A 30-year-old Vancouver man placed the winning $1.25 million bid for the former Hotel Niagara at an auction Tuesday.
Jamil Kara said he plans to turn the 12-story building at Rainbow Boulevard and First Street downtown into a boutique hotel and condominiums.
Kara, who was one of 10 qualified bidders, said that he has been in the condo and hotel business for about seven years and that his development group owns several high-rises in the British Columbia city.
He said he also was involved in the Film Work Lofts, a recently completed project in Hamilton, Ont.
Kara, who after the auction signed a contract to purchase the building, said he already has financing lined up for the project, which he estimates will cost $10 million and take two years to complete.
The purchase price will also include a 7.5 percent buyer's premium, bringing the total to $1,343,750.
"We wanted to expand our operations to the U.S.," he said when asked what attracted him to the Falls building.
The former 193-room hotel -- a Falls icon where actress Marilyn Monroe stayed in 1952 during filming of "Niagara" -- failed to be sold at a foreclosure auction in January, where the minimum bid was $1 million.
By the time of Tuesday's auction, the property had been cleared of all liens and encumbrances.
The State Bank of Texas took over the property after bankruptcy proceedings began against Amidee Hotel Niagara, the previous owner. The Houston-based limited liability company was owned James T. Cook Jr. and his wife, Judith.
Amidee bought the property in 2007 for $4.6 million and planned $15 million in renovations.
The Amidee company gutted the interior of the first floor of the building to the stone walls, while also removing all plumbing, furniture and fixtures from the remaining floors.
Kara said his plans would turn 70 percent of the building, built in 1924, into condos, with the remaining 30 percent into a "five-star boutique hotel."
He said that he will look into the possibility of adhering to historic preservation standards but noted that "it's not that easy."
Kara, who said he liked Amidee's vision for the property, was asked about promises made by previous developers who have announced grandiose plans in the city that failed to come to fruition.
"I wouldn't have bought it if it wasn't going to happen," he said.
Bidding opened at $150,000, and the minimum acceptable bid was going to be $450,000. In order to participate, bidders had to have $45,000 either in a cashier's check or wired to an account.
Kara, who described himself as "a problem-solver," said he was willing to spend up to $2.5 million for the former hotel. He also said he had looked at properties in Florida but didn't think that it was the right time to buy there because he doesn't think the economy has bottomed out in that state.
Canadian developer Harry Stinson placed the second-highest bid for the property, said Curt Schneider, vice president of the Chartwell Group, which ran the auction.
Individuals connected to the Amidee company, known as Amidee Recovery Group, also attended.
The qualified bidders came from three Canadian provinces and five states, Greene said.
The auction was held in the Giacomo Hotel, across the street from the former Hotel Niagara.
Kara and Buffalo businessman Carl P. Paladino, owner of the Giacomo, were the only interested bidders whose review of the building included looking at the sump pumps 30 feet below street level, Schneider said.
Chartwell representatives said they hope the purchase will close by Memorial Day.
"We're selling an opportunity today," said auctioneer Gordon J. Greene.