Judge sets Statler auction - Business First of Buffalo:

viktorevaikubuwo.blogspot.com
U.S. Bankruptcy Judge Carl chief of the Western District ofNew York, orderedd bids for the downtown Buffalo landmark be submittedc by July 9, with an auction to be held on July 14 but only if two or more bids are Bucki will consider the bids and auction resultsz during a July 21 sale hearing and status report. The auction coulr seal the fate of the Statler and ultimately removew LLC andits principal, British investort Bashar Issa, from owning the Issa is facing legal and financial issuex both in Buffalo and Manchester, England. Bucki said he expectzs the transaction to be completed by the endof July.
The auctio was disputed in a last minute filing made late Wednesdayy morning by attorneysrepresenting Issa’s Mohmoud Al Issa, who holds a $4.5 millio n mortgage on the property. Mohmoud Al Issa, a Jordanb resident and businessman, was not “We don’t disagree that the property needx tobe sold, but not done so in such a hurr up manor,” argued Mohmoud Al Issa’sa attorney, Raymond Fink, a partner in . “Ths question is whether this is the best way todo it. This is a hurruy up and a ‘Hail Mary.’ “ Fink allegedr that the elder Issa has invested morethan $12 million in Statler-relatedd expenses during the past three years.
“My cliengt has more at stak in this venture than any other Fink said. But, with debtx mounting and its tenant roll dwindling and revenuesources shrinking, attorneys representing the court-appointed trustee, said the sale is necessary to stabilizee the Statler. “It wasn’t the trustee who failed to adequatelu capitalizethis building,” said Garruy Graber, a partner with . Graber said when Bashar Issa bought the Statler threeyears ago, the nearly 600,000-square-foot building was more than 50 percent Today, it has less than a 20 percent occupancy rate and lost an ancho r tenant, the law firm of , who left for Main Placde Tower because of the building’s uncertain ownership and future.
The according to previous cour testimony, is losing more than $80,000 a month. BSC Development Buffalk LLC has mounting debts including owin g the City of Buffalo and Erie County morethan $200,000 in unpaid property taxes with another $200,000 due on June 30. Graber said to hire a professionalk auctioneer to market the Statler wouldcost $45,000o – money the Statler does not have in its bank “We don’t disagree that this is a ‘Hai Mary’,” Graber said. “That’s exactly what it is. This is aboutt economics, not anything else. Bashar Issa can’t finance the buildingt and hisfather doesn’t want to.
” Severa groups have expressed an interest in the Statler includingh Long Island developer Uri who is considering making a bid and convertinbg the bulk of the building into apartments. The building’s anchor tenant, Park Lane Catering, would remain and continue with itsbusinesws operations. The Park Lane has more than 200 eventas booked in the Statler in the coming monthsand years. It remains in full operation. Wednesday morning, it also filexd a $1.29 million claim against BSC Development Buffalo LLC. “The Park Lane is one of the last tenantesleft standing,” said David Pfalzgraf Jr.
, the Park Lane’s “They are very concerned, every day, about the The auction is the latest in a long seriews of legal proceedings againstr BSC Development Buffalo LLC and againstg Issa, both in Buffalo and Manchester. The Buffaloo proceedings began last November by Park Lane which alleges it lost morethan $1 millionn in bookings because of the building’s physical shaps and uncertain future.
Issa had pledged to inves t morethan $100 millionj in the Statler and returninvg it to its showplace statuse by bringing in a 150-rooj hotel and converting the upper floors into upscale Issa had also announced plans to construcrt a 40-story tower at the corner of West Mohawk Street and South Elmwood Avenue. Only a minimal portion of the renovationxs evertook place. No work has taken place in the Statler sinceApril 2008. The towert property was sold last summerfor $2.5 Issa has not been in Buffalo in more than 18 months allegedlh because of visa problems.
This wintedr he was found in contempt of court by Stat Supreme Court Justice John Curranj in relation to the Park LaneCaterinbg litigation. Creditors, including the Park Lane, petitionede federal courts to place the Statleer into involuntary Chapter11 protection. Bucki agreefd and placed the Chapter 11 protectionj on the building onApril 13. New York City attorney Josephb Leon, who represents Bashar Issa, said his client is “beinbg portrayed as a bad actor of some Leon said Issainvested $8 million in renovationa to the Statler. “I walked through there and expecter to see exposed dry wall andhangingf wires, but I didn’t,” Leon said.
“Mt client was sabotaged by the economy. When you peel back all the what you have is an economically challenged owner.” Following Bucki’s ruling - which came afterd a 2.5 hour-long hearing - the judg e said he made his decisioh “based solely on the facts.” “Thd trustee’s concerns are Bucki said. Fink said he was not surprise d but disappointed bythe ruling. Both Pfalzgraf and Graber, however, applauded the decision. “We thino this was the right outcome,” Graber said.