Statler in Big Trouble

What was the purpose of the whole forced bankruptcy thing in the first place. It seems to me that it was just a way to make the building empty. It had a cash flow prior to the government's actions. Now it has no tenants and no real owner. The court needs to step up on this.

DEMOLISH? PARKING LOT?

What if the City set up a system where abandoned structures for tax purposes were assigned diminished "worth" values ona year by year basis whereby reducing the tax burden and in some cases, where buildings may have been abandonned for prolonged periods (a number of years), a new owner with plans to give use to the structure might actually have no tax burden at all? Essentially the value would have to then return over time at the rate that it was determined to diminish? Would this act as an incentive to revitalize these structures? As long as there's more money to be made with rents I would think a strongly reduced tax burden on these structures might be beneficial. Buffalo and WNY just have to work on their population and demand issues.

Multi-story parking ramp with UB Law School above it. Or more offices. With a level or two of ground floor retail, you could get a new build there up to 15 or more stories. Plenty of tasty architectural salvage too...

I'll buy it for 10 dollars if someone wants to go halfsies with me

Here's case study #1 for all those proposing to change our traditional real estate tax policy to one in which actual property values would be replaced by 'potential values'. According to advocates of taxing property based on a standard based on location and 'best and highest use', surface parking lots downtown (which are loathed by said advocates) would become financially untenable because the value of the land would be so high that expensive buildings would necessarily be constructed in their place in order to make the tax burden affordable for these prime properties. No longer would substandard crap occupy valuable land, these advocates promise.

Yet here we have a very large (800k'+) building in an absolutely prime location and yet which actually has no value to investors. The tax system advocated by those parking lot haters would certainly not help the Statler, as high taxes (based upon location and potential) would be jacking up the operation/acquisition costs of this property unrelentingly.

It was the consensus in our office (Pyramid Brokerage) prior to the auction that this building had negative value at the time of the auction. We were all surprised at the $1.3m bid, which exceeded all our estimates (15 agents). There were some tenants in place then, but the revenue didn't meet the outgo even then. The bankruptcy was forced by tenant complaints that services were not being provided and that utilities were in danger of being terminated. Even when Bashar controlled it, the property was losing $80k/month. When Gerry Buchheit owned it, perhaps it had positive cash flow. But that was quite a while ago.

So, any defenders of that alternative tax scheme which taxes properties for their 'potential' instead of real value: how do you propose the Statler should be taxed?

What if we give it to Carl Palladino if he promises not to make an ass out of himself by running for Governor?

Would not Buffalo be better off if Horwitz and Freudenheimer were representing the worth and value of every building in our city and our region?

May I just remind every naysaying toxic pessimist that wants to exploit and turn the lights out on our city:
-the proposed Boutique Hotel is not finished
-the federal courthouse is not finished
-the Court Street Tower is not finished
-the future of the downtown convention center is not decided
-the possibility of a downtown dormatory of UB students (medical, law, performing arts, journalism, IT, etc is not ruled out)
-the AM&As, AM&As Warehouses and Lafayette are not finished

Any one of which could raise the value of the Statler into the last remaining and prime development opportunity in downtown Buffalo and in our region.

I can only applaud the there are Buffalonians who devote their lives to the future of our city and protect it from the type of people that Horwitz and Freudenheimer represent.

This is demoralizing

What exactly is non-sense?

Unless you are saying that immoral, disloyal, unpatriotic, exploitative (etc) behavior can be criticized EXCEPT if such actions must be censored and silenced as ideologically incompatible with politically correct, diversity, multi-cultural, (etc) of documented victimized groups (ie its group specific).

but like Paul Buffalo and grad94 and other leninists, trotskyite, Stalinite, Castroite, chavesite, Peronista, leftist, socialist, atheist, communists, feminists, abortionists (etc) never hesitate to say that the only people excluded from such groups such special moors of victimization are whites and christians and of course men.

What you take offense to is not their actions but their names associated with their actions...and perhaps...just perhaps...you should spend less energy on the names and more thought on their actions...you athestic/agnostic fascist.

Let me say this last word:
Diversity and multi-culturalism had its origins in building upon how an individual or a group could contribute to a goal, a project, a company, a community, a nation, etc.

Diversity and multi-culturalism doesnt work if one manipulates it as a globalist and an outsider, not to contribute but to silence, not to assimilate but to exploit, not to strengthen but to deflect...

"May I just remind every naysaying toxic pessimist that wants to exploit and turn the lights out on our city:
-the proposed Boutique Hotel is not finished
-the federal courthouse is not finished
-the Court Street Tower is not finished
-the future of the downtown convention center is not decided
-the possibility of a downtown dormatory of UB students (medical, law, performing arts, journalism, IT, etc is not ruled out)
-the AM&As, AM&As Warehouses and Lafayette are not finished

Any one of which could raise the value of the Statler into the last remaining and prime development opportunity in downtown Buffalo and in our region."

So this comment is factual, objective, acceptable...its an issue affecting the fate of our city and region.

To name the names of the people who stand counter to community values such as patriotism, loyalty, community, etc...that changes everything...why?

[deleted- flaming]

Look around at our country...no please look beyond the statler...the abuses of the powerful, the abuses of the privileged, the abuses of the knowledgeable, the abuses of those in positions of social leadership...

there are reasons why the very successful have thru expediency, exploitation...and well intentions...brought the world its greatest evils: Stalin, Hitler, the collectivization of farms via mass starvation of millions in eastern europeans/russians, mao, etc.

[deleted- wayyy off topic]

[deleted- off topic]

The physical loss of this landmark will be more than the death knell for Buffalo's skyline. It will be so much more than just another structure gone. What a hit downtown would take!

UB should simulate an earthquake on it

I'd prefer to not suggest the following... but given the circumstance, here goes.

If the Obama administration insists on trying the Gitmo detainees, this might be a reasonable place to do it. It has a proximity to NYC, which the admin. would like. The building could actually hold the detainees while being tried (as well as many others associated with the prosecution). The ballroom could be converted to a court room. Security would be a nightmare, but it's going to be anywhere that the trial occurs.

If we're going to save this building, the range of options considered to do so needs to be greatly expanded. This is just a first thought, any others?

Many pictures were taken of that cement crashing to the sidewalk. The damage covered a frighteningly large enough area to wipe out several people "in one felled swoop".
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If the crashing pieces had fallen in the middle of a weekday afternoon, many members of the upper-middle-class, suit-and-tie set could have been killed! Who had a problem figuring out that the newest owners' next action would be to back out of the deal!
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There were also many injured people in and out of that building every week day.
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In bluedevil's topic on 10-28-09 I commented about skimming off all that old trim and finding profitable reuses as decorative pieces. But I changed my mind on that. It would be better to just shave all that stuff off and use it as landfill. Very old cement turns to mush.
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I don't understand why that building is considered to have negative value. Besides all that overhang, are the bricks loose? Do any of the roofs leak too badly to resurface? Does it have a crumbling base or basement area? All of Buffalo's sewer lines are ancient so that would not reflect on the uselessness of any one downtown building.
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And, of course, filling it with students won't happen because, not only is that too practical a thought but, practicality does not fill archi pockets!

Yes this is a problem, and as soon as the building has no heat its condition will fall precipitously. I do think this doom and gloom is a bit unwarranted yet. The building is in observably good shape and has at least undergone minimal maintenance until recently. Recently WCP wrote an article on the King Edward Hotel in Jackson, MS which was in much worse condition and was rehabbed and is now the crown jewel of the city.

I think there is a bit too much panic and overreaction at this point. Yes there are issues with the building, but the right package of incentives and funding sources can make the project viable...but not right now! People need to stop looking at this project in a bubble, commercial real estate currently is dead, there are no projects being undertaken as there is NO financing available, NONE! Look at Rocco, he can't get financing for his projects and there are tens of thousands of projects in the US that have gone away in the past year due to a lack of financing. If there continues to be no interest once the economy comes back and the credit markets loosen, then I'll be more worried.

I like the idea of UB law taking this building over, and maybe bringing the architecture school in so both departments could the sapce for practicum, with close access to the courts and initially as an exercise in effective building re-use. The architecture students could be engaged in studies of building re-use within the city and be closer to some architecture master works than the South Campus is, and certainly more so than the North Campus. Sure it will be a loss of revenue to take it off the tax rolls, but let's be realistic - with teh work required to restoure & maintain this structure, who else will have the necessary capital or long-term vision & commitment to stay than UB? UB isn't going to offshore itself, it's 2020 plan aligns to connecting better with the city. The lower floor could be retained for public access, events, and perhaps bringing Park lane Catering back as a tenant. I'd start the conversation soon with UB if I were Mayor Brown, so that a huge vacant historic landmark didn't sit across from my swank office for too long - serving as a reminder of the problems of doing business in my city. Just a suggestion.

I agree with Nick. The financing for this rehab isn't going to materialize this year or next. And that's okay.

What would not be okay, in my book, is recreating the mess that was the Central Terminal in similar circumstances. In that case, which happened under Jimmy Griffin's watch, the CT was auctioned at tax foreclosure and was bought by a dreamer without pockets who proceeded to strip all the valuable fixtures and decorations out of it for fun and profit. Then he left the stripped hulk to rot when he couldn't carry it.

What should happen now is to model a citizen group along the lines of Central Terminal's non profit corporation. A Statler preservation non profit would have many, many supporters. Just like the CT, they could tackle one issue at a time. Like the CT, they could host fundraisers and occasional events, etc. Let like minded supporters help preserve the shell for another use, another day. Form the corporation now and have the corporation volunteer to accept ownership of the property. I'm thinking a bankruptcy court judge, facing the choices he is now facing, would welcome such a recipient entity.

UB is a bad fit for ownership (period). They could be a tennant, but not the whole school. Who would take the Med Schools place on the South Campus? And the architecture school? Those who suggest this have never been in a professional school. Students do not Learn through Osmosis.

I think the Statler is a White Elephant. I would love it if a developer could buy from Niagara Square North to West Huron, Demo the entire block, and infill with good Urban Contemorary architecture befitting a Delaware Avenue address. Lets face it, Issa was the last good hope for the Crapler. Take pictures, because one way or another it will be demoed. (that is either by neglect or wrecking ball)

In the short term, the building needs to be made safe, but it will be redeveloped. Downtown tenants want cool space in a convenient location, but if they can't have the most convenient location, they'll grab the cool space. That's why the Larkin Group had success that exceeded everyone's expectations at the LCo Building. That's why they're developing a Larkin District master plan and buying up all the surrounding properties.

Cool space is why the Genesee Gateway project is finally happening, following 20+ years of vacant buildings. But it took other investments in the "flower district" by folks like Rocco to trigger this development.

As long as the community rallies around this building to secure it and protect it, it will be redeveloped. It will be expensive, and it needs to be, so that it attracts quality tenants, but it has the potential for lots of cool space, and it has a better location than either LCo or Genesee Gateway.

This building is actually in excellent shape all in all. Aside from the chunk of terra cotta falling it is watertight and structurally sound. The roof is only a couple years old, the windows from the third floor up are newer too.

The worst thing that happened was forcing out the tenants and subsuquently mothballing it. There may not have been positive cash flow before but at least they were covering about half the costs. Remaining tenants left and prospective tenants overlooked it due to the unkown fate and panic caused by the bankruptcy court. If everyone wasn't scared off it wouldn't have been too difficult to add a few more tenants to cover the costs. At that point you could have renovated one floor (or wing) at a time and slowly increase occupancy. Now we have an empty building with no heat. The place will fall apart exponentially in the next 2 years and be even more worthless. This is as shameful as what the PBA is doing to the Colmbus Park neighborhood.

If a group were formed to keep this place together it needed to be formed about a year ago. The city should do something to at least keep the utilities on and the 4 engineers to keep watch.

Blow up this building. It's functionaly obsolete, and needs too much money to make it functional again. Start fresh

google "the Biltome Hotel" Atlanta and the "The Biltmore Ballrooms" Atlanta...It can be done, and well. So don't give up hope. The old gal has good bones and could one day rule Delaware again.

it has no hope without heat, its not going to need to get demoed, its just going to fall apart on its own if no one takes care of it......it is just so stunning inside i wish that someone could find a use for it, there aren't any other ballrooms in buffalo like it, maybe try and get a rooftop lounge or restaurant, it would have amazing views

Here's my big idea of the day!

As backdrop, consider:

First, Steele's point (shared by others) that this building wasn't such a financial catastrophe only a few years ago. Beyond mismanagement, what's really so tough about making this thing float?

Second: Arch's assessment (also shared by many) of the property as flawed (too big to digest for one use, low ceilings, ginormous pillars everywhere with broken up floor plates--which rules out big open spaces, no parking).

I suggested yesterday that a Statler citizen's group, akin to the Central Terminal Restoration Corporation, be formed. Here's today's twist: Let's set it up in the form of a not for profit REIT (Real Estate Investment Trust), assuming there is such an animal.

A REIT (from what rudimentary information I know) is simply a corporation which sells stock and whose purpose is to buy and manage real estate. Like any stock selling corporation, owners can choose to own a little of the company or a lot.

UB shouldn't buy this place. But they might want to buy a few shares in the non profit REIT, say enough to convert a few wings into dorms for students wishing to live downtown. Mabye Canisius or Medaille or D'Youville, Buff State or ECC would want a little of that action.

Maybe individuals would want to buy a couple of adjacent hotel rooms to build a condo out of. The build-out is your responsibility. Convert two old hotel rooms to a kitchen/living room and bedroom/bath. But do it on your own dime, at your own pace. Maybe you only pay $10k or $20 for the raw space. The corporation gets out from under the burden of costly rehab. Urban pioneers get a cheap path toward ownership of something they'd never afford later.

Let's revisit Steele's point. A few years ago it wasn't a goldmine, but it was open and working and sold for a few million. Some tenants can apparently be convinced to locate here. The recent auction defaulters lost over a half million trying to save the place; they place some value on being there would pay to rent if they didn't have to carry the whole thing. So we're not starting without some possibilities for income.

Without real estate taxes, it's a smaller nut (not for profit ownership) to carry.

With the goodwill the Statler enjoys throughout the area, the opportunity to participate in ownership, through stock and perhaps through inexpensive condo (no parking, raw space), might be attractive enough to generate some serious capital (perhaps foundations would join in ownership as well).

Run the not for profit like the CTRT if there's no money to open the doors. Hold a few events here and there and protect the place as best you can until some brighter tomorrow or the wrecking ball intervene. But this is place which could open back up with relatively small changes. A non profit REIT whose corporate mission is the salvation of the structure might be just the ticket.

BINISZKIEWICZ: Being extremely fearful is one of the definitions of paranoid. I AM extremely fearful of how NorPark singles me out then feels no need to explain. I see that goofy stuff happens here, but NorPark appears to be on some sort of creepy mission directed at me, therefore, 'the check(ing) is in the (e-)mail(ing)'...
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I am not fearful of the Statler building falling on me, unless the falling cement reaches to traffic moving past it...
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I do understand how minus value happens, but, maybe you explained it to other readers here and you did that very well...
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I forgot to include the conditions of the elevators in the Statler.
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And, again, its a perfect site for students including the ones mentioned above. Students who have cars would need a shuttle service to and from a parking facility elsewhere though. And, those uppermost floors are great for seeing for miles and miles and miles for other sorts of schools' groups too.
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'The Statler School of Visual and Functional Arts'???

Bob - I like the way you think. Very creative. I'm no expert (but thanks for the vote of confidence), but I don't think a REIT is the right vehicle for redeveloping the Statler. People with money to invest in real estate choose REITs that own and operate a lot of income-producing property and that pay good dividends. I don't think there are enough folks with significant money that would invest in a single asset, completely speculative, high-risk property with no realistic opportunity for a return on their investment in the short term.

A not-for-profit like Central Terminal Restoration Corp was a good choice for that property because it wasn't going to be redeveloped in the short term. The CTRC organized lots of volunteers around a common vision of: preventing demolition, securing the building and grounds, preventing further deterioration, making a few key improvement (fixing & lighting the clock) and building public awareness and momentum for eventual redevelopment.

The Statler has a lot more going for it, and I would guess there are a number of developers who will look to take a swing at it. Rocco tried for the silver-bullet lease with the law school, but I think that was a mistake for several reasons. But I don't know any local developers who can cobble together a more creative mix of financing tools than Rocco. But no matter how many creative financing tools are used, it comes down to identifying enough potential tenants to get started, using federal and state historic credits to do the exterior, then slowly building out to accommodate tenants. I would try and figure out how to get Park Lane Catering back into the building asap. Last thing you need is them putting their business somewhere else.

I have some experience dealing with city hall. it is my opinion that Brown and Cornerford wanted the high bidder out and the building empty from the start. The court is being manipulated, so don't look for help there.

Saving this building is our greatest war.

But don't look for help from Brown, he has been listening to Cornerford so long Brown is like Charlie McCarthy on his lap. This building needs UB's law school and would get it if Erie County sweetened the pot with Grover Cleveland Golf acerage (all of it).

Don't fool yourselves, the forced backruptcy was a means to empty the tenants, and push for city 'care' of an aboandoned money maker. Look for this on the next REM list Steel.

If only all of the Federal Courthouse proponents would just of used their thinking caps , instead of spending $127.5 million to build the "WTF" building across the street , our money could of been used to restore the Statler making 1/3 a fancy federal courthouse for all the judges, lawyers & Brian Higgins and the other 2/3 a mixed use facility. Seriously, where was the uproar when our public servants decided to spend over $120 mill on a limited use building , that is only beneficial to a handful of citizens (they should of put the courthouse in the Central Terminal - about time the judges & lawyers stepped out of their comfort zone).Its a joke that our servants who know nothing about creating jobs and reviving an area make these decisions for us , elections are a joke , the only ones who seem to vote are the unemployed. Discusted , tired of paying mega taxes to the City Of Buffalo. Byron Brown deserves every comparison to Kwame Kilpatrick too, now they both have something in common, neither one of those cities could keep their Statler Building. Discusting... Again , we allow ourselves to be publicly humliated, spending $127 million on a structure that doesn't have any income generation for us . I could go on and on...