By JAMES FINK
jfink@bizjournals.com | 716-541-1611

Erie Canal Harbor Development Corp. hopes the decision to put the vacant Gen. Donovan State Office Building in the hands of Benderson Development Co. will spur other private sector-driven efforts at Canalside.

On July 19, it named Benderson redeveloper of the building. Phillips Lytle LLP would anchor the eight-story building in the proposed $30 million project. The law firm has agreed to lease 85,000 square feet on the Donovan's top four floors. Benderson was the only bidder that responded to an RFP issued in early May.

While Canalside has seen a number of developments take place, the deal marks the first private-sector investment in the 20-acre site on lower Main Street in Buffalo. It comes nearly a year after Bass Pro Shops decided not to build a 130,000-square-foot store where Memorial Auditorium once stood. Since then, Erie Canal Harbor Development staff have ramped up efforts on other aspects of Canalside, including expanding the Central Wharf boardwalk, adding amenities and working with Buffalo Place Inc. to produce more than 300 area events this summer.

Between late June and mid-July, more than 180,000 people visited the Central Wharf and a total of 450,000 are expected this summer.

Phillips Lytle and its staff of more than 300 are slated to move to the Donovan building by January 2014.

"There's no reason why this can't be the catalyst for future private-sector investment in Canalside," said Eric Recoon, Benderson executive director of development and leasing.

Phillips Lytle spent more than two years on a site search for new office space. It leases 85,000 square feet at One HSBC Center, located two blocks from Canalside. Managing Partner David McNamara said that by moving into the Donovan building and Canalside, the firm's partners saw an opportunity to be, in effect, urban pioneers.

"The appeal of Canalside just carried the day," he said. "This is a private-sector investment that may fuel other private-sector investments."