In selecting a local development team to renovate Midtown Tower, Rochester Mayor Robert Duffy went against staff members, who favored a more conservative proposal by a New York City firm.

His choice, Christa Companies/Morgan Management, wants to fill the tower with 186 apartments and 24 high-end condominiums with garden terraces, views of Lake Ontario and price tags around $400,000. Those sale prices could rise, as $400,000 was the base price of Christa's Sagamore on East
condominiums. The more conservative proposal, by the Harmony Group, would have converted Midtown Tower into an apartment building.

"The staff recommendation was leaning more toward Harmony because the numbers were a little better," Duffy said. Christa/Morgan needs to borrow $65 million for its $71 million plan. Harmony would have required
$37 million in mortgage loans to complete a $44 million renovation, turning Midtown Tower into an apartment building.

Duffy said he preferred the Christa/Morgan plan because he wanted for-sale units. About 97 percent of downtown housing currently is rental. Christa/Morgan is a known commodity locally, he said, and its investing in downtown would do more to build local confidence than an out-of-town group. Christa/Morgan's combined portfolio totals 6.5 million square feet in hotels, commercial and multifamily properties, all in upstate New York, according to the city.

"The reality is the local development community ... is very strong," Duffy said. "There is no doubt other developers will see Christa/Morgan take Midtown Tower on, and they will be inspired to take on other aspects of this project."

This project ÷ the redevelopment of Midtown, making way for PAETEC Holding Corp.'s new headquarters ÷ was announced two years ago, when the state committed $55 million to raze the complex. Yet the complex still stands, and the city does not have a signed agreement with PAETEC.

Renovation of Midtown Tower, which requires stripping the building down to its structural steel, will be the first piece of the project, as Christa/Morgan hopes to begin work next August and be completed in 2012. The site for PAETEC will be ready no earlier than mid-2011 and construction would take 18 to 24 months to complete.

"Today's announcement really does reinforce progress," said Dennis Mullen, chairman and CEO designate of Empire State Development Corp. The troubled financial market has forced Christa to pull back on another high-end condo project, however ÷ the Charlotte Square development in the East End. That project would have borrowed from pension funds of the local building trades, but the fund's asset manager halted the deal. Dave
Christa, chief executive of Christa Companies, said his development company otherwise is continuing to buy and develop properties without interruption.

"We have a vision, and we are excited to begin," said Bob Morgan, president and CEO of Morgan Management LLC, a major property owner and investor in the Rochester area.

The tower also could have first-floor retail, second-floor offices, and a third-floor common area with fitness and media rooms. The next 10 floors would consist of 875- to 1,300-square-foot apartments with estimated monthly rents of $1,100 to $1,600. One- and two-level condos on the top floors would
range in size from 1,480 square feet to 2,750 square feet.

The project is eligible for tax abatements. And there will be 400 secured parking spaces set aside in the underground 1,820-space city garage.

Estimated rents are "in the range," for what is being charged downtown, said Heidi Zimmer-Meyer, president of the Rochester Downtown Development Corp.

Vacancy rates for market-rate units are just 3.8 percent.

BDSHARP@DemocratandChronicle.com

Additional Facts
Christa/Morgan
Christa Companies/Morgan Management has a combined 6.5 million square feet of commercial and residential development in upstate New York. Christa's notable projects range from Sagamore on East to the Eastman Theatre stage renovations. Morgan's portfolio includes Canal Ponds Office Park and about 30 multifamily properties in the Rochester area.

by RDDC.org