Will economy force change in Midtown plans?

ROCHESTER NY - PAETEC's third-quarter results were announced Thursday, showing the company lost $355M in the quarter. Only a small part of that (less that $20M) was an operational loss, the rest resulting from its summer merger with McLeod USA. It is normal for companies to show losses after a major acquisition or merger, but many people in Rochester are worried about the timing with the ecomony.

There is a lot at stake. The company has plans to build a $100M headquarters at current site of Midtown Plaza in downtown Rochester. The plans were already scaled back from a 30+ story structure to a 10 story one, but now the question is will they be able to build anything? PAETEC CEO Arunas Chesonis says the comapany is strong and will survive.

The city owns the Midtown properties and the state has committed money to tear the current buildings down. The city released the draft environmental plan for the site, that shows the creation of news streets and 7 new blocks to break up the current single "mega-block." One of those blocks is supposed to be for PAETEC. The rest call for a hotel and a mix of residential/retail/and office space. No other developers have made commitments yet, probably waiting for PAETEC to make the first move.

There is also talk of keeping Midtown Tower and turning it into residential units. The building would still have to be gutted and would likely get a new facade. WHEC-TV is reporting today that several developers from in and out of state are have approached the city this week with an interest in redeveloping the tower. It makes sense to try to keep it - it would save the city the expense of tearing it down (especially since it couldn't be imploded due to the parking garage that is being saved beneath it).

The city pretty much admitted Monday that there wasn't a real backup plan if PAETEC backs out. It seems that Midtown Plaza, with the likely exception of the tower, will be torn down regardless. Many agree that while the state has committed at least $55M of the $65M needed to remove asbestos and tear it down the city should take advantage of it. As long as Midtown is standing, its preventing future development potential downtown. That said, it would be a shame to have an empty hole in the middle of the city waiting for a developer to build there.