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Statler Hotels - Buffalo, NY
(Now known as the Statler Towers)

The second Statler Hotel in Buffalo was opened May 19, 1923.   Ellsworth's first Buffalo hotel was then renamed the Hotel Buffalo.

Conversion website.


The following article was taken from the Buffalo Business First Newspaper:

Statler on market for $7.5M

James Fink
Business First
From the December 19, 2005 print edition

The Statler Towers, a landmark on the Buffalo skyline, may begin 2006 with a new set of owners.

Orchard Park businessman Gerald Buchheit confirmed that he has put the hotel-turned-office-building on the real estate market with an asking price of $7.5 million.

While the building has been on the market for just a few weeks, Buchheit said he has heard from a number of prospective buyers, including local interests and out-of-town investment groups.

He said he is confident that a buyer will emerge, especially given the interest the Statler has already drawn.

Buchheit has owned the Statler for 15 years, but he has decided to sell the building and focus on the proposed expansion of his two suburban shopping centers - Orchard Park's Quaker Center and Windsor Park North in Amherst.

"My focus is really shifting more towards retail," Buchheit said.

Quaker Center is about to undergo a 300,000-square-foot expansion that will bring the shopping center's total square footage to more than 700,000. Marshall's has signed a lease to occupy approximately 30,000 square feet in the expanded portion of the plaza.

Quaker Center anchor tenants include a Target department store and a Regal Cinemas movie complex.

Buchheit said he is developing an expansion plan for the Windsor Park North center that could bring several high-profile tenants to the Transit Road plaza. Windsor Park is anchored by Wegmans and Target.

The Statler occupies a prime downtown location. The 84-year-old building, whose design was copied by the Statler hotel chain in Chicago, is home to a diverse range of clients including law firms, communications companies and CPA offices.

The 18-story, 800,000-square-foot building last functioned as a hotel in the late 1970s. At least three of the middle floors have not been altered since.

In recent years, the Statler was considered by the Seneca Gaming Corp. as a possible location for its downtown Buffalo casino, but the Indian nation ultimately decided to build its gaming venue in the Cobblestone District.

The building has landed several high-profile tenants recently, including the Barnes Firm, which opened a satellite office on the ground floor.

The operators of the Park Lane Restaurant have taken over the catering functions in the Statler's grand ballroom and recently restored Terrace Room. Besides hosting weddings and receptions, the rooms have been used for a series of concerts, including shows by Rusted Root and Hootie and the Blowfish.

Buchheit said prospective buyers have floated such ideas as using portions of the building as a boutique hotel or converting the upper floors into residential units.

Buffalo Mayor Anthony Masiello said he is encouraged that the Statler is attracting the eye of out-of-town investors, continuing a trend that has become more common in local real estate circles.

"It is an asset to downtown," Masiello said. "I could see it serving a multitude of purposes. Any time a building sees new investment, it also sees a new sense of energy."

The building was constructed in 1921 and serves as one of the architectural and historic mainstays surrounding Niagara Square.

The Niagara Square area is about to undergo its own renaissance once the construction of the $100 million federal courthouse begins. Demolition work on the site is slated to start this winter.

2005 American City Business Journals Inc.


Article from AP News story:

Developer won't buy, rehab landmark downtown hotel

BUFFALO, N.Y. A Buffalo-based developer has decided not to purchase and renovate a landmark hotel in the city's downtown area. Samuel Savarino tells The Buffalo News that he let a purchase contract for the Statler Towers expire earlier this week. The president and C-E-O of the Savarino Companies had been considering buying the 73-year-old building and converting it into a combination hotel-office-condominium complex.

Savarino estimated that such a project would have cost as much as 70 (m) million dollars.

For decades the site was home to the Hotel Statler. As the flagship of the Statler chain, the 18-story, eleven-hundred-room hotel hosted American presidents, Hollywood stars and other dignitaries.

Hilton Hotels bought it in the 1950s, and it went through a succession of owners in the following decades.

Statler Towers is now an office building.

Copyright 2006 Associated Press.

-------------------------------------------------------------

Same story as above, but expanded article from The Buffalo News website:

Sale, rehab of Statler called off

Savarino had considered a renovation at a cost of up to $70 million

By SHARON LINSTEDT
News Business Reporter
4/20/2006

A local developer who was eyeing downtown Buffalo's Statler Towers for conversion to a hotel/office/condominium complex has decided against buying the landmark.

Samuel J. Savarino, president and CEO of Buffalo-based Savarino Companies, confirmed Wednesday that he let a $7.5 million purchase contract for the building expire as of midnight on April 18.

"We decided to let it lapse," Savarino said. "It's a significant Buffalo building that needs to be dealt with in a meaningful way. Maybe we'll get another bite at the apple under more favorable conditions."

Savarino, who has had the building under contract since last fall, had planned to partner with Cendant hotels and another unnamed investor to overhaul the once-grand Hotel Statler from a tired office building to a vibrant mix of hotel use, offices and residences.

"We still think its a viable, exciting concept that would be great for that building and great for downtown Buffalo under the right circumstances," Savarino said.

Statler Towers, Buffalo, NY
Photo credit:  Harry Scull Jr./Buffalo News
Owner Gerald Buchheit says there are other parties interested in
buying the 73-year-old landmark Statler Towers.

Savarino and his investment partners had estimated that interior and exterior renovations of the Niagara Square landmark would have run in the $50 million to $70 million price range. If their deal would have consummated, they planned to employ a mix of private capital and various tax credit programs to fund the ambitious redevelopment.

They also hoped the City of Buffalo would aid the project by building a parking garage to service the building on a nearby surface parking lot at South Elmwood Avenue and West Mohawk Street.

Statler owner Gerald Buchheit said he's not dismayed by Savarino's decision. Buchheit, who bought the 73-year-old hotel-turned-office building through a foreclosure auction in 1992 for $2.25 million, said the building is now officially back on the market.

"I want to sell and there's other people out there who have expressed interest. Sam's contract prevented us from talking to other parties and now we're in a position to do that," he said.

James Militello, of Buffalo's JR Militello Real Estate, said he considers the once-elegant building a very viable acquisition target.

"In the past we've had people who were interested in it, and I have no reason to think they wouldn't still be interested. We'll be getting in touch with them and let them know it's available," Militello said.

George Hamberger, a broker with Hunt Commercial Real Estate, said he has an international investor who toured the building and remains extremely interested.

Built in 1923 by Ellsworth Statler as his flagship hotel, the 18-story, 1,100-room hotel played host to U.S. presidents, national entertainers and scores of other dignitaries. The Statler chain sold it to the rival Hilton Hotel group in the 1950s, which continued its run as a hospitality property.

In 1973, a local investment group, led by Robert Zugger and William D. Hassett bought the building and initiated its conversion to an office tower. A Kuwaiti consortium acquired it in 1981, followed by additional title transfers that ended with foreclosure action against Niagara Square Associates and its eventual creditor-forced foreclosure auction.

Buchheit had floated the idea of reintroducing a hotel operation to the building soon after he bought it, and had secured $15.5 million in financing from the Erie County Industrial Development Agency to aid the effort, but later scrapped the project.

Over the past decade, the building has seen a laundry list of tenants depart, leaving the Statler with a 40 percent vacancy rate. Three floors - 9 through 11 - sit completely idle as mothballed hotel rooms.

In the past few years, the Statler was eyed by the Seneca Nation of Indians as a part of a casino development, but that possibility faded away when the Senecas turned their attention to a Cheektowaga site, and later landed in the city's Cobblestone District.

In June 2003, chunks of decorative facade fell from the top of the structure tumbled down onto Delaware Avenue, prompting emergency repairs. Meanwhile, tenants have continued to complain about lack of building maintenance, particularly the tower's frequently malfunctioning elevators which run on an antiquated 25-cycle electrical system.

Buchheit has made no secret of the fact that in its current condition, the Statler Towers is a money-losing operation. He has gone to City Hall seeking property tax reductions on more than one occasion, and in 2004, the Statler ended up on the list of properties slated for auction due to non-payment of 2002 and 2003 taxes totaling $348,642.

An 11th-hour payment "under protest" saved the Statler from the auction block, but the building will be heading back to auction this fall if Buchheit doesn't pay outstanding 2004-05 taxes, sewer rent and penalties totaling $189,222. The building's current tax bill of $155,654 also remains unpaid.

Earlier this month, the Statler's second largest tenant, the state Attorney General's Buffalo office gave notice that it will depart when its lease expires next February, further draining its future revenue stream.


The following article was taken from the Buffalo Business First Newspaper:

City will foreclose on Statler

James Fink
Business First
From the Wednesday, May 17, 2006 printed edition

The Statler Towers, a historic downtown landmark that dominates Niagara Square, is headed for a foreclosure sale.

According to documents supplied by the City of Buffalo's Department of Assessment and Taxation, York Statler Inc., owner of the former hotel-turned-office building, owes Buffalo nearly $350,000 in back taxes and foreclosure notice fees dating back to Buffalo's 2004-2005 fiscal year.

York Statler has until Sept. 1 to pay Buffalo the money or the property will be included in a three-day foreclosure sale, set to begin on Oct. 23.

City officials expect to auction off more than 2,900 properties during the sale.

The pending foreclosure sale is the latest chapter in the building's checkered recent past.

Last year, Orchard Park developer, Gerald Buchheit -- the major principal in York Statler -- put the building on the real estate market.

One development group, led by Sam Savarino, considered purchasing the property but ultimately walked away from the deal earlier this spring.

City records show the building has an assessed value of $3.4 million.


The following article was taken from the Buffalo News Newspaper:

British developer purchases the Statler
Plans call for a hotel, offices, condominiums

By SHARON LINSTEDT
News Staff Reporter
6/14/2006

A British developer has purchased the historic Statler Towers and plans to renovate it into a residential, hotel and office complex.

Bashar Issa, the Iraqi-born chief executive officer of BSC Group, declined to disclose the purchase price, but said it is only the beginning of his investment in the former hotel building.

"It's going to take $60 million to $80 million to accomplish the things I'd like to do there. It was once such a beautiful, significant building, it deserves to return to that status," said Issa, head of a development company based in Manchester, England.

Issa said his plans call for converting the top 14 floors of the 18-story Statler into condominiums.

IssaBashar.jpg (53401 bytes)
Photo credit:  Ronald J. Colleran/Buffalo News
Bashar Issa heads a development company based in England
that has executed several high-profile building conversions.

He expects to create as many as 280 units, with one- and two-story dwellings, in the $150,000 to $275,000 price range.

A 150-to-200-room, four-star hotel would occupy the second through fourth floors.

The ground floor, mezzanine and basement levels would be filled with office and retail tenants, plus a fine-dining restaurant, small movie theater and a health club.

Issa, whose company has executed several high-profile building conversions, as well as new-build, multiuse developments in Manchester, recently met in Buffalo with representatives of architectural firms, engineers and construction firms and bankers.

"I want to employ a team of local experts for this project. I will draw on my experience, but it's important to have people with deep local knowledge I can rely on when I'm not here to be hands-on," he said.

Issa acknowledged that as an "out-of-towner," his ambitious proposals for the building will be met with some skepticism.

"All I can say is, I'm not seeking financing to buy the building," he said. "This is not a case of having a 20 percent stake and being able to walk away if it doesn't work out. I'm committed financially and personally."

The 28-year-old developer, who has dual British-Iraqi citizenship, has lived in England since he was 8 years old. His degrees in finance and international banking led him into real estate development with special emphasis on reuse of older buildings.

Issa's company, whose motto is "Cherish the past, adorn the present, construct for the future," has turned existing structures in England, including a former cotton spinning plant, into luxury residential/retail/office complexes.

With a real estate portfolio that includes nearly $400 million in housing and mixed-use projects over the past decade, Issa said he has the means to privately finance the entire Statler renovation.

"I'm not going into this asking for anything. As things move along, there are probably historic tax credits and other abatement programs that will be available, but I'm not counting on a public handout," he said.

Issa became interested in Buffalo in 2005 after viewing commercial property ads on the Internet. He was initially intrigued by the dormant AM&A's department store building on Main Street in downtown Buffalo, and contacted Hunt Commercial Real Estate broker George Hamberger, who has been marketing that property.

At Hamberger's urging, Issa traveled to Buffalo in January, touring several downtown buildings in need of significant investment and rehabilitation. When he saw the Statler, he knew the search was over.

"I walked into the lobby and just said "Wow.' I quickly appreciated how fantastic it once was and how it could be again," Issa recalled.

Hamberger's recollection was how Issa startled him by announcing, "I want to buy it," after spending only a few minutes in the sprawling building.

"The good news is he still felt that way after he spent seven hours going over the entire building. He fully understands what he's getting into and is more enthusiastic than ever," Hamberger said.

But Issa had to curb his enthusiasm for another three months while Statler owner Gerald Buchheit waited for a previous purchase offer from Buffalo developer Sam Savarino to run its course in mid-April. When Savarino decided to let the offer expire, Issa quickly opened negotiations with Buchheit.

Buchheit was not available to comment on the deal.

Issa said he expects it will take three to four years to redo the entire building and hopes to retain as many tenants as possible as the makeover proceeds.

"This is going to be a period of big change," he said, "but I will meet with everyone and see how we can accommodate them."

Buchheit, who acquired the building for $2.5 million in a 1992 foreclosure auction, had made no secret of his interest in finding a buyer. Buchheit had held out hope the office complex, which has a 40-plus percent vacancy rate, would have a role in any downtown casino development.

After the Seneca Nation of Indians made it clear the Statler would not be part of their casino plans, Buchheit racheted up his efforts to sell the building. Local developer Savarino Cos. let a $7.5 million purchase offer lapse after determining a planned hotel/office/residential development was not workable under terms of that deal.

At that time, it also was disclosed that Buchheit has delinquent Buffalo property tax bills totaling more than $189,000 dating to 2004. If left unpaid, that would put the building on the city auction block in October. He also owes 2005-06 taxes totaling an additional $155,654.

Built in 1923 by Ellsworth Statler as his flagship hotel, the 18-story hotel hosted presidents, big-name entertainers and scores of other dignitaries. It was sold to the Hilton Hotel group in the 1950s and remained a hotel into the 1970s, when a local investment group bought it and began converting it to an office tower.

A Kuwaiti consortium owned it briefly in the early 1980s, then it entered a period of financial upheaval and physical neglect, leading to the 1992 foreclosure sale to Buchheit's York-Statler group.


The following article (similar to the one above) was taken from the NBC affiliate WGRZ (Buffalo, NY) News website.

Statler Towers Sold

Posted by: Maria Sisti, Assignment Editor
Created: 6/14/2006 1:51:20 PM

BUFFALO, N.Y. (AP) -- A downtown Buffalo landmark has been sold to a British developer with plans to turn the building into a residential, hotel and office complex.

Bashar Issa tells The Buffalo News that it will take between $60 and $80 million to return the historic State Towers to its past glory. His BSC Group -- based in Manchester, England -- plans to convert the top 14 floors of the 18-story Statler into condominiums, with retail stores, offices, restaurants and a hotel on the lower floors.

Issa bought the property from Statler owner Gerald Buchheit, who bought the building in 1992 at a foreclosure auction.

The Statler Towers had several previous owners. It was built in 1923 by Ellsworth Statler as his flagship hotel. During its 50-year history as a hotel, the building hosted presidents, big-name entertainers and scores of other dignitaries.


The following article was taken from the Buffalo Business First Newspaper:

Statler memorabilia sought

Business First of Buffalo - Tuesday, October 9, 2006
by James Fink - Business First

The new owner of the Statler Towers is looking to its past to help with its future.

British businessman Bashar Issa, whose company BSC Group bought the downtown Buffalo landmark, is looking for any items connected with the building's past for a display and possible DVD, web site and book, detailing its history.

The memorabilia will be put on display in the building's main lobby.

"We have collected some interesting items already, but we need anyone and everyone who has a connection, a story, a memory about an event they attended, a photo that was taken, a job they have had, or a celebrity that was spotted to share them with us," Issa said.

The 17-story, 1,100-room hotel opened in 1928, nine years after businessman Elsworth Statler envisioned the project. During its reign as a hotel, the Statler played host to a number of high profile guests and events. Among those who stayed there include Elvis Presley and John F. Kennedy.

The hotel began its gradual shift into an office building in the mid-1960s and welcomed its last hotel guest in 1982.

Issa said he expects to spend more than $80 million transforming the building into a multi-use facility include bringing upscale condos, office space and hotel rooms. The renovation work is expected to start this winter.

The DVD, website and collector's book are due to come out in early 2007.

Historical information can be sent to www.thestatler.com or mailed to Statler Memory Lane, c/o Travers Collins & Co., 726 Exchange St., Suite 500, Buffalo, NY 14210.


The following article was taken from the NBC affiliate WGRZ (Buffalo, NY) News website.

Calling All Statler Memories

Posted by: Julie Wolfe, Reporter
Created: 10/11/2006 5:17:31 PM

It was one year after the peace bridge opened. Top hats were in and Pierce Arrow cars filled the streets. The Statler Hotel opened its doors as the model of luxury.

“It’s an iconic building,” George Hamberger says. He’s the real estate agent that brokered the deal with the Statler’s new owner, Bashar Issa. He’s also the local point man for the renovation.

On the other side of the city sits Tom Zugger. His dad ran the Statler through the 1970’s. It holds his childhood memories, along with the memories of Buffalo:
"The one that probably stands out the most was the blizzard of '77. That became the gathering point in downtown buffalo. We had people sleeping in the hallways, in the lobbies all over the floor."

Now, almost 80 years after the Statler opened, decades into its decline, and on the verge of its rebirth; there's an organized effort to take a trip down memory lane.

It’s a trip paved with Statler silverware, postcards, and ashtrays. The new owner wants to do a tribute to the building's history using your memories.

"I'm really excited,” Hamberger says (he’s the one organizing the memorabilia effort).”I think we're going to hear from a lot of people, we already have actually, because it's such an iconic building."

Right now, it's a small collection of Statler memorabilia. But remember, this is the place of thousands of weddings, celebrations, inaugurations. It’s a place of memories, so what’s yours?

The developer wants to collect stories as well as physical pieces of memorabilia. You can send either to:

Statler Memory Lane
C/o Travers Collins & Co.
726 Exchange Street
Suite 500
Buffalo, NY 14210


The following article was taken from the Buffalo Business First Newspaper:

City officials get look at Statler plans

Business First of Buffalo - November 21, 2006
by James Fink, Tracey Drury
Business First

City of Buffalo representatives Tuesday morning took their first official look at the proposed $80 million renovation plan for the historic Statler Towers.

Architects representing British investor Bashar Issa and his BSC Development Group met with the Buffalo Planning Board in their first step towards gaining approval from Buffalo officials to transform the 18-story, 550,000-square-foot building that overlooks Niagara Square.

"We want to bring it (the Statler Towers) back to its original appearance," said Rick Sanders, an architect with Silvestri Architects. "We're looking at a restoration. We're not changing anything."

The planning board, as anticipated tabled any formal action pending a environment reviews and an upcoming hearing before the Buffalo Preservation Board.

Sanders said he expects the restoration project to be completed by late 2008 or 2009.

BSC Development wants to use the lower three floors for retail, restaurant and entertainment uses while committing to keeping office tenants in floors three through six. Currently, about 40 percent of the Statler is used for a myriad of offices.

A 150-room hotel is slated for the seventh through the ninth floors and the upper eight floors will be used for upscale condominiums - including some two-story units.

BSC wants to build a 10-story, 500-car parking lot for the hotel and condo tenants that will rest on a lower three-story portion of the building that faces Franklin Street. That portion was designed to hold an 18-story tower and easily accommodate the parking garage, Sanders said.

Besides restoring the Statler, Issa, last month, also announced plans to construct a 40-story office tower on South Elmwood Avenue one block from the Statler.


The following article was taken from the Buffalo Business First Newspaper:

Lewiston company to repair Statler elevators

Business First of Buffalo - November 24, 2006

The new owners of the Statler Towers building in downtown Buffalo have taken a giant step forward with one of the most pressing issues relating to the restoration of the faded, historic landmark.

BSC Development Group, the Manchester, England-based owners of the former hotel-turned-office building have awarded an elevator repair contract. Elevator service -- or the lack of it -- has been something of an Achilles Heel for the building and its tenants in recent years.

DCB Elevator Co. Inc. of Lewiston was awarded the contract to begin repairs to the building's main elevators. Terms were not disclosed.

Elevator service has been a hit-and-miss proposition in the building for the past few years. Since the freak October snowstorm, the main elevators have been without service and tenants have been forced to use a freight elevator.

New owner Bashar Issa pledged to restore elevator service before he did anything else in the building.

Issa is planning $80 million worth of renovations to the building as part of a plan to transform into a mixed-use complex with hotels, condominiums, office and retail space.

The work is expected to be completed by late 2008 or early 2009.

R&P Oak Hill LLC of Blasdell has been retained as the project's construction manager and Silvestri Architects of Amherst has been hired as the architectural team. Tredo Engineers and IBC Engineering, both of Buffalo, have retained as the respective structural and mechanical engineers.


The following article was taken from the Buffalo News Newspaper:

City reviews plans for Statler renovations

By SHARON LINSTEDT
News Staff Reporter
11/22/2006

Plans for the $80 million restoration and redevelopment of downtown Buffalo's Statler Towers are now under official review by the city.

A representative of British developer Bashar Issa presented the city Planning Board with preliminary plans to convert the former hotel to a mix of residential, hotel, office and retail use. In addition to a complete interior makeover and facade restoration, plans call for construction of a 10-story parking deck on top of an existing three-story section at the rear of the building.

Rick Sander, of Amherst-based Silvestri Architects, presented the plans Tuesday morning, stressing Issa's desire to give the faded Niagara Square building a new beginning.

"The goal is to bring the Statler back up to its initial glory," Sander said. "The uses will be changing, but at its heart this is a restoration of one of Buffalo great buildings."

Issa, who is in Manchester, England, sent a message to the board via Sander, expressing regret for not being able to appear in person to unveil the renovation plans. The developer, who recently spent a month in Buffalo working on plans for the Statler and a new 40-story office tower he proposes building on South Elmwood Avenue, said he was there "in spirit."

Issa bought the circa-1923 hotel, which was converted to office use in the 1970s, in August for $3.5 million. The 550,000-square-foot structure at 107 Delaware Ave. is currently 60 percent vacant.

Plans put before the Planning Board call for floors 10 through 18 to be converted to approximately 140 condominiums. A 150-room hotel will be located on the seventh through ninth floors, with offices on floors three through six.

The lower floors will house a collection of restaurants, shops, a health club and services for office and residential tenants, as well as hotel guests.

Sander estimated the ambitious makeover will be complete by late 2009.

The building's new owner also plans extensive improvements to its exterior, including a dramatic landscaping effort aimed at "softening" its presence on Niagara Square. Talks have begun with the city on a proposal to extend or "bump out" the sidewalks surrounding the building, making room for several pockets of trees, bushes and benches around its perimeter.

Another facet of the exterior plan is installation of a traffic island at the corner of Delaware Avenue and Niagara Square, to create a more appealing gateway to the square and make the intersection safer for pedestrians.

The intersection enhancements would also tie into the $120 million federal courthouse project, slated for construction directly across Delaware.

North Tonawanda landscape architect Joy Kuebler is working on the exterior improvements.

Issa also plans to restore the historic features of the building's facade and to add lighting to play up the exterior features.

The new owner recently signed a contract for more than $1 million in updates to the building's main elevators. The long-unreliable elevators stopped operating last month when the freak snow storm permanently knocked out their antiquated 25-cycle power supply. Work has also begun to upgrade the building's heating and cooling systems.

The Statler plans will require action by the Planning Board, as well as the Preservation Board and full Common Council.

Planning Board members also received plans from Kaleida Health to demolish a vacant, 14-story medical tower at 50 High St. Mark McGovern, project manager for the Buffalo Niagara Medical Campus, explained a request to have the Empire State Development Corp. act as lead agency in razing and site preparation.

"We have no concrete plans, but it will create an attractive shovel-ready site," McGovern said.

The building, which stands like an island surrounded by surface parking lots, is located at High and Washington streets, directly west of Buffalo General Hospital, at the northern end of the fast-growing medical campus. 50 High St. has long been eyed as a prime site for future medical-related growth, including a $21 million proposal in the mid-1990s from Amherst developer Paul Ciminelli for a medical suite/retail complex.


The following article was taken from the Buffalo News Newspaper:

Statler to be a hotel again

By SHARON LINSTEDT
News Staff Reporter
05/15/2007

The storied hotel rooms in Buffalo’s Statler Towers could be welcoming guests again by next spring as its new owner fine-tunes plans for the building’s rebirth.

British developer Bashar Issa has decided to keep three floors of original, mothballed hotel rooms intact and outfit them in an art deco theme. Earlier plans called for the existing rooms to be gutted to make way for contemporary rooms and a reconfigured layout.

“By restoring what’s there, we’ll end up with a completely unique product,” said Issa, adding that the rooms are perfect candidates for a “back to the future” makeover.

IssaBashar2.jpg (19931 bytes)
Photo credit:  Harry Scull Jr./Buffalo News
British developer Bashar Issa looks over one of the Statler Tower’s

mothballed hotel rooms he plans to return to use in a
“back to the future” makeover with an art deco theme.

“We’ll put in new systems and bring in an interior stylist to get the right look,” he said. “They’ll feel historic and nostalgic, yet meet modern standards for comfort and luxury.”

The original hotel rooms, on floors nine through 12 of the 74-year-old building, have sat untouched since the former Statler Hilton was converted to an office tower in the 1970s. Work already is under way to refurbish the 210 idle rooms, and Issa’s BSC Group is holding talks with a potential hotel operator with the goal of opening the hotel in the next 12 months.

Issa is in Buffalo for several weeks to advance plans for the $130 million Statler overhaul, as well as blueprints for a new $361 million, 40-story commercial tower, which, if built as planned, would be the city’s tallest building.

Since purchasing the Statler last August for $3.5 million, Issa and his Manchester-based BSC Group have invested $1.8 million to get the building’s outdated main elevators into working order. The first three elevators are expected to be back on line in the next several days, with the remaining three undergoing similar work this summer.

Meanwhile, Issa will begin installation of new marble floors in the lobby and lower level, which will feature sections of translucent stone that will be illuminated from beneath. The new floors will be accented with cut marble medallions bearing an “S” monogram.

Another key project will be the installation of about 400 wood-frame replacement windows on the first three floors of the building. The windows are replicas of the building’s original window designs.

Exterior upgrades also are coming soon. The building’s weathered awning over its Delaware Avenue entrance will be coming down, the brick facade will be repaired, and new lighting will be installed.

In addition to altering plans for the boutique hotel, Issa also is rethinking the mix of residential and office floors.

While original plans called for as many as nine of the building’s 18 floors to become condominiums, with just three floors of offices, he is now considering boosting the office component.

“We’ve had considerable inquiries about office space, so we’re likely to have six or more floors of offices,” the developer said.

The multiphase Statler project is expected to be completed in 2010.

Issa also is laying the groundwork for the 40-story tower project through development of marketing materials targeting companies in such places as Toronto, New York and Chicago to take advantage of Buffalo’s comparatively low cost of doing business. He also confirmed having preliminary discussions with a local company interested in taking as much as 250,000 square feet in the 1.2 million-square-foot skyscraper.

The tentative timetable for the tower would see construction start in 2009, with completion in 2011.

Issa, who was drawn to the Statler Towers because of its historic nature, also confirmed he has made several trips to the Central Terminal complex and might be interested in redeveloping the long-neglected Buffalo landmark.

“It’s too early to say if anything will come of it, but it has a lot of potential,” he said.

Issa has had preliminary conversations with the Central Terminal Restoration Corp., the nonprofit group that owns the historic rail station, as well as with Common Council President David Franczyk.

“I think we could start with a mixed-use project in the baggage building and go from there. I’d like to see Amtrak move its local operations back there,” Issa said.

The developer said he’s serious enough about the terminal to have his architects sketch out preliminary reuse plans.


The following article was taken from the Buffalo Rising website:

statlertowers-restaurant

Statler's Mezzanine Restaurant

Posted by: "queeneyes", Reporter
Posted: 08/27/2007 9:35 PM

The Statler crew has been busy rehabbing what will one day be a 3000 sq’ mezzanine restaurant that will overlook the ground floor lobby. It will also overlook a large sub-ground floor fountain that will be the focal point of the room. The mezzanine’s arched windows have been removed to allow for open viewed seating, and the backdrop drywall partitions have been torn down.

That leaves a wide-open expanse for people to enjoy open views in all directions. The cheap iron railings will all be replaced with reproduced marble railings that now line the north section of the mezzanine. The plaster casts are setting at this very moment.

You might ask how visitors would even get to the mezzanine restaurant. That’s because the original grand staircase was buried behind drywall as well. A previous owner had slapped up the cheap walls over the existing marble columns and then added drop ceilings. Bashar’s team didn’t know what was behind the wall until they grabbed sledgehammers and started swinging. Even Bashar took a couple swings at the wall. Once they got through they found the staircase that would eventually lead to the restaurant.

The interior of the future restaurant has been stripped and the drop ceilings have been removed. The marble columns are being replaced, the staircase is being reconditioned, potential operators are being brought in, the marble floors are in, the marble railings for the mezzanine balcony are being fashioned, and the unofficially named (for now) Statler Mezzanine Restaurant is shooting for June of ’08 as a projected opening date. As far as the food goes? I spoke with Bashar about the type of restaurant he wanted in The Statler, and he told me that the only thing he could say for sure was that there would be people traveling from all over and he wanted to have a variety of foods to offer them.


The following article was taken from the WGRZ news website:

Restoring The Statler's Glory

Posted by: Ron Plants, Reporter
Created: 10/20/2007 5:40:29 PM

History fans got a closeup look Saturday at efforts to restore the faded glory of the Statler Hotel in Buffalo's Niagara Square. Developer Bashar Issa, who is based in England, wants to invest $130 Million to refurbish the building with a new hotel operator.

statlerhbuffalo2_from2007.jpg (9272 bytes)

Buffalo real estate consultant George Hamberger, who is now a top official with Issa's BSC development firm, lead tours of the hotel with a focus on three floors of hotel rooms which had been closed for the past 30 to 40 years. They are being gutted and refurbished with various amenities. Hamberger says the goal is provide 250 hotel rooms which will be managed by a soon to be announced hotel operator. Other parts of the building will be renovated for various uses.

The Statler was a world class hotel in the 1920s but fell into disrepair through the years as it was used for office space. Hamberger predicts that the upgrades will draw more visitors attracted by downtown development. They also hope to recapture some of the reception/social event market with a restored lobby and ballrooms.

Issa has also proposed a major new office tower project for downtown Buffalo.


The following article was taken from the Buffalo Rising website:

statlertowers-floor.

Marble 'S' On Display At Statler

Posted by: "queeneyes", Reporter
Posted: 11/28/2007 1:57 PM

If you happen to stop into the Statler for any reason, you can now get a glimpse of the massive handcrafted marble floor tile that is on display. This is the centerpiece that will soon be installed as the flooring focal point within the hotel. The unusual Bespoke marble material used for the floor tile is both sturdy and translucent. It brandishes the mark of the Statler, which currently glows as a bright color wheel spins behind it.

The rest of the Bespoke marble flooring has been made, shipped and is sitting in boxes and workers are preparing to lay the tiles. The work will begin with the sub-first-floor, before getting started on the ground floor where this Statler logo will be placed.

As noted earlier, there will also be a grand water-fountain installed around the tiles on the sub-first-floor.


The following article was taken from the WGRZ news website:

Statler's Owner Is Banking On Wyndham

Posted by: Claudine Ewing, Reporter
Created: 03/31/2008 5:54:48 PM

The owner of the Statler Towers says he's 90% sure that the Wyndham Hotel will occupy a big portion of the downtown Buffalo landmark.

Bashar Issa tells 2 On Your Side that work on the upper floors will come to a halt while the historical tax credit process is completed. He says it is a 90-120 day time frame.

Statler Towers

Kristin Donnelly asks, "Are you concerned at all about what's going on at the Statler?"

Mayor Byron Brown(D-Buffalo) says, "Certainly, I'm concerned about work temporarily stopped, but he's a creative gentleman with big ideas for that property and big ideas in general. Hopefully they will pan out and his projects will move forward."

By phone from London, Issa told two on your side, it's just a temporary delay over historic tax credits.

Bashar Issa, Owner of the Statler Towers, says, "We've decided to put it off for a number of months until we get our site plan approval and our historical tax credit application approved."

Kristin Donnelly asks, "I'm wondering if you've heard anything about the status of those historic tax credits?"

Mayor Brown, "Hasn't talked to me about those directly and I don't specifically know what they are."

The mayor says he met with Issa a month ago. At that time, he told the mayor he's already spent millions and is committed to the project.

Kristin Donnelly asks, "Does the city have any control to make sure these developers keep the promises they make?"

Mayor says, "Not really, as long as they are using their own money and maintain the properties according to the city building codes. Then, after that we have very little recourse."


The following article was taken from the Buffalo News Newspaper:

Issa seeking partners on Statler revival in downtown Buffalo
Erie, Pa.-based firm approached by BSC

By Sharon Linstedt
NEWS BUSINESS REPORTER
Posted: 08/08/08

Cash-strapped British developer Bashar Issa might be taking on U. S. partners to jump-start conversion of Buffalo’s Statler Towers to a mixed use complex featuring a Wyndham Historic hotel.

Issa’s representatives have reached out to Erie, Pa.-based Scott Enterprises, a family-run hospitality company, regarding a partnership with Issa’s BSC Development Buffalo. The deal under discussion would see Scott become the hands-on operator of a proposed 346- room Wyndham hotel.

Scott would oversee extensive renovations at the building, as well as future operation of the planned rooms, suites and related meeting space.

Scott, best known for its Splash Lagoon Indoor Waterpark Resort in Erie, owns and operates several hotels and restaurants in its hometown. The privately- held company is about to enter the Buffalo market with a Staybridge Suites hotel on Sheridan Drive and a Quaker Steak & Lube restaurant on Transit Road, both in Clarence.

Neither Scott representatives nor Issa could be reached to comment Thursday. However, Williamsville businessman Richard Sterben, who is acting as Issa’s liaison with the Wyndham Hotel Group, confirmed talks with Scott.

“If you can bring an experienced operator like Scott to the table, Wyndham would look very favorably on that,” Sterben said.

Issa has been negotiating with Wyndham Hotel Group to locate one of its Historic brand hotels in the 85-year-old building, which began its life as Ellsworth Statler’s flagship hotel. Wyndham currently operates just eight of the unique properties, all of which are located in landmark buildings.

Issa halted Statler renovations in early April citing cash-flow problems. Issa’s money woes have also stopped work on three projects on his home turf in Manchester, England.

Sterben said talks with Scott Enterprises do not involve an investment in the building’s renovation.

Sterben declined to put a timetable on Issa’s Statler efforts, but sources familiar with the situation said key decisions about the fate of project will be made by the end of August.

Issa has told the British press he is negotiating with Gresham Ltd., a London-based lender on a $240 million (U. S.) loan. He has also filed an application with New York State for $20 million in Historic Tax Credits.

While current talks with Scott would see Issa’s firm retain ownership of the 800,000- square-foot Statler complex, sources said there are signs the British developer might be willing to sever his ties with the property.

Issa paid $3.5 million for the property in August 2006. During his ownership, he has updated the building’s main elevators and installed new marble tile in the lobby.

However, progress on a complete overhaul has not progressed beyond demolition of a few floors of the building’s original hotel rooms.

The Buffalo News has also confirmed that Toronto developer and entrepreneur Howard Hurst met with Issa in London last month to discuss how the project might be salvaged. Hurst served as an advisor to Buffalo’s Savarino Cos. in 2005 when it considered acquiring and rehabilitating the Statler.

Hurst declined to comment on any direct role he might play involving the Statler.


The following article was taken from the WKBW TV-7 News website:

New Company acquires Statler

Author Unknown
From WKBW TV-7 News
Posted: 09/18/08

It stands high above downtown Buffalo. The Statler, and it is about to have its third owner in as many years. Developer Bashir Issa had a grand plan to renovate the building into a hotel and living space when he bought it back in 2006, but financial problems changed all that. So with a new plan in the works, some residents are wary.

Statler Towers

"I will believe it when I see it. Maybe I will be ahead of when the peace bridge gets completed," said Buffalo resident Ken Monaco.

But a new group breathes new life into the project. A company known as the Greystone Group is buying the building for under 4 million dollars. They have an investor from Toronto, and are expecting to partner with Scott Enterprises, out of Erie, Pennsylvania. Scott Enterprises has hotels throughout Erie, and they also own the successful Splash Lagoon Waterpark. They are expanding into Buffalo, and are looking at the building for a hotel, with possible offices or retail space.

"There are a lot of things going on in downtown Buffalo and we were trying to be a part of it," said Vice President Chris Scott.

"People see here in Buffalo promises made over buildings like this one. Is this going to turn around?" 7 News asked Scott. "This is why I don't want to promise the people in Buffalo something we can't deliver. That why at this point in time the only thing that is really for sure is is that the building is being acquired, so at this point in time we are not revealing any master plan," said Scott.

Residents anxiously wait to see what happens.

"We have got a local group putting up the funds and making an investment. They have got therefore a vested interest and I think this might be the real deal this time," said resident Calvin LaMar.


The following article was taken from the Buffalo's Business First Newspaper

City can only wait on Statler future

Business First of Buffalo
by James Fink
Posted: Wednesday, March 25, 2009

As the complex legal action concerning the fate of the Statler Towers remains in the hands of a court-appointed receiver, Buffalo officials said they are watching the proceedings carefully.

And for now, that’s all they can do.

“It’s a private party that owns the building,” said Brian Reilly, Buffalo’s economic development chief.

The state of the Statler remains in flux. State Supreme Court Judge John Curran, earlier this month, appointed Buffalo businessman Stephen Leous receiver for the financially-troubled property. Leous is being assisted by attorney Bruce Zeftel, who Curran named special counsel for the Statler.

Both were named as part of a lawsuit initiated by one of the Statler’s anchor tenants, Park Lane Catering, which alleges the landmark building is in such bad shape that they are losing bookings. Park Lane Catering owner William Koessler is still trying to put together an investment group to purchase the Statler from its current owner, BSC Development, a firm headed by British investor Bashar Issa.

Issa bought the Statler three years ago and promised to make more than $100 million in renovations for the 18-story, nearly 600,000-square-foot building. Few of the renovations ever began. Issa is facing myriad legal issues in both Buffalo and Manchester, England. He has not been in Buffalo in more than one year and is facing contempt of court charges that Curran imposed nearly two weeks ago. Issa is due in State Supreme Court on April 6 to answer the charges. Legal insiders do not expect him to make an appearance.

In the meantime, Reilly said he and other City Hall officials are closely monitoring the Statler situation, but their role is limited.

BSC Development, according to court documents, owes Buffalo at least $54,000 in unpaid water bills.

The Statler, which has less than 25 tenants, is losing more than $70,000 per month and has a rent roll of approximately $100,000. At least two tenants, Park Lane Catering and the Erie County Republican Party, are withholding rent payments. The building needs numerous emergency and immediate repairs, with the price tag exceeding $4 million.

A representative of Issa’s, who Reilly said identified herself as his sister, alleges that London-based AAMS Investments Ltd. has either signed or negotiated a lease to occupy 10-stories or 350,000-square-feet of the building. Court proceedings show that AAMS, which was incorporated in mid-February, will only pay $1 a year and has a complicated lease that could last 998 years.

“It’s up to Issa to demonstrate how he can make the Statler work,” Reilly said.

Last fall, a group of local investors attempted to purchase the Statler, offering $3.5 million for the building. The deal never went beyond the negotiation stage.

Reilly said he is willing to talk with any potential buying group — but with certain conditions.

“The buyer has to approach us, but they better do so with the seller in hand,” Reilly said.

Reilly expects any potential buyer to seek public-sector incentives. The economic development czar said he is willing to help convene the necessary and appropriate parties, but only if the deal is legitimate and financing is in place. Public-sector incentives should only be used for gap financing and not the basis for permanent financing.

“You don’t start with the public sector,” Reilly said. “You end with it.”


The following article was taken from the Buffalo's Business First Newspaper

Issues remain as buyer sought for Statler

Business First of Buffalo
by James Fink
Posted: Monday, May 11, 2009

The financial troubles for the historic Statler Towers in downtown Buffalo remain and may get deeper, according to testimony presented Monday afternoon in U.S. Bankruptcy Court.

While negotiations are under way with two utilities that provide essential service to the 18-story Niagara Square landmark, at least one tenant has asked the court for permission to break its lease because of the building’s uncertain fate. That request was made by Erie County Bar Association Aid to Indigent Prisoners Society Inc., which leases nearly 5,000 square feet on the Statler’s sixth floor.

The society, which handles nearly 200 cases per day, has asked U.S. Bankruptcy Court Chief Justice Carl Bucki of the Western Division to allow its lease to be broken without penalty because of the uncertainty facing the Statler. The society’s lease runs through February 2011 and, if it had to pay $80,000 in penalties to break the lease, it would financially cripple the organization.

Bucki reserved decision.

“We are not like a private law firm,” said Buffalo attorney Robert Feldman, who is representing the Bar Association affiliate. “We cannot afford to buy our way out of the lease. We can’t afford to sign a new lease somewhere when we would owe Mr. Horwitz (court appointed trustee Morris Horwitz) $80,000.”

The society’s request was one of several issues Bucki heard presented during the bankruptcy conference.

Bucki placed the Statler’s owner, BSC Development Buffalo LLC, into involuntary Chapter 11 proceedings last month as bills continued to mount for the building, which is losing $80,000 a month. The bankruptcy filing is one of several issues serving as a backdrop for the complex series of legal actions against BSC Development and its owner, British investor Bashar Issa.

The Bar Association society is concerned that if utilities are cut off to the building, it would be placed in serious danger, Feldman argued.

BSC Development Buffalo owes, among others, National Fuel Gas Corp. more than $210,000. The Amherst-based utility has threatened to shut off service but is finishing a temporary agreement with Horwitz that will keep gas service going at the building.

Under an agreement, National Fuel will make weekly readings of gas service and submit the bill to Horwitz, who will pay the bill from rent proceeds. The Statler takes in about $100,000 a month in rents from its few remaining tenants.

“For the time being, they are happy with that,” said Buffalo attorney Julia Kreher, who is working with Horwitz.

A similar agreement with National Grid for electric service is also being negotiated, Kreher added.

Horwitz said he is convinced all of the utilities will remain on and no tenants will have to move because of cut-off service.

The goal is to find a buyer for the Statler, either through traditional sources or a court-mandated auction, by the summer.

“This type of case has to be handled quickly or it runs the risk of never being handled at all,” Bucki warned.


The following article was taken from the Buffalo's Business First Newspaper

Law firm latest to exit Statler

Business First of Buffalo
by James Fink
Posted: Friday, May 29, 2009

The law firm of Hamberger & Weiss has become the latest tenant to leave the financially ailing Statler Towers.

The firm, which leased 14,000 square feet in the Statler, plans to move into approximately the same amount of space in Main Place Tower. It was one of the largest tenants remaining in the Statler.

The Buffalo landmark is at the center of a complex series of lawsuits and legal actions.

The 18-story building, which is owned by BSC Development Buffalo LLC, has been placed into involuntary Chapter 11 protection by the Western District of the U.S. Bankruptcy Court.

BSC Development Buffalo’s managing member, British investor Bashar Issa, is facing legal and financial issues in Buffalo and Manchester, England. He has not been in this area in more than 18 months.

The fate of the building, which overlooks Niagara Square, rests with U.S. Bankruptcy Judge Carl Bucki who is presiding over the case.

Bucki is expected to set a foreclosure auction date in the coming weeks – a move that could lead the way for the Statler to land in some new hands.

Long Island developer Uri Kaufman is considering making a bid for the building and converting the bulk of it into market-rate apartments.

In the meantime, real estate broker Tom Zawadzki is working with a group of out-of-town investors who are considering making a bid for the building, sources said. That group would use most of the building as a hotel, with some residential and commercial space included in the mix.

“I wish there was more interest from the Buffalo real estate community in the building,” said Morris Horwitz, court-appointed trustee for the Statler. “All of the interest seems to be coming from out-of-town parties.”

The Statler has been losing more than $80,000 a month, and those losses are expected to mount as other tenants leave the building.

Issa bought the Statler three years ago and soon announced plans to invest $100 million and return the building to its glory days. Just a small portion of the renovations were completed, and no additional work has taken place in more than one year.

A lawsuit is till pending from Park Lane Catering, another anchor tenant, which alleges that the building’s condition and uncertain future have caused it to lose more than $1 million in potential bookings.


The following article was taken from the Buffalo's Business First Newspaper

No bankruptcy filing for Statler

Business First of Buffalo
by James Fink
Posted: Monday, April 6, 2009  |  Modified: Tuesday, April 7, 2009

The utilities at the Statler Towers remain on at least temporarily, the impending involuntary Chapter 11 bankruptcy has been staved off and the building’s owner has two more contempt of court citations filed against him.

Other than that, it was been an ordinary day in the complex saga involving the Buffalo landmark.

In a series of actions Monday afternoon before State Supreme Court Judge John Curran, the court appointed receivers of the Statler agreed to pay National Fuel Gas Corp. $10,000 to keep the gas on at least through April 14. National Fuel Gas is owed more than $210,000 and had threatened to shut off service to the building until Curran intervened late on Friday.

Curran, also held British investor Bashar Issa, whose firm BSC Development Buffalo LLC owns the Statler, on two more contempt of court citations for failing to produce evidence of a mysterious 99-year lease he signed with a London firm and with the failure of Issa to turn over an $81,000 check he received from New York’s Enterprise Zone tax credit program. The funds were supposed to go to the court-appointed receivers to help the Statler address its mounting debts.

Issa is being fined $250 per day, the maximum allowed by law, on each contempt of court charge.

In addition, Curran said he learned the state withheld $27,000 in rent payments made by the Worker’s Compensation Board for sales taxes Issa failed to pay when he sold a $500,000 luxury boat last summer.

Issa has not been in Buffalo in more than one year. He says he has visa problems that prevent him from entering the country.

An involuntary Chapter 11 proceeding under the U.S. Bankruptcy Code against Issa and BSC Development Buffalo remains in the immediate background, but no filings have been made as of Monday afternoon. The bankruptcy proceeding is being considered by Park Lane Catering, one of the building’s anchor tenants, who started legal action against Issa and BSC Development in December.

Meanwhile negotiations between Park Lane Catering and Issa, along with Issa’s father Mohmouud Al Issa, who holds the mortgage, continue to inch forward. Park Lane wants to buy the former hotel.

“The Park Lane is still hopeful,” said David Pfalzgraf Jr., Park Lane Catering’s attorney.

Pfalzgraf said all events the Park Lane has booked at the Statler will go forward. The Park Lane has booked more than 200 events in the building, but has lost more than $1 million in bookings because of the building’s uncertain future.

“All of the events will continue,” Pfalzgraf said.

Issa bought the 18-story Delaware Avenue building three years ago and had promised more than $100 million in renovations. Few, if any, ever materialized.

The building is losing nearly $80,000 a month, according to court documents, and has seen its tenant base dwindle to 25 tenants.

Issa is also facing financial problems in Manchester, England.


The following article was taken from the Buffalo's Business First Newspaper

Statler poised for bankruptcy action

Business First of Buffalo
by James Fink
Posted: Monday, April 13, 2009

In a move that has been anticipated for the past few weeks, the Statler Towers, late Monday afternoon, was in the process of being placed in involuntary Chapter 11 bankruptcy protection.

The filing was made at the urging of Park Lane Catering, one of the downtown landmark’s anchor tenants. and is the latest legal twist in the complex case that could determine the fate of one of Buffalo’s most fabled corporate addresses.

Park Lane Catering began legal proceedings against the Statler’s owner, BSC Development Buffalo LLC, in late December after alleging it has lost more than $1 million in bookings because of the building’s poor physical condition and uncertain future.

British investor Bashar Issa, who heads BSC Development, bought the 18-story Delaware Avenue building that overlooks Niagara Square three years ago and pledged to spend more than $100 million renovating the Statler and restoring it back to its past glory. Issa began some of the work, but renovations have all but stopped for the past year as Issa is facing financial and legal troubles both in Buffalo and in Manchester, England.

The involuntary Chapter 11 proceeding, under the U.S. Bankruptcy Code, provides a stay for most of the Statler’s creditors. Utilities have 20 days to negotiate with a court-appointed receiver on a payment schedule. As of Monday afternoon, no receiver had been appointed.

If no willing receiver can be found, Park Lane Catering may be forced to petition the bankruptcy court to change the involuntary Chapter 11 filing into a more restrictive involuntary Chapter 7 filing.

“There is, now, an automatic stay in place and the creditors must await the outcome,” said Garry Graber, a partner with Hodgson Russ and a bankruptcy specialist retained by Park Lane Catering.

Still, even with the filing, the Statler remains owned by BSC Development Buffalo. Issa’s father, Mohmoud al Issa, continues to hold the $4.5 million mortgage he took out on the building last May.

However, in late February, State Supreme Court Justice John Curran named Buffalo businessman Stephen Leous received and attorney Bruce Zeftel, special counsel. It is unclear if Leous will be retained as receiver by the bankruptcy court.

National Fuel Gas Corp., which is owed more than $210,000, wanted to shut off the gas to the Statler 10 days ago, but Curran intervened and worked out a temporary settlement where the utility would receive $10,000 and agree to keep the gas on through Tuesday. The filing would stave off that action for another 20 days.

“All of the tenants have a lot at stake,” Graber said.

Many feel a bankruptcy-court appointed receiver might be able to break the logjam between potential buyers of the building and the elder Issa and his son.

The Statler, with just 25 tenants left, has been losing as much as $80,000 per month for more than one year. National Fuel representatives, in court proceedings, said it costs the utility $2,000 per day to provide gas service to the building.

In a hearing before Curran last week, it was revealed that the Statler had about $24,000 left in its bank account.

William Koessler, Park Lane Catering president and founder, said despite the rampant speculation about the Statler’s future, he still has about 200 active bookings for his operations in the Golden Ballroom and Rendez-Vous room.

David Pfalzgraf Jr., Park Lane’s attorney, stressed all booked events for the Statler will go on as planned.

Koessler is working with a group of Chicago-based investors who want to purchase the building and make $70 million worth of renovations.

“The goal is to get the building sold by the middle of the summer,” Graber said.


The following article was taken from the Buffalo's Business First Newspaper

Next round for Statler in bankruptcy court

Business First of Buffalo
by James Fink
Posted: Tuesday, April 14, 2009

With the Statler Towers placed under involuntary Chapter 11 protection, the first court hearing connected with the high-profile case has been scheduled.

Lawyers representing Park Lane Catering, which filed the involuntary Chapter 11 protection petition against BSC Development Buffalo LLC — the Statler’s owners, and those representing BSC Development and National Fuel Gas Corp. are expected in a federal courtroom.

The case will go before Justice Carl Bucki, the Western District of New York division of the U.S. Bankruptcy Court’s chief judge.

National Fuel is seeking a $115,810 post-bankruptcy security deposit payment from BSC Development to cover two months of operating costs for the cash-starved Statler. National Fuel is already owed more than $210,000 in pre-bankruptcy debts from BSC Development for overdue payments to the Amherst-based energy company. National Fuel, in recent weeks, has threatened to shut off service to the building unless payments were made.

“Our action is designed to protect the customer and the company,” said Julie Coppola Cox, National Fuel Gas spokesperson. “The fact of the matter is that while the Statler was forced into bankruptcy, it does not change the fact that we can not dismiss our responsibility to the more than 500,000 customers in Western New York we serve. Uncollected bills are factored into the rates we all pay.”

The involuntary bankruptcy petition, which had been anticipated for the past few weeks, triggered National Fuel’s action before Bucki. It’s action was also expected.

The bankruptcy filing came after another round of failed negotiations between Park Lane Catering — one of the Statler’s remaining anchor tenants — and BSC Development, a company headed by British investor Bashar Issa, who acquired the Delaware Avenue landmark three years ago.

David Pfalzgraf Jr., Park Lane Catering’s attorney and a partner in the Buffalo law firm of Rupp Baase Pfalzgraf Cunningham & Coppola LLC, said the Chapter 11 petition serves a multitude of legal and practical purposes, including putting the 18-story building into the hands of a court-appointed receiver and offers more assurances the Statler will remain open.

Pfalzgraf said he hopes Bucki names Buffalo businessman Stephen Leous receiver. Leous was named receiver by State Supreme Court Justice John Curran as part of a separate lawsuit filed against BSC Development by Park Lane Catering. The bankruptcy filing takes legal precedence over the lawsuit Park Lane Catering filed in December.

Leous could not be reached for comment.

“The filing was also made to ensure that the utility service remain on for the foreseeable future,” Pfalzgraf said.

Coppola Cox said National Fuel felt it had to bring its own action to the bankruptcy court given the Statler’s unstable finances. The building is losing nearly $80,000 per month, according to court testimony. It has approximately 25 tenants and has not signed a new tenant in more than 18 months while seeing several leave and others withhold monthly rental payments.

“We are acting in a watchful manner and with vigilance when we’ve already seen considerable debt accumulated,” Coppola Cox said. “Not to do so, would be unfair to all our customers who work hard to pay their bills, even in difficult circumstances.”

Pfalzgraf called the bankruptcy filing a “positive development” for the building and its tenants.

“It will ensure that Park Lane Catering remains open for business in the near and long-term future and will ultimately be sold to a third party through the bankruptcy court process,” Pfalzgraf said.

Park Lane Catering has more than 200 events booked in the Statler’s Golden Ballroom or Rendez-Vous rooms in the next few years. It has, however, lost more than $1 million in bookings because of the building’s uncertain future, company officials say.

William Koessler, Park Lane Catering owner, is working with a group of Chicago-based investors who want to purchase the building and have pledged to make more than $70 million in renovations to the building.

Both Koessler and Pfalzgraf stressed all booked events at the Statler will take place, as planned. Customers need not worry, both said.

Issa pledged to spend more than $100 million renovating the Statler and restoring it back to its past glory. Issa began some of the work, but renovations have all but stopped for the past year as Issa is facing financial and legal troubles both in Buffalo and in Manchester, England.

The involuntary Chapter 11 proceeding, under the U.S. Bankruptcy Code, provides a stay for most of the Statler’s creditors. Utilities have 20 days to negotiate with a court-appointed receiver on a payment schedule. If no willing receiver can be found, Park Lane Catering may be forced to petition the bankruptcy court to change the involuntary Chapter 11 filing into a more restrictive involuntary Chapter 7 filing.

The Chapter 11 filing is being handled for Park Lane Catering by Garry Graber, a partner with the Buffalo law firm of Hodgson Russ.

Even with the filing, the Statler remains owned by BSC Development Buffalo and Issa’s father, Mohmoud al Issa, continues to hold the $4.5 million mortgage he took out on the building last May.

Many feel a bankruptcy-court appointed receiver might be able to break the logjam between potential buyers of the building and the elder Issa and his son.

“The tenants of the Statler as well as all of the individuals who have events scheduled with the Park Lane can breathe easier in knowing that the building will remain open and fully operational for the time being,” Pfalzgraf said.


The following article was taken from the Buffalo's Business First Newspaper

Both sides gain a bit in Statler case

Business First of Buffalo
by James Fink
Posted: Thursday, April 16, 2009

A bankruptcy judge ruled late Thursday afternoon that gas service at the Statler Towers must stay on - at least for a few more weeks - and that National Fuel Gas Co. is entitled to payment for current service.

The decision was viewed as a partial victory for both National Fuel Gas Corp. and the tenants of the financially-troubled downtown Buffalo landmark.

U.S. Bankruptcy Court Western District Chief Judge Carl Bucki made his rulings following more than three hours of testimony, including impassioned pleas from the Statler’s tenants. The hearing was the first since Park Lane Catering LLC, one of the building’s anchor tenants, forced the Statler’s owner, BSC Development Buffalo LLC into involuntary Chapter 11 proceedings earlier this week.

Bucki was hearing motions brought National Fuel Gas, which is seeking both payments for past and current services. The Amherst-based energy company is owed $208,659 in gross pre-bankruptcy debts by BSC Development.

National Fuel had initially sought $115,000 in post-bankruptcy payments, but during the court session said it was willing to accept $5,000 per week in payments.

In one of his rulings, Bucki determined that National Fuel can read the building’s meters on April 24 and then must receive payment for those services by May 4. If no payment is made, then National Fuel may proceed with shutting down service to the Statler.

At the same time, Bucki has agreed that a trustee should be appointed to oversee the Statler and that trustee, along with others connected with the complex case, meet in his courtroom on April 23. Bucki is then expected to rule on whether the involuntary bankruptcy proceeding can continue.

The 18-story, 550,000-square-foot Statler has just 25 tenants and is losing nearly $80,000 a month. The building is owned by British investor Bashar Issa, who has not been in Buffalo in more than one year. Issa is facing financial and legal issues in Manchester, England.

“We are dealing with a debtor who chooses not to appear or be present,” Bucki said.

Earlier this month, State Supreme Court Justice John Curran, who is hearing another case involving Park Lane Catering and Issa, has twice held the investor in contempt of court. Issa is facing daily fines of $250 on each charge.

Park Lane Catering owner William Koessler is working with a team of Chicago-based investors who want to buy the Statler and begin a $70 million restoration effort. The Park Lane has more than 200 events booked in the Statler, ranging from weddings to corporate affairs. The Park Lane has lost more than $1 million in bookings because of the Statler’s shoddy shape.

Issa had pledged to make more than $100 million in renovations when he bought the Statler three years ago. Only a limited number of those took place and no renovation work has occurred since last spring.

William Brown, a partner in the Phillips Lytle LLC law firm and National Fuel Gas’ legal representative in the case, urged Bucki to help bring a resolution to the case.

“It is in the best interest of National Fuel and all parties to resolve this,” Brown said.

“We continue to work hard on behalf of our customers to assure that we receive payment for services received at the Statler,” added Julie Coppola Cox, National Fuel Gas spokesperson.

Bucki did order that either BSC Development or the court-appointed trustee make weekly payments to National Fuel beginning May 4. The payments will come from rents collected by the trustee.

“Regular on-going payments are to be paid,” Bucki said.

The judge, reiterating what others have said, fears a prolonged period of uncertainty will only continue to harm the Statler. The building needs nearly $5 million in immediate repairs, including facade work.

Julia Kreher, an attorney from Hodgson Russ, who is working with Park Lane Catering on BSC’s involuntary Statler bankruptcy proceeding, said her client is “sympathetic towards National Fuel.”

Kreher said the trustee is needed, if not essential.

Curran, in March named Buffalo businessman Stephen Leous, interim receiver in connection with the Park Lane lawsuit. Leous has been named as a possible trustee for the building’s bankruptcy proceedings. Leous was out of town and unavailable for comment.

Any trustee must be vetted by federal officials.

“A Chapter 11 trustee is needed to step in and stabilize the situation,” Kreher said.

Kreher said the involuntary Chapter 11 proceedings may make it easier to sell the Statler.

Koessler has repeatedly said he and his investors remain frustrated by the inability to strike a purchase deal with either Issa, or his father, Mohmaud al Issa, who holds the mortgage on the Statler.

“What you got is nobody willing to deal and no one willing to step up to the plate,” noted Buffalo attorney Bruce Zeftel, who Curran named special counsel to the Park Lane proceedings.


The following article was taken from the Buffalo's Business First Newspaper

Bankruptcy trustee in place at Statler

Business First of Buffalo
by James Fink
Posted: Thursday, April 23, 2009

Buffalo bankruptcy attorney Morris Horwitz was named trustee for the financially-ailing Statler Towers, in the latest legal move concerning the downtown Buffalo landmark.

Horwitz’s appointment, which had been anticipated, came despite a last-ditch effort by the Statler’s owner, BSC Development Buff LLC and its managing member, British investor Bashar Issa, to delay the involuntary Chapter 11 proceedings in U.S. Bankruptcy Court. The relatively rare involuntary Chapter 11 proceedings were brought against BSC Development Buff LLC by four Statler tenants, including Park Lane Catering.

The legal action is being sought to remove Issa and BSC Development as the Statler’s owner and to find a new owner for the 18-story, 80-year-old building that overlooks Niagara Square.

“Our intention is to keep the building open and to continue to provide services for tenants,” Horwitz said.

At the same, Horwitz said he will review all options concerning the Statler’s future including finding a new buyer, either through negotiations or a court-sanctioned auction.

“We must find the most appropriate way to restructure,” he said. “Part of that is to find a willing and able buyer.”

U.S. Bankruptcy Judge Carl Bucki, Western District of New York chief bankruptcy judge, appointed Horwitz. Bucki heard motions on the case last week and determined that a trustee had to be in place by Thursday.

“There is a need for prompt action,” Bucki said. “A trustee is the best opportunity for prompt action. There is a risk to harm to innocent tenants. There is a risk of harm to innocent sub-tenants. The merits of the issue need prompt consideration.”

The Statler, which has seen its tenant roll drop in recent years, is losing $80,000 while earning, at most, $100,000 in monthly revenues. Many of the tenants were withholding rent payments over frustration with little progress made in terms of renovating the building or keeping basic services in operation.

Issa, who bought the Statler in 2006, had promised a $100 million top-to-bottom makeover of the building including bringing a 150-room hotel to the complex as well as renovating office space and converting its upper floors into upscale condominiums. Only a small scale of the renovations were completed and virtually no work has been done in the Statler, in terms of repairs, for more than one year.

Issa is also facing legal and financial issues in Manchester, England.

In two motions expressed to Bucki just a few minutes before Thursday morning’s proceedings were to begin, Issa asked the involuntary bankruptcy action be set aside. Issa disputed several facts in previous court sessions including allegations that Park Lane Catering was acting in bad faith.

Bucki dismissed Issa’s claims and allegations.

“The legitimacy of the papers is open to question,” Bucki said. “The papers that were submitted (by Issa) do not comply with the rules of the court.”

Bucki heard testimony that the four tenants who brought the involuntary bankruptcy action to court are owed approximately $33,000. Park Lane Catering, earlier this month filed a mechanic’s lien against BSC Development claiming it is owed $16,700 for emergency repairs it had to make near the Statler’s Franklin and Genesee streets entrance.

Park Lane Catering, last fall, began a lawsuit in State Supreme Court against BSC Development because it has lost more than $1 million in bookings due to the raw state of the building and portions of its lobby. Park Lane Catering runs special events, ranging from weddings to corporate functions, in several areas of the Statler. Park Lane Catering has more than 200 future events booked at the Statler.

All of the events will go on as scheduled.

William Koessler, Park Lane Catering owner, is working with Chicago-based interests who want to buy the Statler and have pledged to make at least $70 million in renovations to the building. Issa has rebuffed Koessler’s offers.

The involuntary bankruptcy proceedings began earlier this month as the Statler was faced with the prospect of National Fuel Gas Corp. shutting off service to the building. National Fuel is owed more than $210,000 in unpaid bills from BSC Development Buffalo. The bills pre-date the bankruptcy filing.

Other utilities are also owed monies well into the six-figure range, including National Grid and the City of Buffalo’s Water Department.

In an April 16 ruling, Bucki ordered National Fuel to conduct an April 24 meter reading and submit a bill to the trustee by April 27. The bill must be paid by May 4 or National Fuel may exercise its right to shut off service to the Statler.

Bucki said he is concerned about what the long-term impact may be not only to the Statler, but its tenants.

During the April 16 hearing, Bucki heard from several tenants who expressed various levels of concern about the building’s future and what would happen if they were forced to leave the Statler with little notice.

Horwitz said he will be meeting with the tenants and other interested parties in the coming days. From those meetings, he will determine the appropriate course of action.

“I need to determine what’s best for the tenants and the property,” Horwitz said.

Horwitz said he will collect all the rent that’s due to help pay for the utilities, Statler’s handful of employees and insurance costs.

“That’s the key to keeping the building open and functioning,” he said.


The following article was taken from the Buffalo's Business First Newspaper

Issa's money woes mount overseas

Business First of Buffalo
by James Fink
Posted:  Tuesday, May 5, 2009

The financial troubles for British investor Bashar Issa continue on both sides of the Atlantic Ocean.

Reports from England say that creditors forced Issa into bankruptcy, according to a court order issued in Manchester (England) County Court. No debts or liabilities were listed in court documents,

Issa’s bankruptcy, forced by creditors, stems from problems connected with three development projects he undertook in Manchester. Three Issa-controlled development companies that oversaw the projects — BS Construction, BS Developments and Issa Developments — were forced into administration, a British form of bankruptcy protection, last year by creditors.

Last month, Issa’s Buffalo-based company, BSC Development Buffalo LLC, which owns the historic Statler Towers along Niagara Square was forced into involuntary Chapter 11 protection. The Statler may be sold through an expedited auction later this summer.

The involuntary Chapter 11 protection was part of a complex series of legal actions being brought against Issa and his BSC Development Buffalo by one of the Statler’s anchor tenants, Park Lane Catering, which alleges that Issa failed to complete his proposed $100 million renovation of the historic downtown Buffalo landmark and as a result, Park Lane Catering has lost more than $1 million in bookings and the Statler’s tenant roster continues to dwindle.

Issa, despite being ordered to appear in State Supreme Court, has not been in Buffalo for more than one year, allegedly because of visa problems. He is being fined on contempt of court charges $250 per day by State Supreme Court Justice John Curran.

Issa is also facing myriad legal issues in England.


The following article was taken from the Buffalo's Business First Newspaper

Prospective Statler buyer has lofty plans

Business First of Buffalo
by James Fink
Posted: Friday, May 15, 2009

A Long Island developer with a reputation for turning around troubled historic properties has emerged as a likely bidder for the Statler Towers.

Uri Kaufman, who spent two days in Buffalo this week touring the Statler and meeting with local officials, said he is interested.

“I’d say it’s better than 50/50 at this point we will make a bid,” Kaufman said. “It’s a trophy property and in a location where people want to be.”

The owner of the downtown Buffalo landmark, BSC Development Buffalo LLC, was placed in involuntary Chapter 11 bankruptcy last month. The 18-story building likely will be put up for bid later this summer under an order from the U.S. Bankruptcy Court’s Western Division. The case is being heard before federal bankruptcy Justice Carl Bucki, who heads the Western Division. Bucki would have to set an auction date, but the judge has said it is too early to do that.

Kaufman said there are many legal and logistical hurdles to be addressed before he commits to making a bid. Chief among them: addressing parking concerns and guarantees that a pool of local, state and federal incentives are available to make the project financially viable.

Brian Reilly, Buffalo’s economic development chief who met with Kaufman May 12, said he “sketched out what we could do.”

“It was pretty generic in terms of incentives and programs,” Reilly said. “We want something to happen at the Statler because it is such an important building and site. Once we get a specific proposal from a specific developer, we will put the appropriate incentive package together. We want this to happen, but the developer has to contact us, officially, first.”

If Kaufman does acquire the Statler, he plans on converting the bulk of the nearly 600,000-square-foot building into upscale, market-rate lofts. He estimated he could convert the 88-year-old, former flagship hotel into 450 to 500 lofts, in three phases and over a period of time.

The Statler’s anchor tenant, Park Lane Catering, would continue its operations in the building. Company owner William Koessler may be an equity partner in Kaufman’s Statler development team.

In December, Park Lane Catering began legal action against BSC Development Buffalo LLC and its principal, British investor Bashar Issa, that ultimately led to the involuntary Chapter 11 bankruptcy protection order. The Statler is being overseen by a court-appointed trustee, local attorney Morris Horwitz.

The Statler, according to court testimony, is losing $80,000 a month while generating $100,000 in rent from its 25 remaining tenants.

Park Lane Catering has more than 200 events booked in one of its operations in the Statler and remains a viable tenant.

“The project has a lot of difficult challenges,” Kaufman said. “But we’ve taken on challenges before and they worked out. In this case, we need about a dozen things to come together to make it work.”

Among his vast real estate portfolio, Kaufman converted the former Harmony Mills complex in Cohoes, near Albany, to a market-rate apartment complex that is nearly full. The historic warehouse has 96 apartments in its first phase and Kaufman is working on bringing another 141 units to the building, once he secures mortgage insurance from the U.S. Department of Housing and Urban Development.

Kaufman has other projects in the Albany-area economic development pipeline, including converting a long-vacant textile mill in Amsterdam to a 200-apartment complex.

“Harmony Mills was actually in worse shape than the Statler,” Kaufman said. “It was dead in the water, and we made it work. When we started that deal, people thought we were out of our minds. And now it has a 3.5 percent vacancy rate in Cohoes. That’s a New York (City) number.”

Kaufman said the Statler “lays out reasonably well” for his proposed plans.

The building will be driven by its residential component. No hotel plans are being considered.

“Having the Park Lane is a big plus,” Kaufman said.

Besides Park Lane Catering, he might be willing to work with existing office tenants that want to stay.

“It’s a very fluid situation,” Kaufman said. “In Buffalo, you just can’t put 500 apartments on the market at once and think just because you built it, people will come. This is going to have to be phased.”

Eric Tudor, Coldwell Banker Commercial Meridian co-owner who is working with Kaufman, said he is “cautiously optimistic” that the deal will happen.

He started working with Kaufman through Coldwell Banker’s Cohoes office. Kaufman was originally interested in the former AM&A’s flagship store on Main Street.

Issa bought the Statler three years ago. He proposed building a 40-story tower at the corner of West Mohawk Street and Elmwood Avenue.

Last summer, Issa sold the surface parking lot where the tower was proposed for $2.5 million. “The biggest challenge (for the Statler) is parking because there isn’t any,” Kaufman said.


The following article was taken from the Buffalo's Business First Newspaper

Judge sets Statler auction

Business First of Buffalo
by James Fink
Posted: Wednesday, June 3, 2009

A federal bankruptcy judge, as expected, set a July auction date for potential bidders for the financially ailing Statler Towers.

U.S. Bankruptcy Judge Carl Bucki, chief of the Western District of New York, ordered bids for the downtown Buffalo landmark be submitted by July 9, with an auction to be held on July 14 – but only if two or more bids are submitted. Bucki will consider the bids and auction results during a July 21 sale hearing and status report.

The auction could seal the fate of the Statler and ultimately remove BSC Development Buffalo LLC and its principal, British investor Bashar Issa, from owning the building. Issa is facing legal and financial issues both in Buffalo and Manchester, England.

Bucki said he expects the transaction to be completed by the end of July.

The auction was disputed in a last minute filing made late Wednesday morning by attorneys representing Issa’s father, Mohmoud Al Issa, who holds a $4.5 million mortgage on the property.

Mohmoud Al Issa, a Jordan resident and businessman, was not present.

“We don’t disagree that the property needs to be sold, but not done so in such a hurry up manor,” argued Mohmoud Al Issa’s attorney, Raymond Fink, a partner in Harter Secrest & Emery. “The question is whether this is the best way to do it. This is a hurry up and a ‘Hail Mary.’ “

Fink alleged that the elder Issa has invested more than $12 million in Statler-related expenses during the past three years.

“My client has more at stake in this venture than any other creditor,” Fink said.

But, with debts mounting and its tenant roll dwindling and revenue sources shrinking, attorneys representing the court-appointed trustee, said the sale is necessary to stabilize the Statler.

“It wasn’t the trustee who failed to adequately capitalize this building,” said Garry Graber, a partner with Hodgson Russ.

Graber said when Bashar Issa bought the Statler three years ago, the nearly 600,000-square-foot building was more than 50 percent occupied. Today, it has less than a 20 percent occupancy rate and lost an anchor tenant, the law firm of Hamberger & Weiss, who left for Main Place Tower because of the building’s uncertain ownership and future.

The Statler, according to previous court testimony, is losing more than $80,000 a month.

BSC Development Buffalo LLC has mounting debts including owing the City of Buffalo and Erie County more than $200,000 in unpaid property taxes with another $200,000 due on June 30.

Graber said to hire a professional auctioneer to market the Statler would cost $45,000 – money the Statler does not have in its bank account.

“We don’t disagree that this is a ‘Hail Mary’,” Graber said. “That’s exactly what it is. This is about economics, not anything else. Bashar Issa can’t finance the building and his father doesn’t want to.”

Several groups have expressed an interest in the Statler including Long Island developer Uri Kaufman, who is considering making a bid and converting the bulk of the building into apartments. The building’s anchor tenant, Park Lane Catering, would remain and continue with its business operations. The Park Lane has more than 200 events booked in the Statler in the coming months and years. It remains in full operation.

However, Wednesday morning, it also filed a $1.29 million claim against BSC Development Buffalo LLC.

“The Park Lane is one of the last tenants left standing,” said David Pfalzgraf Jr., the Park Lane’s attorney. “They are very concerned, every day, about the utilities.”

The auction is the latest in a long series of legal proceedings against BSC Development Buffalo LLC and against Issa, both in Buffalo and Manchester.

The Buffalo proceedings began last November by Park Lane Catering, which alleges it lost more than $1 million in bookings because of the building’s physical shape and uncertain future.

Issa had pledged to invest more than $100 million in the Statler and returning it to its showplace status by bringing in a 150-room hotel and converting the upper floors into upscale condominiums. Issa had also announced plans to construct a 40-story tower at the corner of West Mohawk Street and South Elmwood Avenue.

Only a minimal portion of the renovations ever took place. No work has taken place in the Statler since April 2008.

The tower property was sold last summer for $2.5 million.

Issa has not been in Buffalo in more than 18 months allegedly because of visa problems. This winter he was found in contempt of court by State Supreme Court Justice John Curran in relation to the Park Lane Catering litigation.

Creditors, including the Park Lane, petitioned federal courts to place the Statler into involuntary Chapter 11 protection. Bucki agreed and placed the Chapter 11 protection on the building on April 13.

New York City attorney Joseph Leon, who represents Bashar Issa, said his client is “being portrayed as a bad actor of some sort.”

Leon said Issa invested $8 million in renovations to the Statler.

“I walked through there and expected to see exposed dry wall and hanging wires, but I didn’t,” Leon said. “My client was sabotaged by the economy. When you peel back all the allegations, what you have is an economically challenged owner.”

Following Bucki’s ruling - which came after a 2.5 hour-long hearing - the judge said he made his decision “based solely on the facts.”

“The trustee’s concerns are legitimate,” Bucki said.

Fink said he was not surprised but disappointed by the ruling.

Both Pfalzgraf and Graber, however, applauded the decision.

“We think this was the right outcome,” Graber said.


The following article was taken from the Buffalo News Newspaper:

Statler Towers
Bids for the Statler Towers are to be submitted
by July 9, with an auction planned July 14.
Photo: Bill Wippert/Buffalo News
Bankruptcy judge approves auction of Statler Towers

Solicitations of bids,sale to occur in July

By Matt Glynn - mglynn@buffnews.com
NEWS BUSINESS REPORTER
Posted: Thursday, June 4, 2009

A U. S. Bankruptcy Court judge has cleared the way for the Statler Towers to be sold by the end of July.

Judge Carl L. Bucki on Wednesday approved a request made by attorneys for bankruptcy court trustee Morris Horwitz to conduct a sale. The company that operates the downtown landmark was forced into Chapter 11 bankruptcy in April over the objections of developer Bashar Issa.

The timeline presented in court calls for bids for the property to be submitted by July 9. If two or more qualified bids are received, an auction will be held on July 14. A court hearing on the sale is set for July 21, with the closing expected on July 31.

“I would expect the sale would be completed by the end of July,” Bucki said.

The trustee’s attorneys had sought the quick action to line up a new buyer for a property beset by mounting bills and a dwindling tenant base.

“We’re pleased at the outcome,” said Garry Graber, an attorney representing the trustee. “It will help to avoid a blight on the city of Buffalo.”

Ray Fink, an attorney representing Mohmoud al Issa, the father of Bashar Issa, unsuccessfully sought to delay the sale process beyond July by perhaps a couple of months. Mohmoud al Issa claims he holds a $4.5 million mortgage on the property, while Graber challenged the validity of that mortgage.

Fink said he agreed the property needed to be sold, but he did not want the process carried out in what he called a “hurried-up, fire-sale” manner.

Bucki, acknowledging the unresolved dispute over the mortgage, approved Graber’s request that Mohmoud al Issa not be allowed to make a credit bid for the Statler when it goes up for sale. Attorneys for the trustee said allowing the credit bid would have a “chilling effect” on other bidders for the Statler, since others would have to compete using cash.

After the hearing, Fink said that he did not know if he would contest the judge’s rulings, saying he had to talk to his client. Fink contended the credit bid should have been permitted to be entered to ensure the property is not sold “for some ridiculously low price.”

Joseph Leon, a New York City attorney representing Bashar Issa, sought to counter what he said were unfair negative impressions about his client and his handling of the Statler project. Leon told Bucki about walking into the Statler for the first time. “I was very impressed. I was expecting to see wires and drywall everywhere, and I haven’t seen any of that,” he said.

It was Leon’s first appearance in court on behalf of Bashar Issa.

Horwitz said the sale will be advertised locally and in some national publications.

“We’re going to get the attention of significant real estate investors,” he said.


The following article was taken from the Buffalo's Business First Newspaper

Statler recalls long-ago memories

Business First of Buffalo
by Dick Hirsch
Posted: Friday, July 31, 2009

I stood at the railing on the mezzanine, looking and listening to the lobby below, hoping to discern some echoes from the past.

Once a center of activity each noon, it was virtually deserted the other day as lunchtime approached. Standing more than a floor above, at eye level with those giant crystal chandeliers, I could even overhear the conversation of two women hurrying toward the Delaware Avenue entrance.

“So I don’t know why they waited so long for us to move,” one said. “We know where we’re going but we won’t be leaving for at least a month.”

“Too bad,” said the other. “I remember this place when I was young.”

Many people remember the Statler when the hotel was the place to be, a solid presence anchoring Niagara Square, a monument to the business foresight of E.M. Statler and the stage upon which civic and social occasions of every kind were celebrated. Now somewhat forlorn with vacant rooms and shabby carpeting, it has retained its basic character and continues to be alluring. All the building requires is a visionary with deep pockets.

It is being offered to the highest bidder at auction on Aug. 12. Will there be bidders? What will its future be?

It is amazing that I could be standing above and looking below at 11:50 a.m. on a weekday morning and eavesdrop on a conversation in the lobby. In its heyday, there was an almost constant hubbub. The lobby was filled with traffic; there were lines at the busy registration desk and the seven elevators were in constant motion, carrying passengers to and from the 18 floors above. A person could stand in that lobby at busy periods and be virtually assured of meeting friends or acquaintances, some walking through the lobby from Delaware to Franklin, others intent on stopping at one of the Statler’s attractions.

In addition to the Terrace Room which was the main dining room, a person interested in food or drink could choose the Cafe Rouge, an elegant space that was a bistro before that description came into commonplace usage. It had a light but diversified menu, and it served from breakfast through late night.

Just across the lobby was the lounge, a stylish setting with soft lights, tables for privacy, comfortable stools at the bar and a cadre of attentive bartenders who seemed interested in their work and proud of their neatly pressed Statler uniforms. If neither the cafe nor the lounge seemed exactly suitable, just a corridor away was the Statler drugstore. It was stocked with all the usual medications and sundries, but perhaps was most famous for its soda fountain, behind which short-order specialists worked to prepare what many believed was the best tuna salad sandwich within miles.

The Statler was the area’s most popular site for meetings. Organizations of every kind – civic, political, social, religious – would hold their annual banquets and other affairs there. The largest would convene in the Statler Ballroom and smaller groups in one of the private meeting rooms on the mezzanine. The groups would range from Catholic Charities to the Republican County Committee, from the Bailey-Delavan Businessmen’s Association to the Civil War Roundtable. Newspaper editors often assigned reporters to attend some of the meetings in hopes of finding a story. Sometimes there were stories.

One of those stories developed when a well-known community leader asked me to look for him in the Statler lobby, often a convenient meeting place. He escorted me to the 12th floor where, in the State Suite, he introduced me to President Harry Truman, retired and in Buffalo for a speaking engagement that evening sponsored by Canisius College. We had an amiable talk. President Truman was among many distinguished Statler overnight guests.

E.M. Statler began his business career in Buffalo in 1896 with a restaurant in the Ellicott Square Building. He built the first Statler Hotel at Washington and Swan in 1907 and built the present Statler, with its 1,000 rooms, in 1923. Before he died in 1928, he owned hotels in Cleveland, Detroit, St. Louis, New York, Boston and Pittsburgh. The chain continued to grow after his death and was sold to Hilton in 1952 for $111 million.

The Statler hosted many wedding receptions, including my own. I can still remember that formation of waiters in their short, crimson jackets marching into the darkened Terrace Room, each holding aloft a plate of Baked Alaska, the flaming dessert.

Yes, I did detect some echoes from the past ... but nothing about the future ... .


The following article was taken from the Buffalo's Business First Newspaper

Statler bidders face pricey task

Business First of Buffalo
by James Fink
Posted: Friday, August 7, 2009

The answer to one of the regions most-asked real estate questions should be answered soon.

That’s when the historic but financially ailing Statler Towers in Buffalo goes to a U.S. Bankruptcy Court-imposed auction. It’s set for 11 a.m., Aug. 12 in the lobby of the Delaware Avenue landmark.

But while the Statler ownership question may be answered, there will be those who may not like what they hear.

Pre-auction publicity has attracted a lot of attention with inquiries from Japan, England, Ireland, New York City, Atlanta and Toronto. But whether those inquiries translate into true bidders won’t be known until just minutes before the auction. All serious bidders must present a certified deposit of $100,000, according to Cash Cunningham, founder of Cash Realty & Auctions. He is running the auction.

“There are a lot of well-intentioned, sophisticated investors out there doing all sorts and different levels of due diligence,” Cunningham said. “Whether that translates into real bidders remains to be seen. You never really know until the day of the auction.”

The successful bidder must have 10 percent of the sale price delivered within 48 hours of the auction and must pay the City of Buffalo nearly $250,000 in overdue property taxes, water and other infrastructure costs.

The deal has to close by Aug. 28.

Those are among the court-ordered conditions.

Given the region’s recent history of dealing with non-local real estate investors, however, skepticism is running deep.

“The first question I would ask them is: ‘Do you understand the market conditions?’” said James Militello, Militello Realty president and one-time economic development chief for the City of Buffalo. “I just hope there is substance behind the investor.”

How much the Statler fetches is subject to much speculation.

Despite a prime location and historic architecture, the 18-story, 752,168-square-foot building has lost tenants at an alarming rate. As recently as February, it was producing $100,000 per month in rent, yet was still losing $80,000 a month.

With an exodus of tenants in the past few months, the building’s monthly rent roll has dropped to less than $15,000, while expenses continue to mount. The only viable tenant is Park Lane Catering, operator of a catering and special-events business on the main floor.

Whoever buys the Statler will be looking at massive renovation costs – well north of $5 million for immediate facade and other structural repairs. A complete, mixed-use renovation could cost $100 million or more, officials acknowledge.

“Just to open the doors again, it will cost you millions and millions of dollars,” Militello said. “Unless you come in and seriously make that capital investment, people will be skeptical. Of course, given the economy, you also couldn’t have picked a more difficult time to tackle a large, spec project.”

The Statler’s current owner, Bashar Issa, a British investor who is facing legal and financial problems in both Buffalo and Manchester, England, pledged to spend more than $100 million on his vision of converting the building into a mixed-use complex with a hotel, condominiums and offices. The project never materialized, and he handled just a small portion of his proposed renovations.

A mixed-use scenario makes the most sense for the building, Militello said.

“It’s too big for just one use,” he said.

One factor that may work in the new buyer’s favor is a set of historic restoration tax credits that Gov. David Paterson signed into law on July 29. The tax credits will offer a developer as much as $5 million on top of other local, state, county and federal incentives that may be crafted for a Statler renovation project.

Mayor Byron Brown, meanwhile, said Buffalo will do whatever is necessary to help bring the building back to life. The Erie County Industrial Development Agency pledged to work with a new owner, as has Empire State Development Corp.

“The state’s (historic restoration) tax credits certainly makes it easier,” Brown said.

“That a developer knows he can save $5 million right off the top is a pretty strong selling tool. Having that in our package makes me more optimistic about the Statler’s future.”


The following article was taken from the Buffalo's Business First Newspaper

Statler bid come in at $1.3M

Business First of Buffalo
by James Fink
Posted: Wednesday, August 12, 2009

A trio of local businessmen emerged as the winning bidder for the historic, but financially ailing Statler Towers that overlooks downtown Buffalo’s Niagara Square.

In a tense, rapid-fire auction, run by veteran auctioneer Cash Cunningham, Park Lane Catering LLC’s bid of $1.3 million was enough to win the rights to acquire the 82-year-old, 18-story landmark building that has been plagued by inconsistent ownership for the past few decades. Park Lane Catering LLC, whose three main partners include William Koessler, owner of Park Lane Catering - the building’s anchor and most visible tenant; local developer Richard Sterben and Tom Zawadzki, a Buffalo businessman with deep ties and connections to the hospitality industry.

The trio was caught in a bidding war with the cowgirl-attired Gail Pirinzi, who declined to identify the investor partnership she represented. Pirinzi left the Statler almost immediately after the auction ended Wednesday morning,

Park Lane Catering’s initial plans are to renovate the Statler into a mixed-use facility, anchored by a 235-room hotel on its middle floors and 111 market-rate apartments on its upper floors. The building’s first three floors will be renovated into Class A office space, Sterben said.

Sterben also confirmed his group is negotiating with three prospective brand name groups to run the hotel. He hopes to have the hotel open within the next 18 months.

In all, the investment group is expected to invest around $100 million to bring the opulent Statler back to life.

Sterben said asbestos removal and other remediation requirements alone will cost approximately $20 million. Work will start by September, he said.

Savarino Cos. has already been retained as the project’s general contractor.

Their bid must be approved by U.S. Bankruptcy Court Judge William Bucki during a hearing set for Tuesday. A closing is scheduled for Aug. 28.

“The Statler will have a new owner and it bodes well for Buffalo,” Cunningham said.

The auction was ordered by Bucki in June as part of a complex series of legal actions against the Statler’s current owner, BSC Buffalo Development LLC, whose principal partner, British investor Bashar Issa is facing legal and financial issues both in Buffalo and Manchester, England. The Statler was place into involuntary Chapter 11 protection in April.

“I’m glad a local and qualified group ended up with the Statler,” said Buffalo Mayor Byron Brown, who attended the auction.

The auction drew a packed crowd of more than 200 people including many of the region’s top developers, lawyers and a host of on-lookers.

Following a 15-minute reading of the legal notice and court-ordered bidding requirements, Cunningham began the much-anticipated proceedings at 11:16 a.m. Cunningham asked for an initial bid of $1 million, but was met with stone silence. After offering the building for $800,000, then $500,000 and $400,000 before stopping at $300,000 the bidding between Park Lane Catering and Pirinzi’s interests heated up.

Within two minutes, Cunningham had nurtured the price up to $1 million.

Eight more bidding volleys between the two groups saw the price reach $1.3 million where Park Lane Catering’s bid withstood its challenge.

Park Lane’s winning bid was meet with a thunderous, if not boisterous round of applause from the interested spectators.

“Was I nervous at $300,000? Absolutely,” Cunningham said. “But, I thought if I could get it (the bidding) going, I could get the price to somewhere between $1 million and $2 million.”


The following article was taken from the Buffalo's Business First Newspaper

Future of key Statler player secured

Business First of Buffalo
by James Fink
Posted: Friday, August 21, 2009

John Gingher was nervous – make that very nervous – before the Aug. 12 Statler Towers auction.

Few people in Buffalo had more at stake in the auction’s outcome than the 6-foot-plus, slender and quiet-spoken Gingher.

Gingher, 56, has worked in the building for 36 years – first as a maintenance man and now as manager of the beleaguered downtown Buffalo landmark. He was there in the last years of the Statler’s prime when celebrities such as Elvis Presley graced its hallways, he’s been there ever since, suffering in recent years through the well-intentioned but sorely unfunded Bashar Issa era,

Gingher knew the auction’s outcome would determine whether he and his eight fellow workers would have a job beyond the end of the month. Some of his co-workers, including a pair of engineers, have been in the Statler for more than 25 years.

That’s the rub about the building.

Despite its revolving door of ownership, at its core is a group of loyal workers and tenants who refused to give up the fight and concede what could have been an ugly fate. The workers and tenants were silent victims in the legal circus that surrounded the final days of the Issa ownership era.

As it turns out, for Gingher and his crew, the best possible scenario emerged from the auction when New Buffalo Statler Development LLC was the highest bidder.

“I wouldn’t have touched this building unless I knew John and his crew were going to be here,” said Richard Sterben, a New Buffalo partner. “If this place needs a burp, John is the guy to help it burp.”

Throughout the Statler’s troubled recent past, during which Gingher spent as much time in court as he did in the building, he has been the calming voice.

By his own admission, he spends sometimes 14 hours a day doing everything from answering questions to mopping floors.

“I think I crawled through every inch of here once or twice,” he joked.

With his dark, ‘50s style, quasi-pompadour haircut and greying Elvis sideburns, he is, in many respects, the face of the Statler. Rare is the day that he is not somewhere in the building with a pack of Marlboros in his shirt pocket and Blackberry in hand.

The stress is taking its toll.

“I was seriously thinking about quitting (smoking), but not after what’s gone on here in the last few months,” Gingher said.

In an interesting juxtaposition, while the auction was taking place to secure the Statler’s future, crews were busy moving a law firm out of the building. While the 800,000-square-foot building was once filled with hotel guests and office tenants, it is down to less than a dozen tenants and has monthly losses exceeding $100,000.

Losing a tenant takes a little bit out of Gingher.

“It hurts, but I understand it,” he said.

On a personal level, he is glad that the former Park Lane Catering ended up with the building. It secures his future, but also guarantees the Statler will stay open and viable.

“I know there were some groups that might have completely shut the building down for the next two or three years while they tried to figure out a plan,” Gingher said. “The building never would have been the same. My biggest fear is that this could have been the next AM&A’s or Central Terminal.”

Both the AM&A’s flagship store on Main Street and Central Terminal fell into disrepair after being closed for years. The Central Terminal is only now being restored by a group of community volunteers.


The following article was taken from the Buffalo's Business First Newspaper

New development in Statler deal

Business First of Buffalo
by James Fink
Posted: Monday, October 19, 2009

A $261,000 good faith check delivered by the prospective new owners of the Statler Towers has been returned after the Connecticut investment group that underwrote it stopped payment on the check.

The stop-payment order, which came late last week, is the latest chapter in the complex legal maneuvering that may see the venerable and historic downtown Buffalo building change hands. U.S. Bankruptcy Court Judge Carl Bucki, after hearing a brief discussion from lawyers involved with the case, agreed to hold a closed-door status conference Tuesday afternoon, but Bucki, also said the outcome of the private meeting will be discussed in open court following the conference.

The payment was promised on Sept. 29 by lawyers representing New Buffalo Statler Redevelopment LLC — the local group which in August submitted the highest bid for the 18-story building. The deal was supposed to close on Aug. 28 and the closing date has twice been postponed — now until Nov. 30. New Buffalo Statler Redevelopment bid $1.3 million. The group has already made more than $300,000 in advance payments towards the closing, plus have been paying the building’s weekly operating costs since early September.

However, the stop-order payment took many by surprise.

“We’re in the process of getting it replaced — or trying to,” said William Koessler, one of New Buffalo Statler Redevelopment’s main partners.

Koessler declined to comment on why the check stoppage was made.

“This kind of took us back,” Koessler said. “We didn’t expect it to happen.”

Koessler operates Park Lane Catering, the Statler’s anchor tenant and one of the few remaining tenants in the building. Park Lane Catering initiated the legal action against the Statler’s current owner of record, BSC Buffalo Development LLC, a group headed by British investor Bashar Issa. BSC Buffalo Development acquired the building in 2006 and promised $100 million in renovations, few of which were ever completed. Issa is facing legal and financial problems in both Buffalo and Manchester, England.

The building was put into involuntary Chapter 11 protection in April, a move that lead to the Aug. 12 court-mandated auction.

In the meantime, Issa’s father, Mohomoud al Issa, alleges he has a valid $4.5 million mortgage on the building .

The elder Issa’s attorney, Raymond Fink, said during a court hearing Monday morning before Bucki that the returned advance payment check is a red flag.

“We’ve got a serious situation here,” Fink said.

The advance payment was one of the conditions Bucki included when he agreed to extend the closing date to Nov. 30.

“This is a significant negative turn of events,” Fink said.

Court-appointed trustee Morris Horowitz said he agrees the issue should be discussed in a closed-door status conference before any further decisions are made. Horowitz, however, did express optimism that he thinks New Buffalo Statler Redevelopment will be able to meet the Nov. 30 closing date.

New Buffalo Statler Redevelopment, whose other partners include local businessmen Richard Sterben and Tom Zawadzki, are proposing their own renovation effort that includes bringing some upscale apartments, a hotel, Class A office space, several restaurants and a jazz club to the 82-year-old building that overlooks Niagara Square. They have pegged their development costs at $100 million.

New Buffalo Statler Redevelopment is negotiating with developer Uri Kaufmann and Cleveland developer John Ferchhill about partnering on the project.

Should New Buffalo Statler Redevelopment fail to make the Nov. 30 closing date, the building faces a bleak future including being the subject of another court-mandated auction or even being completely closed.

“We’ve been trying to make this work since August,” Koessler said. “Hopefully, there will be a positive outcome.”


The following article was taken from the Buffalo's Business First Newspaper

Statler payment: Better late than never

Business First of Buffalo
by James Fink
Posted: Wednesday, October 28, 2009

The prospective new owners of the Statler Towers in downtown Buffalo have officially delivered the $261,000 advance payment on their $1.3 million purchase price for the local landmark, albeit 26 days late.

The check from New Buffalo Statler Redevelopment LLC was delivered in the middle of a U.S. Bankruptcy Court hearing Wednesday in an almost Hollywood-like fashion. The payment clears the way for New Buffalo Statler Redevelopment to complete its twice-delayed closing date by the Nov. 30 court-imposed deadline. With the check, New Buffalo Statler said it has invested more than $750,000 in the building — including $500,000 towards its $1.3 million purchase price.

“We’re happy this was worked out today,” said Garry Graber, special counsel to court-appointed trustee Morris Horwitz. “It makes it much more likely this deal will close. The trustees have a new level of confidence.”

The payment was offered one month ago as an incentive to extend the closing date by 60 days to Nov. 30. It was due to be delivered on Oct. 2, yet on Oct. 16, a surprise stop-payment order was issued by the Connecticut-based investment group that had forwarded the money to New Buffalo.

Delivery of the money was promised Monday in a court session and was due to be delivered by 5 p.m. Tuesday. It finally arrived, via e-mail to iPhone, Wednesday morning as the lawyers were huddling.

“People wouldn’t have put dollars into this and put at risk unless they were confident in the deal,” said attorney William Savino, representing the buyers.

The happy tenor was a marked difference from earlier in the day when the delivery of the check remained in doubt and there were hints that Horwitz might have pushed for declaring New Buffalo in default of its bid, a move that would have seriously clouded the Statler’s future.

The latest wrinkle in what has evolved into a complex legal case involved a last-minute demand from Horwitz that the trustee’s fee be increased by $50,000 to cover the extra issues attached to the Statler closing, including the delayed good-faith payment. Initially, New Buffalo’s legal team balked at the charge.

“The figure is definitely into the five figures, but I don’t think it is 50,000 of U.S. dollars,” Savino argued.

Yet, while other attorneys were discussing Statler-related matters with Bankruptcy Judge Carl Bucki, Savino was seen passing new figures back-and-forth on a yellow legal pad between himself, Graber and Horwitz. In the matter of minutes, they agreed to a $30,000 additional fee, which will be added to the final closing costs.

The extra money is strictly to cover the rising costs connected with the Statler case, Graber said.

Meanwhile, as Bucki allowed Horwitz to accept the good-faith check and the additional fees, skepticism remains about the future of the structure.

New Statler, a development group headed by William Koessler, Richard Sterben and Tom Zawadzki, are planning a $100 million dramatic face lift of the Statler, converting it into a mixed-use facility anchored by apartments, a hotel, office space, restaurants, a jazz club and Koessler’s Park Lane Catering operations.

The Statler’s fate has been in question since it was placed into involuntary Chapter 11 protection earlier this year by Bucki. The Statler’s current owner, BSC Buffalo Development LLC, and its principal, British investor Bashar Issa, are facing legal and financial issues in both Buffalo and Manchester, England.

Raymond Fink, who represents Mohmoud al Issa — Bashar Issa’s father, has been openly critical of New Buffalo’s road to closing on the deal.

“This case is turning into a circus of sorts,” said Fink.

The elder al Issa alleges he has a $4.5 million mortgage on the building. That claim is being challenged.

“This is borderline insane,” Fink said.

Bucki, however, said extra latitude must be given to the Statler because of its landmark status and towering presence overlooking Niagara Square.

“It is an irregular process, but it is an irregular kind of asset,” Bucki said. “The court is well aware of the problems of this case from the beginning. It is in the best interest of everyone that the conditions are approved as presented.”


The following article was taken from the Buffalo's Business First Newspaper

Concrete falls off Statler Towers

Business First of Buffalo
by Elizabeth Carey
Posted: Thursday, October 29, 2009

City of Buffalo building inspectors said pieces of concrete fell from the Statler Tower Wednesday evening and some loose concrete remains on upper floors of the landmark.

Pieces of the decorative facade came crashing down to Delaware Avenue just after 8 p.m., closing streets around the building.

Buffalo fire officials estimate somewhere between 200 and 300 pounds of debris covered the southwest corner of Delaware Ave. and Mohawk St., which is occupied by a bus shelter and three mailboxes.

No one was walking in the area near the time. Officials said no one was injured.

Don Poleto, the city’s senior engineer, inspected the exterior of the building from a window on the 18th floor and said the street below is unsafe for pedestrians or vehicle traffic.

This isn’t the first time chunks of the 87-year-old building came crashing down to the street. In June of 2003, a part of the facade crumbled.

Delaware Avenue remained closed Thursday morning between W. Huron St. and Niagara Square. Mohawk St. is shut down between Franklin St. and S. Elmwood Ave.

Earlier Wednesday, New Buffalo Statler Redevelopment LLC paid a $261,000 deposit on the property after missing several deadlines. The group wants to redevelop the site, with an estimated cost of $100 million.


The following article was taken from the Buffalo's Business First Newspaper

Buyers fail to close Statler deal

Business First of Buffalo
by James Fink
Posted: Monday, November 30, 2009

Despite assurances that the final $800,000 would be delivered by a bankruptcy-court imposed deadline of Monday afternoon, it appears to prospective buyers for downtown Buffalo’s Statler Towers have failed to meet that goal.

By not acting the group has potentially put their bid into default while casting an ominous shadow over the future of the Niagara Square landmark.

While the court appointed trustee, Amherst attorney Morris Horwitz and his special counsel, Hodgson Russ LLP Partner Garry Graber, waited for representatives for New Buffalo Statler Redevelopment LLC to arrive in downtown Buffalo with the closing funds - approximately $563,000 to the trustee and proof that nearly $300,000 in back taxes were paid - the seeds of doubt continued to rise. After a 90-minute wait, Tim Greenan, attorney for New Buffalo Statler Redevelopment called Horwitz and asked for an additional meeting. Greenan, earlier in the afternoon, went to Horwitz’s Amherst office.

William Koessler, one of New Buffalo Statler Redevelopment’s partners, called the locational mix up “a misunderstanding.”

“Hopefully, they work this out Tuesday,” Koessler said.

Koessler, who owns and operates Park Lane Catering - one of the few remaining tenants in the Statler, said he remains confident the $800,000 is available.

“I don’t have any reason to doubt that,” Koessler said late Monday night.

Others, however, are more skeptical.

The closing has been twice-delayed since the Aug. 12 bankruptcy-court mandated auction of the 18-story, venerable downtown Buffalo. New Buffalo Statler Redevelopment bid $1.3 million and said its $100 million redevelopment plans include bringing a brand-name hotel along with some apartments, office space, restaurants and a jazz club to the building - all anchored by the Park Lane Catering operations off of the main lobby.

“You never want to say never,” Graber said. “But, at this point in time, the trustee is under no obligation to complete the transaction.”

The Nov. 30 deadline, set by U.S. Bankruptcy Court Judge Carl Bucki one month ago, was widely viewed as the final point to close the highly-watched transaction.

New Buffalo Statler Redevelopment has already invested more than $500,000 in good-faith advance payments towards their $1.3 million bid price. They have also been paying the building’s carrying costs since early September - approximately $12,000 per week.

Horwitz said he expected to talk with Greenan later Monday evening before discussing with Graber what any future plans may entail. Horwitz and Graber are likely to seek a status conference before Bucki later this week.

Possible options include offering New Buffalo Statler Redevelopment another extension; re-auctioning the building or closing it down and mothballing the structure for a future sale or auction.

Horwitz did say he considers New Buffalo Statler Redevelopment in default.

“We will consider several options and then report to the judge,” Horwitz said.

The Statler was placed into involuntary Chapter 11 by Bucki this past spring as its owner, BSC Development Buffalo LLC and principal British investor Bashar Issa, are facing legal and financial difficulties in both Buffalo and Manchester, England.


 

 


2009 by David Statler of StatlerWeb
Last Updated: December 02, 2009