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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68 comments
Brian
Brian

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.

Pat
Pat

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.

Travelrrr
Travelrrr

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!!

georged
georged

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

NBuffguy
NBuffguy

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.

jim1234664
jim1234664

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...

Sally
Sally

Looks like Sparky pulled out his one note bugle again.

NBuffguy
NBuffguy

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.

STEEL
STEEL

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

STEEL
STEEL

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

STEEL
STEEL

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.

Black Rock Lifer
Black Rock Lifer

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.

benfranklin
benfranklin

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.

benfranklin
benfranklin

Dan is in Washington, Paul is in Buffalo.

Black Rock Lifer
Black Rock Lifer

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.

NBuffguy
NBuffguy

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.

Sally
Sally

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

Sally
Sally

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.

Sally
Sally

Generally speaking the answer is yes.

Buffalo Ashes
Buffalo Ashes

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!

Peter_Parkdale
Peter_Parkdale

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%.

STEEL
STEEL

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!?

townline
townline

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?

grad94
grad94

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

Sally
Sally

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.

bobbycat
bobbycat

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.

bobbycat
bobbycat

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.

The Kettle
The Kettle

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. "

tomswonderful
tomswonderful

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.

STEEL
STEEL

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.

Allentwnguy
Allentwnguy

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!

Arch
Arch

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!

bobbycat
bobbycat

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.

Buffalo_Resurrection
Buffalo_Resurrection

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.

reflip
reflip

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.

STEEL
STEEL

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

bobbycat
bobbycat

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?

jag
jag

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

Chris
Chris

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...

brownteeth
brownteeth

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.

The Kettle
The Kettle

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?

Allentwnguy
Allentwnguy

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.

tomswonderful
tomswonderful

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?

grad94
grad94

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.

The Kettle
The Kettle

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

The Kettle
The Kettle

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.

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