City November 13, 2010 9:00 AM

State Backs Statler Reuse Plan

State Backs Statler Reuse Plan

Statler City LLC's phased approach to redeveloping the Statler has State backing- to the tune of $5 million.  That according to this morning's The Buffalo News.  Funding from the NYS Economic Development Corporation is contingent on the City contributing $500,000 to help stabilize the building and redevelop the building's bottom three levels.  The upper floors would be renovated in stages and would house a mix of uses under a plan unveiled Wednesday by Mark Croce and James Eagan.

From The Buffalo News editorial:

Dennis Mullen, head of the New York State Economic Development Corp., has said he will come up with $5 million in state funds if the mayor comes up with $500,000 from the city. The mayor, in a very responsible reply, said he needs more details, but is prepared to come up with the $500,000. That would be enough to stabilize the building, under a creative plan outlined by two local prospective buyers.

Buffalo is littered with great ideas that have resulted in half-finished and abandoned projects. We don't need another that leaves taxpayers holding the bag. In the past, the statement that it would take $100 million to save the Statler has frightened everyone.

The incremental approach proposed by Mark Croce and James J. Eagan -- backed by Preservation Buffalo Niagara -- is sound and comparatively cheap. They recognize that no building this size can be turned around overnight and have spent the past week reframing the debate.

Croce and Eagan are local businessmen with a track record of local investment. Croce, in particular, has a history of successful downtown restaurant and parking lot ventures that gives him a huge stake in the Statler's success.

statlerrender11.jpg

Statler "Rudnicked"- renderings by Flynn Battaglia Architects.

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I feel cautiously optimistic.

Score: 7 ( 7 votes ) Vote up Vote down Report this comment

Haha. Good to know that the people at Flynn Battaglia Architects have a good sense of humor. Removing a giant structure for a ground level parking lot is even more horrifying/hilarious in rendered form than it is imagining it.

As for this news, you know Rudnick is out of touch when the State is in favor of keeping this beautiful building and he's not.

Score: 6 ( 8 votes ) Vote up Vote down Report this comment

Nice, buy a building for less than a dollar a square foot then have the taxpayers pay for your renovations. Only in Buffalo. If the State and City cough up 5.5 million to stabalize this buiding since he obviously can't afford to [which is normally what the owner of a building would do] IT SHOULD BE A LOAN! The fact that no private developer stepped up to the plate with cash in hand for a complete over haul really does prove there is no place in this city for the Statler, big white elephant in the middle of a shrinking City. I smell another Hyatt and Paul Snyder. 3 empty towers for decades with a Croce restaurant on the first floor subsidized for years to come. Smart man this Croce and laughing at us.

Score: -9 ( 33 votes ) Vote up Vote down Report this comment

I am really glad to see this-it's simply too important a building to lose. But, I also agree with Toms....similar to the bail out of the banks, the taxpayers should be set to gain on the upside...if there ever is any.

replied to tomswonderful
Score: 9 ( 13 votes ) Vote up Vote down Report this comment

Does the state or city have a better credit rating than Mr. Croce? :-)

All kidding aside a bond wouldn't be a horrible idea to rehab the building. I'll say it again the Waldorf Astoria was built on a bond. Which is how Conrad Hilton came to own it.

replied to Travelrrr
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"The fact that no private developer stepped up to the plate with cash in hand for a complete over haul really does prove there is no place in this city for the Statler"

It proves that it's economically inviable, yes. Which proves that the rest of your claim - that the state and city shouldn't subsidize - is 100% wrong. Subsidization of projects like this happen in all cities, it's just a fact of how our economy works. It's also the reason why American cities are the successful tax and economic base that fuels the rest of the nation (and world). Don't get hung up looking at this tree - it's all about the forest. The 5mil has implications far beyond what you're considering.

replied to tomswonderful
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Current economic conditions/thinking are not always the best idea. There was a time where numerous buildings were not viable. Shea's, Ellicott Sq, Guaranty, Post Office, I'm sure the list goes on.

Just because at a moment in the City's 200 year history it doesn't work economically is not a reason to tear it down.

But this has all been said before...

replied to jag
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I'm guessing you misread what I said - since I agree with everything you just said. haha

replied to Chris
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Kind of like the airport? And all the hotels that have sprung up around the airport? Oh, I forgot - you don't give a shit about your tax dollars subsidizing hotels in Cheektowaga. But in downtown Buffalo? That's a f**king outrage! Brilliant point. Tell us more about how outrageous it is to use your (OMFG!) tax money for this. Testify. Keep pretending like the government doesn't subsidize things you use.

replied to tomswonderful
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The Buffalo News has written this type of editorial the past 3 owners/potential owners. Byron Brown is right to wait for a detailed plan.

I'm not really sold by lets activate the bottom two floors and organically fix everything. There are basic flaws that make the building not work. Going back to the way it was just doesn't feel like a step forward.

Don't get me wrong I'm supporting the effort it just seems like there is always an innovation deficit.

Score: 1 ( 5 votes ) Vote up Vote down Report this comment

I'm glad that the building probably won't be torn down. But something about the chain of events seem fishy. Why did Croce buy the building if knew he can't even come up with the basic dollars to fix the falling facade? Did he assume from the beginning that NY would be funding it for him? I agree with the previous comment that the money should be given as a loan. If he really needs it as gap financing, that's totally fine. But once the building is profitable it should either be paid back, or NY should get a cut of the profits. If we don't, then why do we need Croce in the picture? We should have had NYS buy the building up front and pay for the renovations. Why pay Croce as a middleman to do the same thing?

Score: 9 ( 9 votes ) Vote up Vote down Report this comment

I agree. There are other more qualified developers to do this and see the project through.

replied to 300miles
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I was thinking the same thing.

The only thing I can come up with is Croce actually wants to keep the hotel rooms in the Statler OFF the market.

He has already invested a bunch of money on his boutique hotel around the corner. If another investor, someone who could pull the project off like Avant, came along and turned the Statler around before he completed his boutique...he would be sunk. At least hurt.

So he spends $500k of his own coin, gets the city to match that and the state to throw in $5M....all to keep the Statler AS IS outside of the first 3 floors.


replied to 300miles
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For a group that routinely takes stabs at the Buffalo News, BRO sure takes alot of their material from the source of their ridicule. Anyone could have a website that simply regurgitates news.

Score: 6 ( 16 votes ) Vote up Vote down Report this comment

thank you, louis tully. .

if bro really thinks that the buffalo news is that lame, then it should pony up for some journalists of its own and stop swiping content from the news.

there is a word for this kind of relationship: parasitical.

replied to LouisTully
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isn't this called Hamisterizing?

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I guess the thumbs down come from people who do not mind or prefer to have their tax money used to subsidize the real estate holdings of the Nuevo Riche. Croce obviously does not have the cash flow to see this through completion, never mind the basic stabilizing of the building. Everything comes in 3's, he is the third owner to be a "Savior" in as many years. Take off the rose colored glasses and see the situation for what it is. I may believe in him a tad more if his 1st hotel project that is a tiny fraction of this size was off the ground, but at the moment it is still an empty building abutting a shovel ready lot. Next time the Statler goes on the auction block have the bidders show a bank statement or a proven track record in large scale re-development. Stick to your successful restaurants Mr.Croce and leave projects like this to those who "can do".

Score: 9 ( 13 votes ) Vote up Vote down Report this comment

Im happy that my tax money is going towards this project, in fact, ill DOUBLE my personal tax contribution towards this project cause I'm baller like that. where do i send my check for 30 cents?

Ill drink one less 12oz coke this year to cover the difference to my pocket book.

$5.5m is cheap

Score: 4 ( 12 votes ) Vote up Vote down Report this comment

5.5 Mill is cheap. Now you try to get 100 dollars out of the city or state to help with your home, laughable. If the State and City are putting up the money, then stabalize and mothball it and wait for a developer that has the money to pay it back in full. Or your way, just hand Croce a check for 5.5 Million dollars which is 7.85 times more than he is paying for it. Why can't he cough up 6.2 million of his own money?

replied to WNY_Nick
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Not sure what you are talking about. You get federal money to help you with you home just by taking out a mortgage. Last year the federal government gave out money to replace your windows. They also gave out a one time $8grand to help out first time home buyers. That is a 4% gift on a 200K house! They also even gave out money to help people buy cars for Christ sake. This whole whoa is me i never get anything attitude in America is annoying.

replied to tomswonderful
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You beat me to it.

replied to STEEL
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I took the window tax credit. I also paid for the windows first. Is he renovating and stabailizing first or taking a handout to start a project he can ill afford?

replied to STEEL
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You don't have to do anything for the mortgage interest credit. It is just free money from the feds. You can run your house into the ground and you still get federal money. You can skip out on your mortgage and they don't ask for the money back

replied to tomswonderful
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You have to take out a mortgage to qualify for the credit. The individual who skips out on his mortgage will be held accountable for his or her actions for years to come. The LLC that is created to take the credit from the company will walk away to create another LLC leaving the taxpayers holding the bill.

replied to STEEL
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What are you even talking about? You take out a mortgage and then the government gives you a subsudy on the interest no questinons asked. If you default on the mortgage the government does not ask for its money back. All these people who complain that the government does not subsidize their house need to shut up.

replied to bobbycat
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Let me spell this out for you in terms that your thick head might understand.

1) You have to have a mortgage to qualify, renters do not qualify.

2) If the mortgage holder defaults it will negatively effect their credit for 10+ years.

3) If the mortgage was held by a LLC that is only in business for the purpose of owning the property, then there will be no negative effect on the LLC owner's credit.

4) The government will not ask for the tax credit back if the mortgage holder defaults.

5) The mortgage tax credit was designed to entice more people into home ownership instead of renting.

6) A repeal of that tax will result in fewer homeowners, more renters, and more landlords. I know this is heavily contested but this can be the deal maker for some homeowners.

7) These landlords will be protected by their LLC and will not have to worry as much about the condition of their property, etc.

8) The mortgage holder must pay tax on the property first, then can request the refund when they file their taxes the following year. They are, in effect, getting a portion of their own money back.

replied to STEEL
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You are not even following the converstation. If you own a house and pay interest you get a government reduction on your taxes. It is a government subsidy! So if you own a house and pay interest don't complain that you don't get subsidies from the government becasue you do. Why is this so hard to understand!?

replied to bobbycat
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That is not true in many cases. I have a mortgage but with low interest rates I do not have enough deductions to itemize. Therefore I am receiving a zero subsidy on my mortgage or home purchase. This may not be the case in your Chicago circle, but it is true for tens of thousand of homeowners in WNY because of our low housing prices.

replied to STEEL
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The mortgage interest deduction is simply welfare for the wealthy. This giveaway costs the treasury 100 billion dollars with over 70% (70 billion) going to the top 20% of taxpayers. Over 70% of taxpayers are not eligible for this entitlement for various reasons. Renters, those with modest mortgage's, or modest incomes are all shut out which discourages people to live within their means.

replied to Sally
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OK so that proves that the feds don't give subsidies to pay for interest costs on home ownership. My God you people are nuts.

replied to Sally
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Saying a reduction in your tax payment is a subsidy is a stretch. Saying that it's a subsidy for the wealthy is comical.

It would be nice for more poor people to own a home, the deduction helps them, end of story.

replied to STEEL
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The deduction does not help "poor people own a home", low income earners cannot take advantage of this subsidy. Only those with larger incomes and large mortgages qualify, the working poor file the standard deduction. Not sure why you would defend giving the top 20% of earners 70 billion dollars a year to subsidize high end homes, let them pay their own way, I am tired of carrying them.

replied to benfranklin
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There are plenty of subsidies available for the working poor, such as a program that is sponsored by the Erie County Department of Environment and Planning to help eligible families become homeowners. It gives money to people with low income to help pay closing costs and down payment, and funding is provided by the US Department of Housing and Urban Development HOME program. To qualify for this government assistance, household gross income must not exceed these income figures:
1 Person – $34,100; 2 Persons – $38,950; 3 Persons – $43,850; 4 Persons – $48,700; 5 Persons – $52,600; 6 Persons – $56,500; 7 Persons – $ 60,400; 8+ Persons – $64,300

Here's a link for anyone who might want to apply:
http://www.buffaloniagararealestatehomesales.com/erie-county-first-time-home-buyer-program/

Also, I know someone who applied for a grant when she bought her first house. The office was on Connecticut Street, but I can't remember the name of the agency. They paid literraly thousands of dollars to assist her with the purchase of her house on Buffalo's West Side, and I know there were income restrictions for her to qualify.

replied to Black Rock Lifer
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Coincidentally, there's an article in the Buffalo News with information about more subsidy for the poor, assistance to help the less fortunate become homeowners.

Here it is:

Low-income homeowners in need of weatherization assistance may get some help as part of a$2.1 million program announced Monday by Attorney General Andrew M. Cuomo.

Cuomo, who also is New York’s governor- elect, said the “Buffalo Green and Healthy Home Initiative” is designed to help needy families with weatherization improvements such as new energy-efficient furnaces and windows.

The program is being funded with money that Cuomo helped secure from a 2007 court-ordered settlement with American Electric Power over federal Clean Air Act violations.

http://www.buffalonews.com/city/article254743.ece

If you're a middle class homeowner, however, you're on your own, aside from the additional money that may be in your income tax return due to the mortgage-interest deduction.

replied to NBuffguy
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I agree. I can't imagine my "tax contribution" adding up to more than $.50 and if that means saving this building so be it. There are plenty of worse ways to use tax money. as for the window tax credit, every year I "replace" my windows and furnace. I sure hope I don't get audited! I do think the public money should be more of a loan than free money.

replied to STEEL
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don't worry the federal govertnment willget that all back plus billions more starting next year when the real eastate killing federal sales tax of 3.8% of every, EVERY real estate transaction takes place.

replied to STEEL
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replied to Sally
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That is pretty interesting. It is annoying how people just make up complete lies to make their point and try to sell their argument. How can you believe in a point of view so strongly if you have to make up crap to support it

replied to bradman
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I cant speak for the state and city but the federal government assists me by providing the artificially cheap credit, tax incentives, and financing mechanism needed to purchase my home.
Without these subsidies homeownership wouldn't be possible for most people.

This isn't a perfect situation and it would be nice if somebody with more experience swooped in and paid for this out of their own pocket. Unfortunately that isn't happening. At least Croce has a track record with smaller projects and has a vested interest in the community. He would be less likely to do Central Terminal style poaching of fixtures than someone from out of town.

Personally, I feel better knowing my tax dollars are being invested in a community asset and not going into the pockets of a demolition contractor.

replied to tomswonderful
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As an ArtVoice article said this week…we are a culture of Subsidies. Look at the big 3 developers in Buffalo and you can see it. They have the funding to buy the big buildings for a fraction of their worth and then they sit on them until State, County and Local funding gets offered to fix it up. Or they won’t move on them until funding is given to them. The Lafayette Hotel, the Statler, the Greystone by Johnson Park, the Nursing Home on Symphony Circle to name a few, are just sitting there. Why, because the developers need government funding to do the projects. They need laws changed. They need public sentiment to swing in their direction. An eyesore in your neighborhood swings sentiment in their direction quickly.

Whites Livery is costing what? 3.4 million to renovate? Free “no strings” funds amount to 2.1 million. It’s a GREAT thing!!! They are saving the front façade and an elevator shaft. Reading The State Division of Housing and Community Renewal press release it states that the Livery “will provide 14 units for people with physical disabilities or traumatic brain injuries.” I guess what ever it takes to sell the project!

Yes it is great to save the Statler. If we have to spend the money to stabilize the building then do it and lease the lower floors to businesses (how about the ones that got kicked out)? Set up a trust to take care of the building and hire a management company to run it. Don't just give taxpayer money away.

Stop giving out taxpayer money to wealthy developers and corporations. All these tax breaks and grants are putting me in the poor house. I have no money to repair my home and someday it will be torn down, on the bright side the neighborhood could use the parking. End this subsidy culture. If you can’t do it with your money don’t do it with mine!!!

Score: 8 ( 14 votes ) Vote up Vote down Report this comment

Government assistance is commonplace for development so I'm not sure why the Statler is being singled out for all the anti subsidy rage.
They come in various forms: historic preservation incentives, infrastructure to spread development to the far reaches of the region, and mortgage subsidies to make it possible for people like Allentownguy to purchase a home.

If you guys want the "subsidy culture" to end, you ought to be willing to forfeit public assistance that you receive and or benefit from.

Score: 2 ( 8 votes ) Vote up Vote down Report this comment

Mortgage subsidy? Are you referring to the income tax deduction? Which is currently on the chopping block to possibly end. If not please explain. I don't remember getting two thirds of the cost of my home given to me by the government. I have not received a grant or anything else other than the tax deduction that is given to all homeowners not just one individual.

I really wouldn't mind for public assistance to end. If in fact you mean the grants that are given to the little pet projects of elected officials. If we didn't tax all this money away from people and give it back in "public assistance" I think we would be better off. I certainly would have more money in my pocket and be able to do the work I need to get done on my house.

Yes certain things need to be done for the "whole" by government such as police and fire protection, infrastructure etc. My problem is when money is given to individuals and companies that reap a profit in the end from government assistance.

replied to The Kettle
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The tax credits as well as Fannie Mae and Freddie Mac which make 30 year amortized mortgages profitable and possible. Not many of us could own homes if the government didn't subsidize homeownership. These and other government subsidy programs are in place because they encourage behavior that provides some benefit to society.

Yes a handful of people make a profit but the public also benefits by keeping a valuable structure as well as steering development downtown. That isn't any different from people profiting from the government services you listed above.

You don't want to see developers profit from government enhanced rehabs but does that mean you wouldn't want to see private road contractors or manufacturers of police cars and firetrucks make profits as well?

replied to Allentwnguy
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Fannie Mae and Freddie Mac which make 30 year amortized mortgages profitable and possible??? Profitable to the investors that own the stock in the company. They don't subsidize my mortgage. I'll pay 128,000 in interest for the 111,000 I borrowed to buy my house. That is hardly subsidized. Fannie and Freddie sucuritize and guarantee mortgages they don't subsidize them.

Roads are owned by the government (supposedly us), as are police cars and they benefit the people. While an up and running Statler would benefit the area it would still be owned by an individual or LLC. There is a difference. Well at least in my mind!

replied to The Kettle
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Allentownguy> "Fannie Mae and Freddie Mac which make 30 year amortized mortgages profitable and possible???"

That seems to be the case. Here is a good read on the subject from the NY Times.

http://www.nytimes.com/2010/04/25/magazine/25fob-wwln-t.html?_r=1

"The Treasury secretary is bedeviled over what to do with Fannie Mae and Freddie Mac, the bailed-out mortgage giants that have cost the taxpayers upward of $125 billion with as yet no end in sight. Shutting them down is not so easy because — get ready for this — since their bailout, in September 2008, Fannie and Freddie have become more, not less, important to the U.S. housing market.

At present, 9 of every 10 new mortgages are sold to, or guaranteed by, arms of the U.S. government, the majority of them to Fannie and Freddie. Which is to say, without Uncle Sam, it is not clear that the private market for housing would even exist."

....

"Fannie and Freddie developed as tools of credit enhancement; direct handouts offended laissez-faire sensibilities, whereas loan guarantees were nearly invisible. The practice of disguising government aid dates to the rescue of farmers and homeowners during the Depression. Mortgage capital barely existed and so, in 1934, the New Deal chartered the Federal Housing Administration to stimulate mortgage lending. "

replied to Allentwnguy
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You have to see this through the liberal's logic. If you benefit from any government services that are taxpayer funded, then you cannot complain about any other services that are taxpayer funded. If you benefit from roads, you must agree with socialism because the roads are maintained by the government. If you receive a 'subsidy" on your house, then you cannot complain about any other subsidies because that would make you a hypicrit. There is nothing in between.

This is how liberal logic works.

replied to Allentwnguy
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compared with the conservative;s logic: if it benefits me, it isn't a subsidy. if it benefits you, it is a subsidy.

replied to bobbycat
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Learn to spell, weenie-bag.

replied to bobbycat
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The plan is not to eliminate the mortgage interest deduction completely. Instead of being available for homes purchased up to 1 millon dollars it would be reduced to homes purchased up to 500k dollars.

The fed gov't doesn't like to give citizens deductions/credits for personal expenses so be happy we get what we get.

replied to Allentwnguy
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They let you sign in with the old name?! Hooray the mailman is back.

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Where is Dan Snyder in all of this? He was up in arms about the Seneca's opening a hotel a mile or so from his heavily subsidized Hyatt. What are his thoughts on Croce re-opening the Statler?

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Dan is in Washington, Paul is in Buffalo.

replied to bobbycat
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Finally, a voice or reason prevails in the “anal” halls of Buffalo – I have been an advocate of renovation in stages as time and money allows, as this is a good, sound, economic approach!

For years, I have echoed renovating each pavilion of the Richardson Complex as time and money allows, as Richardson’s design is ideally suited for renovation in stages; little did I know it would be utilized at the Statler.

Incidentally, I like the water-coloring affect of the renderings contrary to the art critics blogging on the topic.

Score: 0 ( 2 votes ) Vote up Vote down Report this comment

I agree that this would be a great Urban fabric lose to the city, but the Statler is a white elephant as it stands. I have not heard a proposal yet that would be the greatest and best use of this building/parcel.

In general these are all half hearted attempts to guarantee a future of this corner of Delaware Ave. There is no will to propose a viable reuse because no single entity wants to go broke. I have heard some estimates that it would take $50 M to do a core and shell stabalization! (that is building envelope and mechanical, electrical, plumbing modernization) What then? Who is going to foot the rest of the bill for renovation costs for an urban core building that has no dedicated parking? Not foreign money, not the government, and not local developers. There needs to be a more rigorous study of potential market use with project costs. Until then it is just throwing good money after, well nothing.

Also the "Rudinicked" rendering also seems to indicate that the Olympic Towers would be demo-ed too. I am sure it is a mistake, but come on man!

Score: 5 ( 7 votes ) Vote up Vote down Report this comment

Thankyou, good comment. Bottom line is, if Croce can't afford to stabalize the building, where in the heck is the other 95 million coming from.

replied to Arch
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If you want to buy a house, but can't afford the upfront closing costs - does that, necessarily, mean that you can't afford the monthly payments on the mortgage?

replied to tomswonderful
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Generally speaking the answer is yes.

replied to townline
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Food, shelter, and clothing should not be for profit enterprises that exclude the majority of citizens. The current system rewards the few at the expense of the many. The top 5% walk away with huge profits made from the hard work of the bottom 25%.

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Sorry but the bottom 25% are on welfare and do not work at all.

replied to Peter_Parkdale
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link please

replied to Sally
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Statler HOTEL ... hm, what could we possibly use it for?
Like the grain ELEVATORS ... hm, what could we possibly use them for?

Hey! How about turning the Statler into Grain Elevators?

Would somebody with a real, workable idea (i.e. not one that would be paid for wishfully by somebody else), please stand up!

Score: 1 ( 1 votes ) Vote up Vote down Report this comment

The loss of the Statler would be a huge hit to the urban fabric of the city. But as Buffalo's population declines, it makes sense that the size of its downtown would decline as well. Fewer large buildings are needed when fewer people live and work there. A smaller skyline would simply reflect the reality that Buffalo is becoming a smaller city.

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Funny how you guys never complain about the endless subsidized expansion in the suburbs

replied to NBuffguy
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Looks like Sparky pulled out his one note bugle again.

replied to STEEL
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How much smaller of a skyline can you have? Buffalo already has zero skyline.

replied to NBuffguy
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wow Nbuffguy... I can agree that we may have to cope with realities that our downtown area might have to get smaller but I think the areas that are on the outskirts and not as desirable like south/east industrial builidings and whatnot should be the targets here.

losing an original building from the hub circle of our radial street plan is simply unacceptable. Especially one with as much history and promise as the statler.

In the 1970s and 1980s the city's future looked beyond bleak. Today is an entirely different story. Just take a look at all the exiting downtown projects completed and successful in the past 5 years to see that now is NOT the time to be demoing some of our largest / most impressive downtown built environment...

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I have a hard time stomaching the fact that we have to start hearing from Palamess again, who outright slams Croce for "subsidies". Paladino is almost pathological with his denial and double standards. Give 'em hell right back, Mark!!

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I am not in favor of giving these guys any money. They have no design or plan for the building. If they had a Business Plan that we could all observe and it showed a future for the building I would think there would be a chance. But they are asking for 5.5 million in taxpayer money to stabilize the building and then what? Another 85 million to do what with it?? Tear it down. All cities have "treasures" but sooner or later those "treasures" become an expensive emptiness that goes into terrible disrepair. If it was such a "treasure" why haven't people like Benderson or Paladino gone after it? Think with your heads people. Not just your hearts.

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