By JAMES FINK
Business First

Despite assurances that the final $850,000 would be delivered by a court-imposed deadline of Monday afternoon, prospective buyers of downtown Buffalo's Statler Towers failed to meet that goal.

That puts New Buffalo Statler Redevelopment LLC's bid in jeopardy and casts a shadow over the future of the Niagara Square landmark. Closing funds of approximately $563,000 were due to a court-appointed trustee, along with proof that nearly $300,000 in back taxes was paid.

Buffalo attorney David Pfalzgraf Jr., who represents Park Lane Catering, said he has had discussions with the Statler's court-appointed trustee, Amherst attorney Morris Horwitz, and his special counsel, Hodgson Russ LLP partner Garry Graber, seeking a two-week extension. Pfalzgraf said the extra time is needed to secure not only the remaining closing funds, but also monies to move a planned $100 million renovation project forward.

"I haven't given up yet," Pfalzgraf said. "The group hasn't given up yet. We've made tremendous progress. We are this close to the finish line."

William Koessler, one of New Buffalo Statler Redevelopment's partners, said Tuesday he's confident that the funds are available.

"I don't have any reason to doubt that," Koessler,who owns and operates Park Lane Catering - one of the few remaining tenants in the Statler - said late Monday night.

Others are skeptical.

The closing has twice been delayed since the Aug. 12 auction, mandated by a U.S. Bankruptcy Court judge, of the 18-story building. New Buffalo bid $1.3 million and said its $100 million redevelopment plans include bringing a brand-name hotel along with some apartments, office space, restaurants and a jazz club to the building - all anchored by the Park Lane Catering operations off the main lobby.

"You never want to say never," Graber said. "But at this point in time, the trustee is under no obligation to complete the transaction."

The Nov. 30 deadline set a month ago by U.S. Bankruptcy Court Judge Carl Bucki was widely viewed as the final opportunity to close the transaction.

New Buffalo has already invested more than $500,000 in good-faith advance payments toward the $1.3 million bid price. It has also been paying the building's carrying costs since early September - approximately $12,000 per week.

Horwitz and Graber were seeking a status conference before Bucki, but one had not been scheduled as of midday Wednesday.

Possible options from here include offering New Buffalo another extension, reauctioning the building or closing it down and mothballing the structure for a future sale or auction.

Horwitz did say he considers New Buffalo Statler Redevelopment in default.

"We will consider several options and then report to the judge," Horwitz said.

The Statler was placed into involuntary Chapter 11 by Bucki this spring as its owner, BSC Development Buffalo LLC and principal British investor Bashar Issa, faced legal and financial difficulties in both Buffalo and Manchester, England.