Croce Decides to Move Forward with Statler Purchase

Despite not having lined up public sector assistance to stabilize the Statler, Mark Croce is moving forward with purchasing the landmark building.  If the City Council and Erie County Legislature approve waivers against the estate, Croce could own the building as soon as March.  Croce has decided against a proposal that would have seen the City take title to the property and designate his Statler City LLC as preferred developer. 

“This is a significant step forward,” Croce said after a Thursday bankruptcy court hearing.  “We’ll continue fighting for money to stabilize the building.  We want to get moving on this.”

Statler City is working with the City and other parties to waive claims against the estate that have been piling up since the property was pushed into bankruptcy one year ago.  Those costs include city and county taxes, fees, penalties, water and sewer charges, interest and administrative claims.  The City and County are being asked to waive penalties and interest on the back real property taxes.  Constitutional limitations prevent the relieving of property tax liens.  Statler City will be paying back taxes as part of its purchase agreement.   

DSC_s0744.jpg“Once the City Council and Erie County Legislature sign-off on the waivers, we’ll schedule a closing for 30 days,” said Croce.  Without the waivers, the purchase agreement is in jeopardy and the bankruptcy court trustee could move to abandon the building.

Statler City’s plan includes:

  • 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.

Croce wants to have the protective fencing removed and the building’s lower floors ready to host events associated with the National Trust for Historic Preservation conference in October. 

“I’m optimistic,” he says.  “There’s still a lot of work to do.”

About the author  ⁄ WCPerspective

Buffalo and development junkie currently exiled in California.

18 comments
jbeatty
jbeatty

What amazes me about the Statler is the pricetag, It's only $700,000. That won't even buy you a Brownstone in Harlem! I admit I've never set foot into the building I have no idea what kind of condition its in. But I'll bet its pretty close to collapsing for that price. I hope Mr. Croce does something with it other than turn it into another one of his parking lots.

littleacorn
littleacorn

Sitting on the Buffalo Fiscal Stability Control Board (BFSA) is Alair Townsend, who is an editor for Crains Business Weekly in New York City. She should be asking some tough questions about the pragmatism of this deal. This article I listed is from her NY paper. In NYC a private equity company used a lot of public money to purchase the Met Life apartments, just as all the developers are asking in Buffalo. Is this the perfect analogy probably not but when developers ask for "public welfare" it is because they see risk.

Tishman Speyer and morality in real estate

By GREG DAVID on October 12, 2010 11:22 AM | Share | Comments (16) | TrackBacks (0)

Later this month, finally, the lenders are slated to foreclose on Stuyvesant Town/Peter Cooper Village, ending the saga of Tishman Speyer's reckless purchase of the iconic housing complex. It's an appropriate time to examine Tishman's Speyer's actions in terms of morality, or if you don't like that word, substitute "ethics." Or if that is still too pejorative, we could try "responsibility."

In 2006, amid a frenzy in the housing market, Tishman won the contest for the two complexes by bidding $5.4 billion, hundreds of millions more dollars than many other bidders were willing to pay. (Two rivals were willing to go as high as Tishman). With lenders lining up to throw money at the deal, Tishman itself put in only $116 million, as did equity partner BlackRock.

When Tishman couldn't raise rents high enough and its reserve fund became exhausted, it tried to negotiate a deal with lenders to restructure the burdensome debt. Tishman walked away when that deal was not advantageous enough to Tishman.

The key here is that Tishman had the resources to put more money into the deal, but it chose not to because there would be no payoff in the future.

This is exactly the same situation faced many Americans who are "under water" in their home loans. Their mortgages are now much larger than the value of their homes today, and probably will be for years to come. These homeowners, like Tishman, have the financial resources to meet their mortgage payments and other obligations. But doing so will not result in a profit.

These homeowners are frequently lectured--especially by the banks that hold their mortgages--that they have a moral obligation to fulfill the commitments in their contracts. They are also told that if large numbers of them walk away from their homes, the housing market will plunge again, and the economy will suffer greatly. I guess that is an appeal to their patriotism. And if they decide to walk away, officials threaten, their credit will be damaged and they can forget about buying another home anytime soon.

I can't find anyone who says the same thing about Tishman. As far as I can tell, Tishman's reputation remains intact and it can still get money to finance new deals. I wonder if any of the banks telling homeowners to fulfill their obligations do business with Tishman. Probably.

I have been a business journalist long enough to know that Tishman's actions are standard for the way high finance works.

But the anger sweeping America about "Wall Street" is based on the belief that the game is rigged against the average American and that there is a double standard for the average consumer and the big guys in New York. Tishman Speyer proves that assumption is correct. And that isn't good for Wall Street, the country or even the average consumer.

On Tuesday, the foreclosure date for Stuyvesant Town/Peter Cooper Village was pushed back to Oct. 22, from this week. This entry has been updated to reflect the new date.

littleacorn
littleacorn

Sitting on the Buffalo Fiscal Stability Control Board (BFSA) is Alair Townsend, who is an editor for Crains Business Weekly in New York City. She should be asking some tough questions about the pragmatism of this deal. This article I listed is from her NY paper. In NYC a private equity company used a lot of public money to purchase the Met Life apartments, just as all the developers are asking in Buffalo. Is this the perfect analogy probably not but when developers ask for "public welfare" it is because they see risk.

Tishman Speyer and morality in real estate

By GREG DAVID on October 12, 2010 11:22 AM | Share | Comments (16) | TrackBacks (0)

Later this month, finally, the lenders are slated to foreclose on Stuyvesant Town/Peter Cooper Village, ending the saga of Tishman Speyer's reckless purchase of the iconic housing complex. It's an appropriate time to examine Tishman's Speyer's actions in terms of morality, or if you don't like that word, substitute "ethics." Or if that is still too pejorative, we could try "responsibility."

In 2006, amid a frenzy in the housing market, Tishman won the contest for the two complexes by bidding $5.4 billion, hundreds of millions more dollars than many other bidders were willing to pay. (Two rivals were willing to go as high as Tishman). With lenders lining up to throw money at the deal, Tishman itself put in only $116 million, as did equity partner BlackRock.

When Tishman couldn't raise rents high enough and its reserve fund became exhausted, it tried to negotiate a deal with lenders to restructure the burdensome debt. Tishman walked away when that deal was not advantageous enough to Tishman.

The key here is that Tishman had the resources to put more money into the deal, but it chose not to because there would be no payoff in the future.

This is exactly the same situation faced many Americans who are "under water" in their home loans. Their mortgages are now much larger than the value of their homes today, and probably will be for years to come. These homeowners, like Tishman, have the financial resources to meet their mortgage payments and other obligations. But doing so will not result in a profit.

These homeowners are frequently lectured--especially by the banks that hold their mortgages--that they have a moral obligation to fulfill the commitments in their contracts. They are also told that if large numbers of them walk away from their homes, the housing market will plunge again, and the economy will suffer greatly. I guess that is an appeal to their patriotism. And if they decide to walk away, officials threaten, their credit will be damaged and they can forget about buying another home anytime soon.

I can't find anyone who says the same thing about Tishman. As far as I can tell, Tishman's reputation remains intact and it can still get money to finance new deals. I wonder if any of the banks telling homeowners to fulfill their obligations do business with Tishman. Probably.

I have been a business journalist long enough to know that Tishman's actions are standard for the way high finance works.

But the anger sweeping America about "Wall Street" is based on the belief that the game is rigged against the average American and that there is a double standard for the average consumer and the big guys in New York. Tishman Speyer proves that assumption is correct. And that isn't good for Wall Street, the country or even the average consumer.

On Tuesday, the foreclosure date for Stuyvesant Town/Peter Cooper Village was pushed back to Oct. 22, from this week. This entry has been updated to reflect the new date.

benfranklin
benfranklin

Would be interesting to know if this is a real change in thinking on Croce's part, or if he just wanted to get past the heating season. Even on a small project, I'd push it to March.

bobbycat
bobbycat

Does this take UB off the hook for moving their Law School downtown?

bobbycat
bobbycat

I can't wait for it to reopen. I hope the banquet hall is open for my 25th wedding anniversary.

Sally
Sally

Great news, good deal for Croce. For a couple hundred thousand dollars he gets a banquet facility that had extensive work done over the past 5 years and does not have to do anything with the rest of the building except get the City to pay for fixing it up so it doesn't deteriorate.

Still far better than keeping it boarded up. But i still wonder where all the bloggers that said the new court house would make the Statle so valuable are. If they were correct there would have been a line of potential buyers for this property.

Chris
Chris

The building will be stabalized and the ground floors reactivated.

Nothing will be determined until HSBC decides what to do.

Maybe they can talk the new UB President into moving the law school downtown....

I doubt Croce will be the developer when it is all said and done. Hopefully in the end the city gets back their investment and Croce makes a buck or two for his troubles.

Buffalo All Star
Buffalo All Star

I don't know what I am more sick of hearing about.. Mo Hassan or the statler.

Has Croce given any reason what so ever that he is able to pull this off? As we see with his numerous large scale development's he has already finished? Still waiting on your revolutionary parking garage and your boutique hotel don't forget your theater district holdings that you said we developable as well.

Put up or shut up man, he definately won't be able to sit on this one like the rest.

Slobadan Melosivic
Slobadan Melosivic

" This statler needs to be boarded up, wait for a real developer who has rehabbed a comprable project, and be patient until the market straightens out after HSBC decides to stay in the Tower."

If we do this, than i hope its bricks fall on you while it deteriotes

you'll die waiting in this city's economy - i dont think u understand how desparate this city really is...

look at Issa (private development savior we waited for), all he did was put the building back 4 yrs

much worse than a teenage girl - even more desparate than someone who refers to themselves as cookiemonster

cookiemonster
cookiemonster

You are all responding like fans cheering for a team rather than business people. Once again you are acting like that annoying desperate girl that seeks attention. I would tell her to get on the treadmill for a few months, get a make-over, get a new wardrobe and then try online dating sites. This statler needs to be boarded up, wait for a real developer who has rehabbed a comprable project, and be patient until the market straightens out after HSBC decides to stay in the Tower. See if 5 million was all it is going to take to assist the statler for a FULL redevelopment I would be all in to. There will be a time for another developer to actually puchase the statler and do a full mixed use development. Be warned...this will turn out to be a big money grab in the end where you will all be disappointed. There are already too many built in excuses, and Croce will not go broke fixing this thing up. You the tax payers will take the risk to fund his restaurant in a huge building. PATHETIC And those of you that say no one else wants it, business first reported:

Albany developer Uri Kaufman, who first looked at the building two years ago.“He continued to show interest, even as late as this morning,” said Morris Horwitz, the court-appointed trustee.

Read more: Croce poised to take control of Statler | Business First

Travelrrr
Travelrrr

oh cookiepuss: you really are a downer. The fact is, no one, given repeated opportunity, has stepped up to the plate to do ANYTHING with this building. So I, like many, many others, am banding behind Mark to support him in any way possible. The restoration of this building, which will benefit the ENTIRE community, has to be a community effort.

I would invest in the building, if given the opportunity.

Slobadan Melosivic
Slobadan Melosivic

cookiemonster - more like the bunsiness monster

you're just pissed because u dont have the jack to get this ball rolling

here's the other places tax money goes to (that people dont seem as opposed to):

1. dead people insurance policies

2. leonard stokes

3. money laundering fronts for the mayor also referred to as east side barbers and sold food places

4. police officers, teachers and firefights who live in the suburbs

and you're telling me you're pissed because a guy who has rehabbed and saved a number of landmarks wants to get some help saving a mammouth of a building?

people like u are the reason this city is a joke - move to the south and make Buffalo a better place!!

Platt4
Platt4

I for one would be happy to see tax dollars go towards saving this landmark. Kudos to Croce for taking it on with a realistic plan. BJP has it right- there wasn't a line of prospective developers eyeing the building. Everyone had a fair shake- Croce is the only one that stepped. It's been vacant a year, how much longer should we wait? Until it falls onto Delaware Avenue?

LI2Northpark
LI2Northpark

I can only assume that most large scale developers start out as small scale developers. He wants to buy it, let him buy it. No one else is going to touch it, especially after it sits there for another ten years.

KangDangaLang
KangDangaLang

Yes lets hold annnnnother auction because the first three drew so many bidders. And yes lets waaaaait another 15-20 years while this building decays even more. Something going on there is better than nothing.

cookiemonster
cookiemonster

This has SCAM written all over it. This building is beautiful but it is a money pit that can eat up 5.3 million dollars like a black hole. Croce will end up padding his pockets and we will be in the same situation in two years. He runs restaurants not large buildings that need a 100 plus million in work to make them feasable for business or residents in 2011. This is a huge mistake and even Mayor Brown is hesitent to drink the kool aid on this one. He knows when this fails in two years it can cripple his political aspirations all for a desperate attempt to use corporate welfare. As much as we all want to see the Statler revived, Croce is not a large scale developer, the current market conditions dont create the demand, and putting a banquet facitity on the first two floors is like putting a band aid on a bullet hole. I am sure their are some dreamers out there like travelrrr who thinks the government should just give money to these political whores but the truth is this has built in EXCUSES for FAILURE written all over it. WNY tax payers, open your eyes we are basically getting mugged while everyone is standing around watching. Termini has the knowledge and the wherewithall to do this but paladino had the right idea to board it up and wait out the storm. Sometimes when your desperate, going with the first girl that talks to you doesn't always go so good, Buffalo don't get bamboozeled by this one! Why not give this Uri from Albany a fair shake, or anyone who has done this before. Open this bid up again, exhaust all privately financed options first, and don't rush in to this. The common council is just looking forward to signing this public check so they can recieve their free steak and drinks at Croces Buffalo Chop House. Believe me Croce will not lose money on this deal but we the tax payers will!

© 2014 Hyperlocal Media. All Rights Reserved.
plant phytoceramide pills buy phytoceramide supplements phytoceramide dosage life extension phytoceramides