NIAGARA FALLS – Officials said Wednesday that the plug may be pulled on the long-delayed Hamister Group hotel project in downtown Niagara Falls if it’s not built this year.
“I think 2016 is the year he has for construction,” said Christopher J. Schoepflin, president of USA Niagara Development Corp.
But he and Mayor Paul A. Dyster said they are optimistic that the project will finally be constructed this year – primarily because Hamister Group, a Buffalo company led by Mark E. Hamister, missed a deadline last September, and now any expense incurred in the run-up to the project will no longer be reimbursed from state incentives.
In other words, Dyster and Schoepflin explained, the Hamister Group would lose more than $1 million that it has invested in the project if it doesn’t go all the way to completion. Dyster said Hamister, who must make weekly progress reports to USA Niagara, has plowed “six figures” into bank application fees alone.
USA Niagara, a state agency, granted Hamister $3.85 million toward the project after Gov. Andrew M. Cuomo pressured the City Council into voting, 3-2, to sell the lot to Hamister in 2013.
The city and USA Niagara can decide jointly to call off the project.
Schoepflin said, “We have the ability at some point to call off the transaction. But it’s not as clear as all that.” One question to ask, he said, would be “Are you working in good faith?”
“Most of the time, it’s recognizable when a transaction has exhausted itself,” Schoepflin said. “I don’t think Hamister is there yet.”
The reason long given for the delay in the project has been difficulty in securing financing. Schoepflin said Hamister now is reviewing proposals from “three lending institutions of substance,” and one has reached the “term sheet” stage of making an offer to Hamister. He said he expects a closing on that transaction “in the very near future.”
A building permit was issued by the city last summer for what is supposed to be a $35.7 million, 128-room Hyatt Place hotel at 310 Rainbow Blvd. But there hasn’t been any building.
“What we’re trying to do is develop the first ground-up hotel at an upscale level since urban renewal,” Schoepflin said, referring to the federally funded demolition of most of downtown Niagara Falls more than 40 years ago.
So when will construction start?
“If I were betting on this, I would say shortly after the weather breaks,” Dyster said.
“We have nothing new to report,” Hamister Group spokesman Christopher Leonard told The Buffalo News by email.