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

One year after suffering a major setback when Bass Pro Stores dropped plans for a Buffalo waterfront store, the city's Canalside project is alive and well.

The Central Wharf boardwalk is busy with people strolling along the Lake Erie shoreline or taking in the sights from one of the "Buffalo Sunset Chairs."

Farther down, the recently christened Peg's Park overlooking the Buffalo River has become a focal and meeting point. And customers waiting in line at Dug's Dive by the Niagara Frontier Transportation Authority's Small Boat Harbor patiently wait for food and chilled drinks.

"The biggest comment I get is: 'I can't believe this is Buffalo,' " said Tom Dee, president of Erie Canal Harbor Development Corp.

He was among four panelists who took part in the July 21 Business First Power Breakfast, which focused on waterfront development. Other panelists were developer Sam Savarino, Seneca Nation of Indians President Robert Odawi Porter and Brendan Mehaffy, executive director of the Buffalo Office of Strategic Development.

Their message was clear: Although great strides have been made at the waterfront, especially in the Canalside district, it remains a work in progress.

"To see things blossom down here has been a revelation," Savarino said.

He took a series of forgotten buildings from Buffalo's industrial past and brought them back to life, one by one.

The structures - most of them located on Perry Street, one block from HSBC Arena - are full of offices, apartments and restaurants.

"The buildings were symbolic of what didn't happen in Buffalo," he said. "And now, lo and behold, things are springing up around us."

That includes significant investments in Canalside by Seneca Gaming Corp., particularly in the infrastructure. It opened the Seneca Buffalo Creek Casino in July 2007.

Porter said Seneca Gaming, the casino operation of Seneca Nation of Indians, wants to have a final design by next spring for the permanent Seneca Buffalo Creek Casino. The project was scaled back from the original $330 million design unveiled nearly four years ago and now is focused solely on the casino, he added.

"We think the casino fits in wonderfully for what's happening on the waterfront," he said.

Restaurants and hotels that support the casino may be developed by private-sector interests, outside of those from the Seneca Nation. They could be constructed on non-sovereign territory that bridges between Seneca Buffalo Creek Casino and the Canalside property.

The two are separated by just three-tenths of a mile.

Porter said if no one produces a development plan, the Senecas might.

"We will step forward," he said.

An influx of visitors this summer to Canalside and the waterfront is giving people renewed confidence about the Inner and Outer harbors.

The ripple effect of Benderson Development Co.'s $30 million face-lift of the vacant Donovan State Office Building, along with an increased number of visitors to Canalside, may spark a wave of private sector-driven projects.

The eight-story, 160,000-square-foot Donovan building will be anchored by Phillips Lytle LLP. The law firm is leasing the top four floors.

"Clearly there have been bumps in the road in the past," Mehaffy said. "But if we continue along this new path, things will get better. Buildings that 10 years ago or 15 years ago were left dead are now being used."

Phillips Lytle will bring more than 300 workers when it moves to Canalside in January 2014. This summer, Buffalo Place Inc. and Erie Canal Harbor Development will present more than 300 special events ranging from concerts to yoga classes and historical talks.

Dee said he anticipates the events will attract more than 400,000 visitors to the Central Wharf portion of Canalside.

"Buffalonians are seeing Buffalo at its best," Dee said. "Right now we are at the tipping point."

Much more is needed for the waterfront to reach its potential, however.

Among the issues:

• Bids will hit the street this fall on a building re-creation of the downtown path of the Erie Canals. Construction should start by early next spring. The canals need a year-round element to attract visitors, and Dee envisions them being used for skating and recreational hockey games,

"They have to be winter-friendly," he said. "Other communities embrace winter; we need to do it better."

• Several vacant parcels, including the bulk of the former Memorial Auditorium site, must be developed. Canalside could house 1.1 million square feet of office, retail, restaurant and hotel space.

• Canalside must evolve into a 12-month destination, not just be a popular spot during warm-weather months.

• A connecting bridge between the Inner and Outer harbors must be constructed. The project, with a price tag approaching $100 million, could be built within five years. Two sites are being considered, including the foot of Main Street behind HSBC Arena.

The bridge could carry 10,000 cars a day, according to Dee.

"It is an absolute critical link," he said.

"It's a piece of a much larger puzzle," Mehaffy added.

• A definitive development plan for the vast tract of vacant Outer Harbor must be formulated.

• More private-sector investment must be encouraged.

"My phone is ringing more now than it was six months ago," Dee said. "Momentum will continue as long as people see progress."

• A stronger, collaborative effort has to happen between the City of Buffalo, Seneca Nation of Indians and Erie Canal Harbor Development. Seneca Gaming has already offered a $1 million pool for infrastructure and landscaping projects that could emerge along the borders of its sovereign territory where the casino sits.

"We need to find a way to integrate the casino with what's going on at the waterfront," Porter said.

• Savarino said the private-sector development community is looking for a consistent blueprint or master plan from the City of Buffalo for anything connected to the waterfront.

"We need to know where we fit," he said.

Also coming are more basic items such as better directional signage, according to Mehaffy.

Dee, meanwhile, calling the waterfront "Buffalo's new front porch," said he is encouraged by the public's strong response to Canalside this summer.

Added Mehaffy: "Canalside has created its own momentum."