Local businessman William Koessler of Park Lane fame submitted the winning bid for the purchase of the Statler Hotel this morning in an auction conducted by Cash Cunningham, as a result of a bankruptcy filing by former owner, Bashir al-Issa.
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The bidding took less time than Cunningham used to review the terms of sale prior to the start of the auction, in which he detailed the rules bidders would be held to. In the end, the most salient point becomes the fact that the new owner, Koessler, will not have to pay any debts attached to the building. "You get what you pay for," Cunningham said, and then the bidding began.
Cunningham started at $1M, dropped to $800K, then $500K, then $400K. Still, the room was silent. "Look around," he told the crowd. "Some day you'll walk by with your grandchild and say, 'I had the chance to buy that building for $400 thousand, and I kept my hand in my pocket.' What do you want to give?"
One man answered, "ten thousand." Cunningham made him repeat it several times and answered, "I said higher, sir, not louder."
The bidding began at $300,000 and went in increments of $100,000 all the way to $800,000 before Cunningham started offering increases of $50,000, and then $25,000 when things slowed down. He interjected with comments like, "fifty thousand, look around," "That's not even close to a dollar a square foot," and "I can count all the way up to $2 million in quarters if it helps."
In the end, Koessler made the winning bid and left the room, returning to his Park Lane office within the building. He is expected to make a public statement about his plans for the Statler this coming week, but Cunningham expects it will operate in much the same function as it has. "No one really had any way-out ideas among the potential bidders," according to Cunningham.
Mayor Byron Brown stated he's very happy that a local person will be taking possession of the Statler, saying that Koessler "understands this community and this building. He owns several businesses, understands the business climate here, and I'm sure he has good ideas."
Brown also said that the city will help Koessler by lobbying the state for grants and loans and will "do whatever we can to help." The mayor said the city has invested substantial money to build downtown and the city, and he will help to see that the Statler is redeveloped. He also said that the estimated price tag for renovation of the Statler, placed between $80 to $100 million, will likely see help from the Historic Rehabilitation Tax Credit program Governor Paterson recently signed. It will be up to Koessler to have the Statler listed of the National Register of Historic Places first.
Was Cunningham surprised that some of the out-of-town entities that showed interest didn't jump on the bidding. "We marketed it well," Cunningham said, "but I'm not surprised considering the enormity of the project. Even eight to 10 weeks [going up to the sale date] is not enough to get a handle on financing for something of this scope."
Update, according to The Buffalo News:
Bill Koessler, owner of Park Lane Catering; Richard J. Sterbin, a local real estate consultant; and Tom Zawadzki, a local mortgage broker, outbid a single other bidder for the property.
The group plans to remodel the building with 235 hotel rooms, 111 apartments, two restaurants, a coffee shop, a jazz club and retail space. Sam Savarino of Savarino Construction will be the general contractor.
Plans call for asbestos removal to begin as early as September.
The official end to Bashir al-Issa in Buffalo....GOOD RIDDANCE TO BAD RUBBISH.