A $71.5 million sale of the Clinton Crossings medical complex is in the works.
If it closes, the sale would be the largest deal yet to come out of the protracted settlement of Rochester entrepreneur Anthony Costello’s estate.
A significant player in area real estate and development, Costello’s March 2016 death threw the affairs of several of his Rochester area properties into a state of turmoil from which they are only now emerging.
Clinton Crossings’ Brighton campus houses several University of Rochester Medical Center outpatient facilities and medical practices.
The medical complex’s sale currently is wending its way through Monroe County Surrogate Court. Its completion would be a major step toward the settlement of Costello’s estate.
A Rochester entrepreneur and real estate magnate, Costello developed Clinton Crossings in the 1990s on acreage that not long before had been one of the last family farms in Brighton.
Anticipating a trend that would see hospitals and health systems move much of their inpatient hospital care to ambulatory settings, to develop Clinton Crossings he custom built and leased facilities to medical organizations.
URMC is the largest tenant of the Brighton complex, which rose just as UR was contemplating the shift to outpatient care. A partial list of URMC facilities currently located on Clinton Crossings’ acreage includes UR Medicine’s Cardiac Rehabilitation Center, its medical imaging facilities and its Allergy and Immunology Clinic and Rheumatology Center. The complex also has non-UR medical facilities including the Borg and Ide Imaging group’s main facility and headquarters.
Documents filed as part of the settlement of Costello’s estate show that New York City-based Blue Sky Real Estate Services & Development put in a $71.5 million offer on Clinton Crossings in March. Blue Sky runs facilities for Columbia University, the Columbia University Medical Center, Emory University, Northwell Health, Barnard College and other similar organizations.
Surrogate Court Judge Christopher Ciaccio inked an order approving the deal in late July.
As previously reported by the Rochester Beacon, the Reserve, a Costello-developed exclusive but long troubled Brighton residential development, sold to a company headed by Henrietta developer Frank Imburgia earlier this for month for $7.2 million.
Days later, a $17.5 million deal closed in which Fairport-based Streamline Real Estate Partners acquired the CityGate, an upscale Rochester plaza at East Henrietta and Westfall Roads.
CityGate and the Reserve had each been under some stress before Costello’s death. His passing did little to ease pressure on the developments.
CityGate is home to this area’s only Costco Warehouse Store and to an REI co-op outdoor store. Both REI and Costco own their buildings. Much of the retail space Costello built and hoped to lease to shops and restaurants stands vacant, however. Court records show that as recently as last month, the city of Rochester was trying to claw back $300,000 in tax benefits it had granted to CityGate on grounds that the development had long failed to live up to terms of a payment-in-lieu-of-taxes deal.
After encountering fierce resistance from Brighton neighbors, Costello dropped his original idea of making the Reserve a more than 300-home, gated community. By the time Costello died only 49 of the 127 homes then built were sold. After his death, new construction stalled, and Reserve homeowners since have complained that the property has been poorly maintained. They also railed at being locked out of the development’s $7 million clubhouse, whose spa, pool, theater, meeting rooms and wine lockers were supposed to be perks that Reserve residents’ $450 month homeowners association fee entitled them to.
Due to legal entanglements, debts and dissension among Costello’s heirs, the CityGate and Reserve deals took many months to work their way through probate.
How soon the Clinton Crossings sale might close is not clear.