Renovating and reopening the first three floors of Statler Towers as a banquet destination cost owner Mark Croce about $7 million. He said bringing the rest of the historic building back to life would cost more than 10 times that much.
Croce pegged the total cost of gutting and restoring the entire 18-story landmark – including asbestos removal and conversion of the space to new uses – at $90 million or even $100 million.
And he is not in a rush to do it.
He owns the building free and clear, having paid $700,000 in cash for it in March 2011 following a bankruptcy auction. The building was stabilized with $5 million from the city. The first three floors now house a profitable catering and events business, Statler City. With multiple banquet rooms, bars and other venues, it has become a popular location for weddings and other parties, sometimes hosting five events in a weekend.
The upper floors have been mothballed and taken off the market until he says he is ready and able to deal with them. Any asbestos in the walls or floors is secure, and doesn’t have to be addressed until demolition starts.
“I’m taking a wait-and-see attitude,” he said. “I’m in no hurry because the building is paid for.”
Moreover, because he plans to rely heavily on state and federal historic tax credits to offset 40 percent of his costs, he would have to finish redeveloping the entire building within two years of starting on it, or risk losing some of that financing. That already forced him to forgo the credits for the work on the first three floors, and it means he won’t start on the rest until he’s certain of what he will do, including locking down several larger tenants, he said.
“Unless I’m able to commit six to eight floors at the same time, it doesn’t make sense for me to do it piecemeal one floor at a time,” he said.
The once luxurious Statler Hotel has been one of two big white elephants within Buffalo real estate circles, along with the city’s tallest skyscraper, One Seneca Tower. Besides their size, both occupy prominent positions in downtown Buffalo.
Croce now says the 850,000-square-foot complex will likely be as much as two-thirds residential when completed, more than he had originally envisioned.
“There are a lot of hotel projects coming online ... There’s been a lot of interest in commercial, but there’s a lot of commercial space available already,” he told a crowd of more than 60 real estate brokers and developers Thursday at the New York State Commercial Association of Realtors’ monthly breakfast. “I have to take a wait-and-see attitude. With all the activity, we have to see if the financial reasoning stands up.”
Croce’s original plan was for half the space to be residential, with the rest split between a high-end hotel and office space.
In the interim, though, at least 10 hotels have been built, are under construction or are in planning stages in Buffalo itself, not counting the suburbs, including a Courtyard by Marriott at One Canalside, the Marriott Buffalo HarborCenter, Hotel@The Lafayette, the hotel going into the Richardson Complex, the hotel planned by Chason Affinity Cos. at Forest and Elmwood avenues, and Delaware North Companies’ planned hotel at 250 Delaware Ave.
And Croce himself is redeveloping the Curtiss Building into what he says will be the highest-end boutique hotel Buffalo has seen. .
“We believe there’s a strong hotel market, but there is a threshold where the hotels start cannibalizing each other,” he said. “I don’t want to be the last guy in playing musical chairs.”
Similarly, while there’s some demand among office users, there’s also plenty of vacant space in the downtown core. By contrast, the demand for more downtown apartments is only growing because of the medical campus and the renewed desire by many people – particularly younger workers – to live in the city.
“The market will determine what goes (in the Statler),” he said. “The market will decide what it will be reincarnated as.”
Croce is engaged in six other projects right now, including the Curtiss and the exterior restoration of the Statler’s facade. He also just finished a “top-to-bottom” overhaul of his Buffalo Chophouse restaurant for $750,000 – “it’s the sexiest-looking restaurant in downtown Buffalo” – and spent $1 million over four weeks to gut and renovate the second floor above Darcy McGee’s and SkyBar to create the new LiFT Nightclub, complete with a $50,000 crystal chandelier.
Croce is also finishing up plans for a $9 million adaptive reuse of the former Byers Building at 505 Pearl, a six-story, 42,000-square-foot structure that will become 29 apartments and two commercial tenants on the first floor. And he’s starting plans for the $13 million renovation of the old C.W. Miller Livery Building at 75 W. Huron St., next to Curtiss. That 100,000-square-foot, six-story former horse stable will have 40 apartments, 28,000 square feet of commercial office space, indoor parking and access to 200 adjacent surface spaces. Both projects also would use historic tax credits.