Agreement Reached on Statler Sale

Bashar Issa appears to be officially checking out of Buffalo. A deal was penned yesterday to unload the Statler to a partnership headed by Toronto businessman Howard Hurst and Erie, Pennsylvania-based hotelier Scott Enterprises. Issa’s BSC Development purchased the 18-story Niagara Square landmark in August 2006 for $3.5 million and proposed turning the circa-1923 giant into a mix of hotel, office and residential space at a cost of over $60 million. The Manchester-based developer swept into town with big plans but was only able to complete elevator repairs and lobby improvements at a reported cost of $6 to $8 million.
In March, BSC became involved with a dispute with Laborers Local 210 over wage rates at the project and work on the project ceased in April after failing to secure a construction loan. Recently, Issa was in talks with Wyndham Hotels to operate a 346 room hotel in the property while trying to secure $20 million in historical tax credits to carry out the renovation work.
BSC Development has been facing financial difficulties and severe cashflow problems in Buffalo and in England. Issa sold the site of his proposed CityTower project at 85 W. Mohawk Street for $2.1 million to Mark Croce’s Elmo Development LLC on July 17.
The new owners are reportedly planning to renovate the property while returning hotel rooms to much of the building, its original purpose. Plans are also said to include three floors of office space, retail, and residential units 'supported by the hotel.' The sale is expected to close before the end of the month.

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heathersmiles
Surprise, Surprise, Surprise
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KenS
Throw Issa onto the the scrap heap right alongside the last Buffalo savior, the great genome king Jeffrey Skolnick.
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BuffaloBloviator
No harm, no foul.
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BuffaloBloviator
Bashar was a colorful figure in Buffalo. We wish our friend the best in his future endeavors.
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UrbanGuy
I'm sorry heathersmiles what have you done to try and improve the region's economic state? i missed the article about your attempts to revive downtown landmarks infusing millions of dollars of your own money and ruining yourself financially in order to try and spruce up a rust belt city. yeah people were skeptical about his project and sure those people may have been right, but do you feel better with the obligatory "i told you so"? all that does is deepen people's perceptions about the development of the area.
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thinker
Thank organized crime, I mean organized labor, for stalling the project. As long as this remains a union-town, we will continue to wallow in our own feces and die a slow death. When a project has to not only use only unionized labor (see: higher costs, shoddier work, higher prices for tenants for substandard space), but has to actually bring organized labor on as a financial partner (as this story fails to point out since BRO and many are pro-union), that's a sad statement about the viability of this region longterm.
When you can't set the price you want to pay for your project because of organized labor and their corruption, extortion and political connections in city hall and the building department, that's not a free market. That's called DEATH OF A CITY.
24% union in WNY, 8% in the rest of the country. Stagnant growth and population decline in WNY, growth in the majority of the rest of the country.
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nyc
thinker - do you have a source that compares construction costs in Buffalo vs other areas of the country to support your claim that unions drive costs up in Buffalo. For an equal building in Buffalo vs Charlotte, what is the difference? Just looking for verifiable facts.. I don't have a strong position on the issue of union vs non-union labor.
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Colin
"When you can't set the price you want to pay for your project . . . that's not a free market."
This is nonsense. A free market doesn't deliver the prices you want. It delivers the prices you can get.
The idea that this project was derailed by the labor market in Buffalo is greatly weakened by the fact that everything Issa touches tends to turn to crap. Everything we've heard about his work at the Statler -- like expecting workers to remove asbestos for less than a living wage -- indicates that this project was never very serious. That, or he is simply a dilettante playing with his father's money.
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heathersmiles
Excellent Ad Hominem deflection Urbanboy!
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Joshua
Buffalo is still ahead of the game - the Statler in Detroit was torn down.
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Andrew
As long as the group that bought the Statler plans on putting some money into it I dont see a real loss here. I would like to point out that this had nothing to do with Buffalo economics. This guy just got in way over his head and owed everyone and their brother money.
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NewBuffalo
THANK GOD THAT LOSER IS OUTTA HERE!
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AtwaterLouse
WCP - Your article implies the labor troubles were about only a wage dispute: 'BSC became involved with a dispute with Laborers Local 210 over wage rates at the project...', but why didn't you also mention the widely reported health and safety issues?
'Safety, labor issues cloud multi million-dollar plans of Statler developer By Sharon Linstedt NEWS BUSINESS REPORTER 01/23/08
...Meanwhile, Issa's company faces U.S. investigations by the National Labor Relations Board and the Department of Labor's Occupational Safety and Health Administration for practices tied to the $118 million Statler renovation. ...The OSHA investigations target Connex Construction LLC, the construction arm of BSC Development, and C. Tabbi & Co., a local firm hired as a drywall and painting subcontractor.
...OSHA, which had threatened fines of $15,750 for the violations, confirmed that it reached a settlement with Connex on some of the charges as of Friday. Terms of the settlement were not disclosed.
Sworn statements by demolition and construction laborers filed with the NLRB also allege serious safety lapses. The workers' affidavits contend that they were ordered to remove sections of walls and ceilings, exposing asbestos, without the benefit of protective suits and breathing apparatus, or abatement training.
...A group of 28 Statler laborers began their organizing efforts last summer, aiming to boost pay from $8 an hour and gain benefits such as health insurance. The NLRB granted approval for union elections in mid-September, and the workers selected Laborers Local 210 as their union affiliation.
Over the last few months, BSC/Connex trimmed its employee roster to about a dozen. Complaints filed with the NLRB allege that BSC Group retaliated against union activity by firing about 20 workers and discriminating against others.
Two workers said they were dismissed for attending an OSHA seminar on asbestos removal. ...'
Full text of above is here about 10 items from top. That was from the Buffalo News in January, and there were other similar reports in the BN and Business First over the past year. That article also says Issa had an unusually high number of noncompliance notices under British health and safety laws on his recent project there - 19 separate violations. How is it that Uniland's non-union construction projects and Paladino's non-union construction projects somehow get done in Buffalo without this level of NLRB and OSHA issues as happened with Issa?
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AtwaterLouse
thinker - any answer to the question I asked at end of comment above?
Also, do you think not providing proper safety equipment and training for $8 an hour asbestos removal is something usually done by reputable non-union contractors in Buffalo (Uniland, Paladio's contractors, etc.)? Isn't it a huge sign of Issa's incompetence or worse? And his troubles in England as well - all a coincidence or run or bad luck? Or are Buffalo unions to blame for his problems in England too?
I agree with your point that a lot of union-related factors do hurt Buffalo's economy, but in Issa'a case that's not even close to a real excuse.
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Hoss
I'm guessing he didn't follow through with the project, because he couldn't get a loan. Anybody read a paper other than the Buffalo News? The additional living wage labor costs had nothing to do with it. That was chicken scratch in the grand scheme.
I want to know how many free drinks and dinners he conned out of folks here.
And what happened to the 45' "Statler of the Sea"? That should be put on display in Lafayette Square as a reminder for the next time some silver bullet rides into town...
http://www.buffalorising.com/story/statler_on_the_sea
Hopefully the new owners have the financing to see this through. It could be incredible...
Best of luck to Mr. Issa, he most likely tried his hardest.
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vgs
I want to know how this affects Gaustad's top 10 list of things that will never happen. Gaustad?
Forget Issa now, he's done, it's over and this worthy projects is still alive.
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gaustad
VGS, It doesn't affect my "Top 10 list of things that will never happen in Buffalo" at all because this project will also fail.You see, Buffalo is not "Business Friendly." Can you say Bussssinneess Friiieendly?
What makes you think this project will materialize, because the buyer said so??? how do you know they buyer is not going to buy the Statler, sit on it, and look for more money, which he will probably get because the Statler sits dead smack in the heart of downtown Buffalo....speculation.
The "Top Ten List of Things That Will Never Happen in Buffalo" will not change until I see the finished product.
(deleted- off topic}
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UrbanGuy
sorry heatherfrowns...you didn't give me much substance to work with. i'll try again so that maybe i redeem myself in your eyes to urbanteen. Issa didn't execute a good plan. He had a lot of unfinished work across the ocean and shouldn't have rushed into this project. For example, he tried tot tackle this plan without doing his due diligence into historic tax credits upfront but instead tried to grab them at the end of a failing project in order to keep it afloat. It was unlikely to get completed and most people knew this, but some people like to be optimistic. Some people don't care to hear the same ol' droll, "it's not gonna happen ...see i told you it wasn't gonna happen" attitude. by that merit, no project should be undertaken. even the most well laid out plan could fall apart for a number of reasons. granted, again, his was a poor plan, i was just saying this site is to keep people excited about the city. not to further spew self doubting attitudes. you should move to north carolina, you'll be around your kind of WNYer who likes to gripe about lack of progress but does little to make a difference.
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urbansoul
Great news. Marriott Residence brand is a great match for the building. These are developers with a proven track record, unlike Issa. Please people though, when are you going to dig up something on them. Get working on your homework assignments already!
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gaustad
UrbanGuy, In Heather's absence I can tell you that you are missing the point. You misconstrue some comments as pessimistic when they are meant for people to see past the pipe dreams and move on to realistic projects that are not a waste of time.
Although, we all want the projects to come to fruition, I for one believe that the people on this site become too optimistic about unrealistic projects only to be disappointed over and over again. This destroys morale and keeps Buffalo a third rate city.
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STEEL
"You and ever other Sabre jersey wearing, gold wig, tin foil stanley cup, living with your grandma until you are 40 cheese puff eating, snow plowing, magnum PI mustache, Bills zubba wearing Buffalonian...."
Funny, This is the exact image I get when I think of Gaustad. ;-)
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urbansoul
You forgot, he has the Genny in hand too! lolol
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Assaroni
{deleted- off topic}
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Sobojoe
Wow, I feel like I'm drowning in cynicism and negativity - pretty much par for the course on this discussion board.
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heathersmiles
Urbanguy - That "Heatherfrowns" comment, what can I say except WOW! You sure put me in my place!
I appreciate Gaustad explaining what I was trying to get at with my simple three word comment that obviously drove your panties up your crack. I think the word I used explained it all, in a more than sarcastic manner.
(In Weiner69 style) I AM NOT SURPRISED.
This news shouldn't be a surprise to anyone with an open mind.
Bashar Issa came to town, with his daddy's money, blowing sunshine up your ass you believed him and that's funny!
Seriously though, I understand where you are coming from, you are sick of hearing about major projects failing before they really get off the ground. We pin your hopes on the next big project hoping that this will be the one that goes all the way, only to be let down again. We hate to have people throw it in our faces like the four consecutive Super Bowl losses, where our only consolation is "hey we made it four times". I feel the same way sometimes, and I hate to be negative, but this project was doomed from the start. Bashar has little experience and had just left two projects half finished in Manchester when he hit Buffalo. He is telling Manchester that he has lost the financial backing to complete his project, but then buys a magnificent boat "for his guests" long before the lobby was even completed. The only guests that were going to see that boat were friends of his and a host of zebra mussels that clung to the rudder like we cling to these projects. This is the type of con that Meridith Wilson contrived, only Henry Hill isn't falling for Marian at the end, Henry just ups and leaves.
It doesn't matter that he had issues with the unions or that he didn't file for tax credits. He didn't know what he was doing. Too many people were saying that at the start to ignore, and the signs were evident that this was true long before he pulled out. I am not sure that he gained anything from this project, so maybe he is a modern day Francisco Danconia instead of a Henry Hill, who really knows except for him. All we do know is that on paper and in reality, this was a pipe dream that was not meant to be.
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target
It is useless for people to sit around saying "I told you so," what have they done to help the city?? Issa did not see the Statler building as an opportunity to screw Buffalo over, or give us false hopes. He might have been over ambitious in his plans, but that doesn't mean that he did anything malicious. He obviously does not have the best business plans given that he has financial problems both here and abroad. We can fault him for this, but I'm sure that did not not plan for any of this to happen. Maybe we need to have a way of monitoring the sales of these properties to make sure that the potential owners have sound plans for them.
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gaustad
Thanks for clarifying Heather...and I don't think you are being negative. Buffalo politicians should have looked at Issa's resume a little closer before popping the champagne bottles....it was that simple. A lot of time and energy could have been saved for a real developer. do we have one now or are we going to make the same mistake?
{deleted- flaming}
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buffaloweiner
I have to agree with TARGET and others that Issa was well intented and sincere in wanting to accomplish something at the Statler.
I also have to agree that Buffalo is better off than Detroit. Detroit has lost its Train Stations and its Statler and a significant number of other buildings....same with Cleveland.
Now that being said, the Statler sale and redevelopment was common sense really. Now that the Federal Courthouse will be completed next year the Statler is now prime office, residence and hotel Space.
We must also not forget that the two properties most affected by the Federal Courthouse and the Statler are Snyders Hyatt and the Convention Center. Once the Statler is complete the Convention Center site becomes more valuable for an office tower and the Hyatt becomes more valuable as mixed use (office, residential, hotel) space.
Prepare yourself fellow Buffalonians the war of the convention center and hyatt are coming soon.
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gaustad
(FLAMING) BRO - WHAT DOES FLAMING MEAN?
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heathersmiles
Flaming liberal? Flaming redhead? Flaming hom... never mind.
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Lackawanna12
it has always taken long to get things built in buffalo and always will
http://gapfel.com/hamburgcanal/index.html
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UrbanGuy
you two will never get it. and smiles...sorry for trying to outwit that amazingly genius urbanboy comment you laid out there first. sorry for trying to pull a chuckle out of you.
you BOTH keep missing my point that sobojoe is eluding to. this board is meant to make feel optimistic about the region. even if we all know it was doomed from the start what good does it do to state it? congratulations, you said something we all knew! do you feel good about yourself for being the first one to say i told you so? if that's the case start a new web page and lay all that garbage out there. I'm not trying to pollyanna, i just don't think all this negative attitude is necessary, especially on a site like this. there's nothing productive about saying it. I feel like i'm contributing to it now.
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tonyarmani
Go Bills!
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RonR
UrbanGuy,
This is not a flame
You said:
"you BOTH keep missing my point that sobojoe is eluding to. this board is meant to make feel optimistic about the region."
Isn't this subjective? I mean to some, covering the positive or looking at the glass as half full does make one feel optimistic.
However, for others, wanting to see the people in the region actually talk about the problems in an effort to fix them or make others aware of them is a positive step forward. For some, it would be hard to find optimism in Buffalo until the people of Buffalo really break down the bad.
The latter is not a fun conversation and in fact is very painful. But is it not a critical step? Since the leaders, both public and private, both want to skip this step because of the challenges, isn't BRO a perfect place to flush out the system so to speak?
Yes the tone could be different...from both sides....but IMHO the conversation needs to happen.
Just my 2 cents.
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AtwaterLouse
target - You say he wasn't malicious at all here, but don't you consider multiple offenses of endangering worker safety to be malicious? Or do you think OSHA and the NLRB were wrong about Statler workers being told to remove hazardous asbestos without proper equipment and safety training? Just curious how you reconcile all that.
UrbanGuy - Do you own this blog?
If so, I suggest you just delete the comments you don't want to appear here, and ban commenters who don't parrot the desired opinions.
If not, why are you pretending you're the owner/boss around here? How about just stating YOUR viewpoint about the topic, explain how you disagree with others about the topic if you wish, and leave it at that? Instead, you're acting like some self-appointed attitude police by tellin gothers to stay silent when their opinions don't match yours.
By the way, your insistance that others keep any critical objective thinking to themselves does make you sound like a pollyanna, even though you wrote that you're not trying to be one.
If any particular commenter(s) upset you so much by not being cheerleaders about every single project, then I suggest just clicking Avoid User for them. It works very well.
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SignWizard
I would like to see Scott Enterprises continue to get a foothold in Buffalo. I would love to see Buffalo get a family style tourist attraction like Splash Lagoon is in Erie or Strong Museum in Rochester.
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UrbanGuy
@atwaterlouse
good points and i guess you're right.
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sally
There is an indoor water park with two attached hotels UNDER CONSTRUCTION directly across from BNIA where the old Radisson/Executive once stood.
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SignWizard
Yes Sally a smaller one not a big tourist draw and not in the city.
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distas
He probly blew all his money on that damn boat
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KenS
sally...What indoor water park? I don't remember hearing anything about this? I knew the Radisson was knocked down, but I haven't driven by there recently.
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crisa
Did Bashar Issa refuse to pay into Worker's Compensation?
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blackrocklifer
Think this might be connected more to the economic mess that we are in than unions or other favorite scapegoats
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crisa
SALLY: What indoor water park? The closest ones are in Sandusky, Ohio and the Poconos.
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heathersmiles
Crisa - you don't get out much do you? There is the Great Wolf waterpark in Niagara Falls, Ontario and Splash Lagoon in Erie, PA. Both are great places for a weekend getaway with kids. Splash Lagoon is packed on the weekends, especially during the winter.
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vgs
Indoor water park being constructed near Ellicottville/Salamanaca too
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crisa
How many indoor water parks are not so kiddy-oriented?
By the time we heard of them, our grandkids were growing too old for kiddy stuff. Its because of our grandkids that we are interested.
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Assaroni
Genny Cream Ale
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sonyactivision
Issa showed up, stirred things up, tried to loosen the pursestrings on a banking system awash in cheap money and, unlike his heroes, never managed to leverage himself enough to build anything. the Statler is still very much a troubled property and might never be a hotel again. It's hard to see this ending well but I'm hoping it does.
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estreet
Is the Park Lane out?
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PrincetonElms
I'm glad to see some coverage of the crash of Issa; I expected to see only the HOORAY OUR MESSIAH stories and then silence. He came here to put money in his pocket & show his Daddy that he can "do a deal" on his own, but he has NO money of his own and won't, until Dad croaks and leaves him something. The meltdown of his English projects proves all.
Expect to see the old Statler imploded, in the next 10 years.
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impressingagent
man i love Issa, I hear he is working at Chippendales across the border.
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