NIAGARA FALLS – The historic Hotel Niagara, dormant for nearly a decade, is to be purchased by a state agency using funds from the Buffalo Billion.
USA Niagara Development Corp., the Niagara Falls arm of Empire State Development, then will seek proposals from private developers to restore and reopen the 12-story, 193-room hotel at 201 Rainbow Blvd., which is listed on the National Register of Historic Places.
USA Niagara President Christopher J. Schoepflin said Wednesday that $5 million from the Buffalo Billion, the state fund set aside for economic development in Buffalo Niagara, will be used to buy the hotel, closed since 2007, and pay the expenses of a full inspection, insurance and holding costs before it is resold to a new developer.
“There’s obviously a lot of symbolic value in the hotel. It’s an icon of downtown Niagara Falls,” Mayor Paul A. Dyster said.
The hotel currently is owned by JSK International Corp., controlled by Canadian businessman Harry Stinson, which is to be paid $4.4 million. “It was arrived at through appraisal and negotiation,” Schoepflin said. USA Niagara hired an appraiser who valued the building between $3.9 million and $4.5 million.
The $4.4 million purchase amount happens to be the same price JSK was to have been paid last year by Reception Hotels and Resorts, a Rockland County company that obtained a tax break last June from the Niagara County Industrial Development Agency for a $27 million purchase and renovation.
The hotel was supposed to be reopened as a Radisson, but the deal fell through and the tax break never was closed upon, IDA attorney Mark J. Gabriele said.
Another Stinson idea, opening the hotel as housing for students at the nearby Niagara County Community College Culinary Institute, also failed to come to fruition.
Schoepflin said the hotel is “a shell,” although the roof is sound, as is the terrazzo flooring in the lobby, and utilities exist. But at the moment, Schoepflin said, “There’s no flooring, there’s no walls, there’s no running water.”
Dyster said, “The vision has been there but the wherewithal to complete the project has not.” But he added that JSK and two previous owners in the past decade did invest some money in the building.
The Hotel Niagara, built in 1924, “is not usable in its present condition,” Schoepflin wrote in a memo to the USA Niagara board, which approved the transaction Wednesday.
It gives USA Niagara a 90-day inspection period, including environmental studies, before closing on the purchase.
The lot covers 0.53 acres and does not include its own parking lot, but Schoepflin said there are three or four other parking facilities within half a block.
“We do not intend to be the long-term owner of the Hotel Niagara,” Schoepflin said in an interview. But he said the agency probably will have title for about two years.
The request for proposals from developers is expected to be sent out around midyear, and a developer is to be chosen by the end of the year, Schoepflin said. The developer will be eligible for historic preservation tax credits, which Schoepflin said “could be significant. They could be $5 million or $6 million.”
But it was apparent, given the price tag on the failed Reception Hotels plan, that the developer might have to spend a lot more than that to make the facility once again a jewel of the city.
Schoepflin said USA Niagara might consent to sell the property to the new developer for less than it intends to pay.
As for the specific reuse, Schoepflin said, “We’re going to leave some creativity to the private sector, but for Hotel Niagara the only thing that makes sense would be lodging, housing, or some kind of retail driven by food and drink.”
Story topics: Buffalo Billion projects