It may seem like forever ago, however the Statler has come a very long way in a short period of time. While the upper floors remain vacant, “drywall-ready” and poised for redevelopment, this grand historic building is still standing, which is a victory in itself since the building was threatened with demolition just five short years ago. Owner and developer Mark D. Croce, President of Statler City, LLC laid out a plan for saving and reusing the property and has carried out the plan to a tee. Work continues on the building’s lower three levels and exterior repairs currently underway will lay the groundwork for reuse of the building’s sixteen upper floors. The path to saving the historic Statler Hotel was full of drama as recapped below.
After Bashar Issa’s grand plans to redevelop the Statler failed and the property ownership was forced into involuntary bankruptcy, a Trustee was appointed in April 2009 and spent twenty months trying to sell the property. Bill Koessler was the successful bidder at an August 2009 public auction but could not complete the purchase on the terms and price that he bid. The Trustee, Morris L. Horwitz, used Koessler’s forfeited deposits to cover bare bones operating expenses of the building which included winterization and the eventual shut down and boarding up of the building. All remaining tenants were eventually evicted and the building was closed and boarded up in February 2010.
Horwitz continued to market the property in early 2010. Mark Croce, initially working with friend and local businessman James Eagan under the Statler City, LLC name signed a purchase agreement for the building in July 2010 being the only qualified entity to submit a bona-fide purchase offer. While working to close a deal with Statler City, the Trustee requested an alternative order from the bankruptcy court authorizing abandonment of the property if the transaction did not close as a result of the expiration of the due diligence period. Under bankruptcy rules, the terms of sale were put to public auction to see if anyone else was prepared to make a higher or better offer. No one else came forward and offered anything more. It bears repeating, there were no other qualified local or out of town bidders for the property. In August 2010, the U.S. Bankruptcy Court accepted Statler City, LLC’s bid.
The due diligence period was originally scheduled to expire on November 15, 2010. It had been extended three times as Croce and Eagan sought public funding to assist in stabilizing the long neglected exterior of the building, a much cheaper alternative than a publicly-funded demolition which was pegged to be in the $20 million dollar price range.
While the City and State were interested in seeing the building saved, neither would commit any public funding to the project. Croce developed a thoughtful and methodical plan to save and reuse the building and Eagan decided to gracefully bow out of closing on the acquisition.
Croce proceeded to lay out his plan for the property in January 2011. It called for a phased reuse of the building, starting with shoring up the exterior, replacing seven lower level roof areas, rebuilding the exterior parapet wall facing the Buffalo-Niagara Convention Center, remodeling and re-opening the lower three public levels, and designing a market-driven reuse for the upper floors. From this 2011 post:
• Public funding to secure the exterior, repair the roofs and right size the utilities. The work, estimated to cost $5.3 million, will prevent further deterioration.
• Renovation of the lower floors and mezzanine for banquet, restaurant and retail uses. That would bring cash flow that can be used to pay the operating expenses of the building pending more extensive future development. Statler City expects to invest $2 to $3 million on lower floor redevelopment.
• Allow reuse of the upper floors as market conditions allow. A mix of hotel rooms, rental units and condos are likely.
• As part of a longer-term revitalization, connect the building to the Buffalo-Niagara Convention Center either physically or operationally.
Statler City, LLC acquired the building on March 15, 2011 and immediately began building stabilization and lower level interior renovations. In August 2011, Mayor Byron Brown recommended the use of State funding to assist with the building’s extensive exterior repairs. The $5.3 million would be taken from a $15 million discretionary allocation granted to the City that was earmarked for significant economic development projects. The grand lobby and ballrooms were reopened to the public amid much fanfare on December 31, 2011 with a New Year’s Eve Gala.
Croce says the demand for special event space in Statler City has been extremely strong since its reopening. The building oftentimes hosts three or more simultaneous wedding receptions on Friday and Saturday nights and employs upwards of 150 people during peak periods. This past weekend the entire complex was reserved for the highly coveted Vanessa Williams wedding which has achieved international attention and eyes on Buffalo.
To date, Croce has invested over $7 million of his own funds into the building and property including installing brand new roofs, mechanical systems, extensively renovated ballrooms and meeting rooms, a brand new Lobby Bar, two full use commercial kitchens, along with many specialty fixtures and furnishings. That is more than double what Croce originally estimated to invest for the lower level work, all on his own dime.
The State/City funding is slated to assist with exterior masonry restoration and stabilization work that started last August. The project involves interior and exterior renovations including the high roof replacement, masonry restoration and stabilization, interior demolition and reconstruction, entrance, canopy and marquis restoration, storefront and façade reconstruction and related soft costs. Croce must complete and pay for the exterior work and then apply for reimbursement in three separate draws as the project progresses and the work is completed and properly documented.
The first phase of the work has already been completed and Croce is waiting on the first draw from the funding before continuing on the exterior restoration. Remaining work includes the entryway and canopy restoration that will go a long way in improving the exterior look and curb appeal of the building. Two-thirds of the sidewalk scaffolding that surrounded the building has already been removed after the work that Mark has already completed to date. The exterior work will make the 850,000 sq.ft. building much more viable and marketable.
When the first draw check is received, more than four years after the property was purchased by Croce, it will be the first public dollars put into the Statler project. Many people are of the belief that the funding has already gone into the project which absolutely untrue to this date.
Croce is not done with his work on the lower levels. There is retail and restaurant space planned for the ground floor and property perimeter spaces that will be marketable once the exterior storefront repairs are completed. He is also replacing all of the old chandeliers (non original) in the building; over 50 of them. Croce is working closely with Philadelphia-based Elegant Lighting on the $500,000 capital project.
“The existing chandeliers are not original to the building,” says Croce. “They were added when the building was purchased and remodeled by Hilton Hotels. The old lighting fixtures have old crystals and are not worth saving and restoring. Many have parts that are no longer available for repair. The decision was made to purchase and install lighting that would have been more in keeping with Ellsworth Statler’s original vision. The interior is going to sparkle big when the new lighting goes in.”
Croce is taking a measured approach to the building’s upper floors. He says that if the building is renovated all at once, the 850,000 sq.ft. of space, even if a mix of office, hotel and/or residential space, would be more than the downtown market could absorb all in one phase. He is considering one or more development partners for the upper floors of the building.
“I am actively talking to potential parties including a team from Rochester and also from Texas,” says Croce. “I’m looking for the right fit and the right team. It will take vision and it will take money, serious money. I never claimed to be the $100 million angel to fully restore and fill the building. But then again, no other local developers stepped up to save this most significant building. Seneca One tower will face the same issues when it is sold.”
“I put out a plan to save this building and I did exactly what I said I would do,” says Croce. “The Statler is alive and saved.”