Chase Tower has new owner with big plans

One of the tallest skyscrapers in downtown Rochester has a new owner with plans to take much of the office space into a new direction.

Real estate development firm Gallina Development Corp. closed Tuesday on the 26-story Chase Tower. President Andrew R. Gallina declined to discuss the purchase price or what the company plans to spend on renovations. But Gallina's plans are sizable, from turning the top 14 floors into apartments to filling the long-empty underground concourse with restaurant and retail space.

The tower currently sits a little more than half full, Gallina said.

"I'm still a big believer in the value of downtown cores and downtown areas," Gallina said Tuesday. "You're seeing the rebirth of downtowns across the country in cities comparable to Rochester. People are recreating their downtowns. We know this is coming in Rochester, NY. This is a play for the future. We feel we want to be a player in that rebirth and help craft a new downtown into a vibrant center city."

Chase Tower sits on the corner of East Main Street and South Clinton Avenue in what's becoming ground zero for downtown real estate redevelopment:

•Winn Development is remaking the nearby Sibley Building into a similar mix of retail, residential and office space.

•Buckingham Properties and Morgan Management are using the bones of downtown's Midtown Tower as the foundation for the Tower at Midtown, which similarly will involve a mix of office and retail space and apartments.

•Pike Development Co. expected to start construction work within weeks on a three-floor addition to the Seneca Building that will house the Democrat and Chronicle Media Group. Telecommunications and data services company Windstream Corp. moved in 2013 into the Seneca Building, which was reconstructed out of the decades-old Seneca Building.

•Construction work is going on now to remake the National Clothing Co. building on East Main Street into a Hilton Garden Inn set to open later this year.

"We're all part of the epicenter of the resurgence of downtown," said Malcolm "Sandy" Wolcott, Rochester-based chairman of JPMorgan Chase & Co.'s northeast middle market banking business. JPMorgan was seller of the building.

Gallina specializes in commercial and industrial real estate, with its properties including the Winton Place Business Centre in Brighton, the Summit Point Business Centre in Henrietta, and the Elmgrove Crossings retail development in Gates.

Gallina said the interest in Chase Tower started with One East Avenue, a high-rise office building on East Main Street and East Avenue that the firm renovated in 2013.

"We started looking at opportunities," Gallina said. "Some of the conversation about turning downtown around and the lack of retail, the lack of restaurants — sometimes you look at the void where the opportunity might be."

Numerous details for the Chase Tower project are still being worked out, from the number of apartments and condos to what the rental rates might be. The name of Chase Tower will change, though Gallina said that a new moniker has not yet been determined.

Wolcott said once JPMorgan Chase finishes eliminating roughly 350 mortgage banking jobs locally this year, it will still have roughly 550 people working in the downtown tower, and has signed a long-term lease to keep them there. It also intends to keep its ground-floor banking branch in the tower.

Currently JPMorgan Chase has such operations in the tower as private wealth management, government banking, and its legal department. It is in the midst of eliminating more than 350 positions locally from its mortgage banking operations.

Such sale and leaseback arrangements are not uncommon in the business world as companies sell property and then stay there as a tenant. Buckingham Properties bought downtown's Xerox Square from Xerox Corp. in 2013, with Xerox remaining as the sole tenant.

"It isn't JPMorgan Chase Real Estate Company," Wolcott said. "We're a bank."

MDANEMAN@DemocratandChronicle.com

Twitter.com/mdaneman