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Oct 13, 2020

Krog suspends work on Trico because of Covid impact on hotels, offices

Krog Corp. has temporarily suspended work on its $87 million redevelopment of the former Trico Products Corp. manufacturing plant in downtown Buffalo, citing the impacts of the Covid-19 pandemic on the sectors it’s targeting.

The Orchard Park-based developer, which specializes in industrial and brownfield projects, is seeking to convert the 10-story structure into a mixed-use development, with office, residential and hospitality elements.

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CEO Peter Krog said the company expects to resume construction at some point, but is “assessing the impact that Covid-19 has had on the commercial real estate market and the hospitality industry due to the travel restrictions and the increase in the number of employees working remotely.”

He did not elaborate. “It’s just on hold for a while and the site is secure,” he said.

Plans call for creating 133 apartments and a 105-room extended-stay hotel in the 617,000-square-foot former industrial warehouse, along with 123,000 square feet of commercial space, including about 35,000 square feet for a local hi-tech anchor tenant.

The building at 791 Washington St. will also include 230 spaces of indoor parking and about 12,000 square feet of retail and food space.

The hotel – at one time envisioned as 230 rooms for both extended-stay and general guests – will be operated by Buffalo-based Hart Hotels. The apartments will consist of a mixture of one- and two-bedroom loft-style units, at market rates.

“The hotel as a part of the project is now problematic based on unsettled demand and financing concerns,” said David Hart, CEO of the hotel operator. “The apartment count may rise as a result.”

As part of the project, which began a year ago, Krog already completed asbestos and other remediation, as well as significant demolition work. That includes taking out 120,000 square feet of the “ice house” sandstone structure along Ellicott Street, and carving a 10-story atrium in the center of the building.

The developer also plans to rebuild the top three floors of the ice-house section to link both sides of the building, but has not yet started.

“The partnership needs time to figure it out,” Hart said. “It’s a good project in a great location but it does have complexities due to overall size and mixed use plan.”

“The hotel as a part of the project is now problematic based on unsettled demand and financing concerns. The apartment count may rise as a result.”

Published by The Buffalo News

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