A group of three local entrepreneurs turned in the winning bid for the Statler Towers hotel building, a landmark in the skyline of downtown Buffalo, New York. William Koessler, Richard Sterben and Tom Zawadzki outbid Gail Pirinzi for the rights to purchase the iconic structure that was first erected in 1927. After submitting the group’s bid of $1.3 million, Mr. Sterben commented that the redevelopment plans for the site will cost around $100 million, with the price tag on the asbestos removal alone running up to $20 million.
The group has announced plans to convert the structure into a multi-purpose facility. The lower sections of the eighteen-story building will be turned into retail, entertainment and office spaces. The middle floors will have over two hundred hotel rooms, while the upper stories will have over a hundred “extended-stay” style apartment. Mr. Sterben also stated that the renovation efforts are slated to begin next month, starting with six months allotted for asbestos removal and remediation. The group is hoping to have the site ready for renovation early next year and is discussing a partnership arrangement with representatives from three major hotel chains once the facility re-opens in the spring of 2011.
The site was available for auction when it the former owner, British businessman Bashar Issa, was forced into involuntary Chapter Eleven bankruptcy back in April by U.S. Bankruptcy Court Judge William Bucki. Mr. Issa has recently faced numerous legal issues, both in Buffalo and in his hometown of Manchester, England. One report from January 2008 states that Mr. Issa terminated two workers who attended an asbestos removal seminar sponsored by the Occupational Safety and Health Administration (OSHA) and that he did not provide the required safety equipment to workers assigned to remove asbestos from Statler Towers.
The previous owner of the property, Gerald A. Buchheit, sold the tower to Mr. Issa in 2006. He stated that the group would have a difficult task ahead of them during the renovation project. He said that Mr. Issa left “a mess” when he went back to England to deal with similar problems on his projects in Manchester. According to many reports, the property had been in a state of disrepair since Mr. Issa’s purchase due to his disagreements with local construction and labor unions. Due to his legal problems in England, Mr. Issa was not in Buffalo during the auction.
Buffalo Mayor Byron Brown and other city officials expressed their gratitude at the fact that a group with local interests now owns the landmark building. Morris Hororwitz, the bankruptcy trustee assigned by the court to oversee the Statler’s fate, also stated that he was “glad” that a local group, specifically a group of qualified developers and businessmen that have years of experience in the region, was interested in moving forward with the redevelopment project.
The Statler renovation is the newest hotel project to start up in a burgeoning scene in downtown Buffalo. One local developer has recently opened a branch of the Embassy Suites hotel chain and another is working on a smaller hotel for a higher-end clientele. David Pfalzgraf, an attorney for the investors, said that the group is confident that the demand for more hotel and apartment space will be in place by the time the project is completed in eighteen months.
Sources: SpeakUp New York, Buffalo News, BizJournals