LOCKPORT – The Texas company that auctioned off three downtown Lockport office buildings last week formally accepted Niagara County’s $3.6 million bid Friday.
“The bank agreed to the number. We’re under a 30-day window to get to close,” County Attorney Claude A. Joerg said.
That means the county will soon be the new owner of 50 Main St., 111 Main St. and 20-40 East Ave. The county has leases on the latter two for county office use, and Niagara County Community College used to lease the first building.
County Manager Jeffrey M. Glatz said he expects the Legislature to vote on appropriating the money at its next scheduled meeting on April 21.
The county was the high bidder, and may have been the only one, at an online auction that ended just before 1 p.m. March 19. The County Legislature was in session and voted unanimously six times in 10 minutes to raise the county’s bid as the numbers on the computer screen kept rising. The mandatory minimum bid was $1.5 million, and the county bid $1.6 million to get things rolling. Not until the last 45 minutes did any higher bid come in.
Despite its win at the auction, the county was not guaranteed the buildings because its bid never reached the reserve price set by the seller, a price that was kept secret from the bidders. The rules also barred the bidders from knowing who the other bidders were
Also, the seller was allowed to enter its own bids to push up the price. As the auction wound down, Assistant County Attorney R. Thomas Burgasser speculated to the legislators that he thought that was exactly what was going on.
The seller was C-III Capital Partners of Irving, Texas, which acquired the buildings last fall from 37 Holdings-Lockport LLC of Sherman Oaks, Calif.
That company, which bought the three buildings from Lockport developer David L. Ulrich for $9.1 million in 2005, was hit with a mortgage foreclosure in December 2013 by US Bank. An attorney for 37 Holdings, Sheldon Berger of Los Angeles, told The Buffalo News last May that the buildings would be sold. He blamed the company’s inability to pay the mortgage on NCCC’s decision to remove its Small Business Development Center from 50 Main St., leaving that former bank building vacant.
“The rent on two buildings is not enough to sustain three buildings,” Berger said at the time.
Now the county, whose leases on 111 Main and 20-40 East were to run until 2018, will own all three buildings. That takes them off the tax rolls, meaning the City of Lockport will lose $58,000 a year in property tax revenue, and the Lockport City School District will lose about $94,000 a year.
Majority Leader Richard E. Updegrove, R-Lockport, said right after the auction that the legislators had decided informally to make up those losses. He said the city probably would be hired for some buildings and ground maintenance, while the county would offer low-cost power credits to the school district.
Mayor Anne E. McCaffrey said Friday that although no formal agreement has been reached, “They’ve assured me they will make the city whole for the next 10 years in lost tax revenue.”
Glatz said the county will help the city and the school. “I wouldn’t commit to saying it would be 10 years,” he said.
Glatz said the county expects to hire three more cleaners and a building maintenance mechanic to maintain the newly acquired buildings. The Social Services Department is headquartered at 20-40 East, while 111 Main houses several departments, including a motor vehicle office, the Board of Elections, the Probation and Human Resources departments and the offices of Veterans Services and Aging.
He said the county has no plans yet for 50 Main St.