By JAMES FINK
Business First

The financially ailing Statler Towers is about to lose one of its few remaining tenants.

Sources said the state Worker's Compensation Board will soon vacate the Statler and shift its offices to the historic Cyclorama building along Edward Street.

Robert McDonnell, Ciminelli Real Estate Corp. vice president, confirmed that representatives from the Workers Comp board toured the Cyclorama.

"But there is no signed contract," he said.

Principals from Ciminelli Real Estate Corp. are among the Cyclorama's owners.

The Worker's Compensation Board occupied nearly 25,000 square feet in the Statler, paying almost $20,000 in monthly rent. Losing the board is viewed as a dual blow for the Statler, both in terms of its position as one of the building's anchor tenants and the revenues it generated for the downtown Buffalo landmark.

The Statler is slated for a court-imposed foreclosure auction on Aug. 12.

The building is owned by BSC Development Buffalo LLC, a firm headed by British investor Bashar Issa. Issa is facing legal and financial problems in Buffalo and Manchester, England.

The Statler was placed into involuntary Chapter 11 bankruptcy protection earlier this spring. The building is losing more than $80,000 per month and continues to face a dwindling tenant roll.

"Am I surprised by this? No," said local auctioneer Cash Cunningham, whose firm is handling the Aug. 12 auction. "This is just an unfortunate part of the bankruptcy."

The Cyclorama has been vacant since its anchor tenant, LPCiminelli Inc., moved into the former Greater Buffalo Savings Bank headquarters on Main Street this winter.

Another tenant, Strategic Investments, has agreed to move its offices from the Cyclorama to the 13th floor of the Key Center at Fountain Plaza twin tower complex. Strategic Investments will occupy approximately 4,000 square feet in Key Center's North Tower.

"This frees up the Cyclorama for a single tenant," McDonnell said.

Ciminelli Real Estate handles the leasing and management of Key Center.