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AM&A’s project on Main Street in Buffalo hits a head wind

Plans for the long-delayed hotel project at the former AM&A’s building in downtown Buffalo have changed, and city officials are expressing some skepticism about the project’s future.

The Chinese investor group that had planned to convert the long-vacant department store at 377 Main St. into a large hotel and medical clinic for Asian tour groups has shaken up the leadership of the project, as it seeks to bring in professional contractors and tie it to a major global hotel brand.

The proposed 300-room hotel in the 10-story complex will now be a part of the Wyndham Hotels and Resorts group, said John A. Schenne, the East Aurora engineer and project designer who has been serving as the group’s unofficial spokesman. It would be only the second Wyndham in the area, following the Wyndham Garden Hotel that is part of Ellicott Development’s Mosey complex on Main Street in Williamsville.

A spokeswoman for Wyndham Worldwide and its Wyndham Hotel Group subsidiary, Gabriella Chiera, said that the chain does not have an “executed agreement” for a new Buffalo site but that she could not disclose whether there are any discussions or an agreement in principle.

Schenne also said that Lily Li, the woman who previously was identified as the leader of the group, has moved on to another project in the investors’ larger real estate portfolio, which includes developments in New York City, China and Jamaica. Bally Bao, also based out of its office in Flushing, Queens, took the helm in January as the group’s new managing partner, Schenne said.

“There’s nothing changed, except there’s a different person calling the shots,” Schenne said. But the almost two-year wait for any action on the project since the investor group first bought the building, together with the recent changes and the continued mysteriousness of the group, has put city officials and real estate experts on alert, although some observers suggest cultural differences and language barriers may also be at play.

“We’re not used to the way Chinese operate, in Buffalo,” said developer Rocco R. Termini, who owns the nearby Warehouse Lofts and the Hotel @ The Lafayette, where the Chinese group is staying this week while in Buffalo. Termini himself had previously looked at the department store building, as well. “I don’t know if this is common, if this is what happens in other cities. It’s foreign to us,” Termini said. “Maybe this is how slow they are. It’s just a different mode of operation that we’re not used to.”

Bao, a U.S. resident who is now overseeing the project, and other members of the group from New York and China met Friday with Buffalo Mayor Byron W. Brown to reassure him that it’s still going forward. “We’re kind of skeptical, too, to be honest,” Brown said. “We really put them through their paces this time, asking them for all kinds of information.”

However, developer and Statler City owner Mark D. Croce said the delays aren’t necessarily unusual or concerning, citing his own past experiences with financing, regulations and other factors in complex projects. “I can’t pass judgments on others, because I had a tremendous amount of work to do on an adaptive reuse of a smaller building that sat vacant for 70 years,” he said. “There are various factors that are involved in these projects, a lot of moving parts. It takes an awful lot to put a deal like this together. There’s been a number of times even in my own projects when there were starts and stops.”

Schenne said the group hopes to start long-delayed asbestos remediation work in a month and finish within four months after that – repeating a goal that has been stated multiple times since last summer. Construction would begin in midsummer, with F&B Construction of Catskill, Greene County, as the contractor.

He also said the group has pushed back the completion date by a year, to December 2017.

The latest project outline is a big change from prior plans for an independent hotel in the building. The investor group, calling itself Landco H&L, bought the 375,000-square-foot complex for $2.775 million in 2014, promising a vibrant new destination for Asian tour groups coming to Niagara Falls. Plans called for a 300-room hotel, two restaurants, 6,000 to 8,000 square feet of additional retail space, a large pool and spa in the basement, a second-floor medical clinic and six apartments on the top floor for hotel management and staff.

As part of the $50 million to $70 million project, the group intends to carve a 10-story atrium into the middle of the building to provide windows for interior rooms.

Schenne said the overall scale of the hotel, as well as plans for the pool, spa and restaurants, haven’t changed, though “nothing’s finalized.” But the medical unit has been dropped, and the group says securing the Wyndham brand is a solid step forward, introducing the strength of a well-regarded hospitality brand and the global reach of its reservation system.

He said the hotel and restaurants – one Chinese, one American – will still focus on serving traveling Asian tourists visiting Niagara Falls, noting that the investor group “has ties to tour companies, so they can fill it up with tourists and have 100 percent occupancy.”

“That’s what they want to do,” Schenne said. “The goal of every hotel operator is to have 100 percent occupancy.”

A large Wyndham hotel also would bring another higher-end brand name into downtown Buffalo. The city has a new flagship Marriott, a Courtyard by Marriott and a Hilton Garden Inn, with a Westin coming to Uniland Development Co.’s 250 Delaware tower.

The project has the needed approvals, but work was delayed by the need to restore electrical power to the building in order to clean up asbestos and other environmental hazards before construction begins. Landco had originally intended to do the remediation work on its own, after training and certifying its own workers for the cleanup. Schenne said the group has instead decided to hire a third-party professional firm and is seeking bids for the cleanup, which city officials estimate could cost up to $12 million.

email: jepstein@buffnews.com