By JAMES FINK
Business First

The mothballing of downtown Buffalo's Statler Towers is proceeding, despite a last-minute plea from preservationists and the building's sole remaining tenant to keep the historic landmark open.

At the same time, downstate developer Uri Kaufman, who has tackled preservation projects with historic properties in the Albany area, has renewed his interest in buying the Statler.

Kaufman confirmed Tuesday afternoon that he has presented a letter of intent to U.S. Bankruptcy Court Trustee Morris Horwitz and his special counsel, Hodgson Russ LLP's Garry Graber. Kaufman is one of several out-of-town developers who have considered purchasing the Statler.

Kaufman said he is waiting for comments and legal paperwork back from Graber and Horwitz and will present a formal offer after he gets that information.

"I'm very anxious and want to do something with (the Statler)," Kaufman said. "I have a lot of big plans for that property."

Last spring, Kaufman said he was considering using the bulk of the 18-story, nearly-900,000-square-foot building as a residential project with as many as 500 loft-style apartments developed over a period of time.

"I see this as another Harmony Mills (a large Capital District project Kaufman is just completing) and I am looking forward to a ground-breaking in Buffalo," he said.

Horwitz said negotiations are underway, though he remains cautious.

"We are actively seeking offers, but it needs to be a reasonable sum," he said.

Any offer must include paying the estimated $300,000 that is owed in back county and city taxes.

U.S. Bankruptcy Court Judge Hon. Carl Bucki Tuesday ordered that the building be shuttered until a buyer can be found.

The last of the Statler's 15 office tenants moved out last weekend. The building's anchor tenant, Park Lane Catering, held a wedding reception there Friday, but has no other events planned until February. Park Lane's attorney, Justin White, had hoped his client could remain in the building but Bucki denied the request, citing safety concerns.

The mothballing, or shutdown process, began Monday and should be completed in the next 10 days. Water, heat and electric service to the building are being dropped.

Leaving basic services in the building, as local preservationists had asked, would be expensive and could lead to more structural damage, he noted.

"One set of frozen pipes bursting in the building, and it may be beyond the point of restoration," Bucki said.

Horwitz agreed.

"This isn't about setting a thermostat to 48 degrees and hoping for the best," Horwitz said.

Still, Stephen Yonaty, representing Preservation Buffalo Niagara, contended that the building's utilities should remain on. Doing so would make it more viable to potential buyers, he said.

Shutting down the ultilities, he argued, "could jeopardize the resale value.

"It doesn't appear all the options were considered before they came to this conclusion," Yonaty said.

Operating the Statler has cost $47,000 in the last few weeks, with the funds coming from "good faith" deposits made by New Buffalo Statler Redevelopment LLC - the group that bid $1.3 million for the building in August, but failed to close on the deal. New Buffalo Statler Redevelopment made $500,000 in good-faith payments.

Mothballing will use at least another $41,000, with other costs still pending.

The building is now considered closed to the general public, Graber said.

White said his client is still holding out slim hope that New Buffalo can close the deal. William Koessler, who owns Park Lane Catering, is one of the group's principals.

"My client is holding his breath," White said.

Horwitz said the Statler will remain closed until a new buyer can be found.

"What the Statler needs is a developer to step forward, not public sentiment," Horwitz said. "There are no purchase offers for the property. We will work hard to find a developer or promoter, but what ultimately happens to the building is a great unknown."