By James Fink
Business First

A trio of local businessmen emerged as the winning bidders for the historic but financially ailing Statler Towers.

In a tense, rapid-fire auction run by veteran auctioneer Cash Cunningham, Park Lane Catering LLC's bid of $1.3 million was enough to win the rights to acquire the 82-year-old, 18-story landmark building, which overlooks downtown Buffalo's Niagara Square and has been plagued by inconsistent ownership for the past few decades.

Park Lane Catering LLC, whose three main partners re William Koessler, owner of Park Lane Catering - the building's anchor and most visible tenant; local developer Richard Sterben; and Tom Zawadzki, a Buffalo businessman with deep connections to the hospitality industry.

The trio was caught in a bidding war with Gail Pirinzi, who was dressed in cowgirl attire for the auction but declined to identify the investor partnership she represented. Pirinzi left the Statler almost immediately after the auction ended Wednesday morning.

Park Lane Catering's initial plans are to renovate the Statler into a mixed-use facility, anchored by a 235-room hotel on its middle floors and 111 market-rate apartments on its upper floors. The building's first three floors will be renovated into Class A office space, Sterben said.

Sterben also confirmed that his group is negotiating with three prospective brand-name groups to run the hotel. He hopes to have the hotel open within the next 18 months.

In all, the investment group is expected to invest around $100 million to bring the once-opulent Statler back to life.

Sterben said asbestos removal and other remediation requirements alone will cost approximately $20 million. Work will start by September, he said.

Savarino Cos. has already been retained as the project's general contractor.

Their bid must be approved by U.S. Bankruptcy Court Judge Hon. William Bucki during a hearing set for Tuesday. A closing is scheduled for Aug. 28.

"The Statler will have a new owner, and it bodes well for Buffalo," Cunningham said.

The auction was ordered by Bucki in June as part of a series of legal actions against the Statler's current owner, BSC Buffalo Development LLC, whose principal partner, British investor Bashar Issa, is facing legal and financial issues both in Buffalo and Manchester, England. The Statler was placed into involuntary Chapter 11 protection in April.

"I'm glad a local and qualified group ended up with the Statler," said Buffalo Mayor Byron Brown, who attended the auction.

The auction drew a packed crowd of more than 200 people, including many of the region's most prominent developers and lawyers, plus a host of onlookers.

Following a 15-minute reading of the legal notice and court-ordered bidding requirements, Cunningham began the much-anticipated proceedings at 11:16 a.m. Cunningham asked for an initial bid of $1 million, but was met with stone silence. After he offered the building for $800,000, then $500,000 and $400,000 before stopping at $300,000, the bidding between Park Lane Catering and Pirinzi's interests heated up.

Within two minutes, Cunningham had nurtured the price up to $1 million.

Eight more bidding volleys between the two parties saw the price reach Park Lane's final bid of $1.3 million.

The winning bid was met with a thunderous round of applause from the interested spectators.

"Was I nervous at $300,000? Absolutely," Cunningham said. "But I thought if I could get it (the bidding) going, I could get the price to somewhere between $1 million and $2 million."