LEWISTON – If you want to buy the Barton Hill Hotel, you’ll have your chance at 9:30 a.m. July 21, when the Lewiston business will be the prize in an auction at the Niagara County Courthouse in Lockport.
However, you’d better be a high roller, since $10 million is the admission price.
That’s roughly the sum of the amount left unpaid on the hotel mortgage, plus the delinquent property taxes on the hotel, dating back to 2011.
The current owners, Stabilis Capital Management, a New York City investment firm, took over the hotel in April after foreclosing on the mortgage owed by the original builders, Edward and Diane Finkbeiner. A source with knowledge of the terms of the auction said it is not expected that anyone will be able to come up with the cash to buy the hotel away from Stabilis.
“Theoretically, other people could bid. It is extremely unlikely anyone would win,” the source said on the condition that he not be identified.
If no one else bids, Stabilis will hold onto the Barton Hill. The company also could bid in the auction to hold onto the property if it needed to.
In April, it signed a long-term management agreement for the property with Scout Hotels, a Nantucket, Mass., company that operates eight other resort hotels, six of them on Cape Cod or Martha’s Vineyard in Massachusetts.
On June 8, 2011, State Supreme Court Justice Richard C. Kloch Sr. ordered a foreclosure auction for the hotel, ruling that the Finkbeiners were delinquent on a mortgage on which they then owed $9.44 million.
The auction referee, attorney Sharon Stern Gerstman of the Buffalo law firm of Magavern Magavern & Grimm, said there had been an agreement to put the auction on hold.
For almost four years, the Finkbeiners used legal delaying actions, trying to postpone the sale while avoiding a second foreclosure action, this one from Niagara County for nonpayment of taxes.
The saga ended April 1 in a Buffalo courtroom of U.S. Bankruptcy Court, which handed the hotel to Stabilis. That company was the third holder of a mortgage originally granted by CIT Lending Services Corp., which in 2010 transferred it to Ittleson Trust, which sold it to Stabilis.
At the time, the interest owed on the mortgage had pushed the total mortgage lien to $10.2 million. In addition, the tax tab had grown to $512,982, according to the Niagara County Treasurer’s Office.
Clark Guinn, regional vice president of operations for Scout Hotels, said the auction is no big deal. “It’s a normal real estate transaction when things are swapped like this,” he said.
He admitted that someone could show up to bid, but he said, “I seriously doubt that’s going to happen.”
As for the hotel operations, Guinn said,
“Things have been cranking. People are staying.”
Asked if there will be any changes in the building itself, Guinn called that “an ongoing process.”
A Stabilis spokesman said of Scout, “They’re doing a great job. They’ve cleaned it up.”