians, professors, and anyone who enjoys living downtown, this is the perfect location. The new landlord met with city officials prior to the closing, but has yet to file for a government grant to support the project, which is situated in an historic district.


The current demographics of downtown Syracuse also spurred interest in making this investment. Market-rate housing is at 99 percent occupancy. The average monthly rent is approximately $1,300. Downtown already has more than 3,250 residents (which represents a 43 percent increase in the past 10 years) and 272 units are planned or underway to satisfy demand. The Centro Transit Hub is located across the street from the Chimes Building and offers passengers not only local bus service but also a climate-controlled facility while waiting. Downtown Syracuse continues to experience a trend of suburban businesses relocating back to the urban center. The area now draws more than 2.5 million annual visitors to its museums, musical and theater performances, and other cultural programming. The development momentum in downtown is more than matched by investments in the University Hill area, a short walk from the city center. Upstate University Hospital, Syracuse University, the Syracuse VA Medical Center, Crouse Hospital, SUNY-ESF, and private developers have or are in the process of investing more than $1 billion in new and redeveloped facilities. Even the downtown streetscape has changed to accommodate green improvements and transportation upgrades, making downtown a more sustainable and accessible place. Other developments close to downtown — the Lakefront, Northside, and near Westside — are also propelling rapid changes to the urban landscape that are attracting both businesses and residents to downtown. 


History of ownership

James E. Heffernan, who owned Hub Realty, paid $653,000 to buy the property on which the Chimes Building sits, and another $2.4 million for the building’s construction. The structure, completed in 1929, was designed by the architectural firm of Shreve, Lamb, and Harmon, which also designed the Empire State Building (opened two years later). The title was transferred in 1946 to City Investing Co. of New York. Equitable Life Assurance Society of the U.S. provided City Investing a loan of $1,650,000 and held the first mortgage. Equitable also acted as the leasing and management agent. In 1952, a syndicate from Chicago called the Southeast Industrial District of Chicago paid $4 million to acquire the Chimes Building. In 1968, Investors Funding of New York assumed ownership, after paying more than $3 million for the privilege, and changed the name to the “500 South Salina” building. The building was vacant until Jan. 1971 when the remodeling was completed. Subsequent buyers included the Coolidge Group of White Plains and Syracuse Portfolio, LLC. of Garden City. Wells Fargo Bank, the mortgage holder for Syracuse Portfolio, obtained a $4.2-million judgment in 2008 against the mortgagee, which had defaulted on its payments. UA Properties bought the property in 2009 for $1 million and renamed the building UA Tower before selling the property in 2016 to 500 Salina Enterprises.


Project contractors

The developer has retained Phil Hopkins of Integrated Design, Inc., headquartered in Syracuse, to handle the HVAC, plumbing, and electrical and Harrington & Mosher Architects, P.C., also headquartered in Syracuse, to develop the design concept. The management of the property is handled by a New York City management company. Goodfellow Construction’s Tom Goodfellow, who has spent more than three decades in commercial and residential construction in the area, serves as the construction manager on the Chimes Building project. “The view from all four sides of the upper floors is breathtaking; it really showcases the beauty of city and the surrounding area,” adds Goodfellow. He and his son Ryan also own a nearby property — the former Goldberg Furniture building — at 476 South Salina St. The two are converting the two-story, 37,000-square-foot structure into a high-tech, office building.   


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