If the shuttered Hotel Niagara in the heart of the city's tourist district is to be restored, it's going to take more time.
The bank that holds the mortgage, after a failed attempt by a Texas couple to renovate the 12-story lodging on Rainbow Boulevard, kept control of the property during a foreclosure auction Thursday in City Hall.
Several potential bidders who showed up for the auction -- including Falls hotelier and 2010 gubernatorial candidate Carl P. Paladino -- were unwilling to place a bid at or above the $1 million minimum offer that the State Bank of Texas was willing to accept during the public proceeding.
The bank lost $3.29 million as part of the $4.6 million purchase in 2007 by Houston-based Amidee Hotel Niagara, a limited liability corporation owned by James T. Cook Jr. and his wife, Judith B. Cook.
Bankruptcy proceedings against the company started in September in Texas.
The 1920s-era hotel never reopened after the Cooks bought it and hatched a $15.2 million plan to restore it to its historic grandeur.
City officials and the state's Niagara Falls economic-development agency, USA Niagara, pledged $4 million toward the renovation in 2008, but Amidee Hotel Niagara turned the money down because of historic preservation requirements tied to the funding.
The city condemned the building in March after the Department of Code Enforcement determined that there was no water or electricity in the building.
After a 20-minute reading of the terms of sale, which started at noon Thursday in the lobby of City Hall, the auction itself ended a minute later, after the bank placed the minimum bid limit and other prospective bidders failed to meet it.
"I'm just watching," said Paladino, whose Ellicott Development Co. a year ago opened a boutique hotel, the Giacomo, in part of the former United Office Building. Ellicott Development owns the entire 20-story art deco building, also on Rainbow Boulevard, which includes apartments and state office space.
Others interested in the sale included Faisal Merani, of Niagara Falls, Ont., who is in the midst renovating two hotels on Buffalo Avenue on the New York side of the falls -- and who said he didn't want to go as high as $1 million -- and Sant "Sean" Kumer, who owns Choice Hotel properties in Pennsylvania. Kumer expressed interest in reopening the hotel as a Best Western and said the quick bidding caught him off guard.
After the auction, Kumer talked with Buffalo attorney Franklin W. Heller, a senior partner with Damon Morey who handled the auction for the Texas bank, about the prospect of further negotiations.
The bank doesn't want to keep the property, Heller said, but wants to recoup as much as possible of the money that it lost on the mortgage. That's why he bid $1 million on the bank's behalf.
"I assume [the bank] will want to sell it, and sell it for as much as possible," Heller said, "but if the bank hadn't bid at all, then the property would be in limbo."
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