By JAMES FINK
jfink@bizjournals.com | 716-541-1611

Whoever buys the mothballed Statler Towers is acquiring more than just an 18-story structure that dominates the Buffalo skyline.

They will be buying history, architecture, a legacy and prestige.

And they are purchasing a building with an expensive renovation price tag, including as much as $6 million in immediate, mandated repairs and a possible $20 million in costs before the restoration work even begins. Restoration costs, no matter who is talking, approach $100 million.

Is it worth the risk and investment?

At least one group thinks so. It's headed by restaurateur/civic leader Mark Croce and businessman James Eagan, who will bid on the Statler later this month when it goes back up for a U.S. Bankruptcy Court-sanctioned sale.

"This is an important building," said Croce's attorney, Robert Knoerr. "It is important to the community; it is important to my clients."

The partnership is offering $200,000, plus back taxes - bringing the offer to $700,000.

Los Angeles-based My Dynasty Real Estate LLC, meanehile, may bid $250,000, plus the back taxes. That's assuming the group passes pre-sale due diligence.

A year ago, a court-ordered foreclosure sale brought in a $1.3 million bid for a building that had minimal occupancy. But New Buffalo Statler Redevelopment LLC defaulted last winter after paying just $500,000. The Statler was ordered closed following the default by U.S. Bankruptcy Court Judge Carl Bucki.

The fact that there are at least two interested groups is encouraging, said Buffalo Mayor Byron Brown.

"Interest always breeds additional interest," he said. "Now that people see someone like Mark Croce, with his track record, they are starting to show a renewed interest."

Would-be bidders have until Aug. 27 to submit their interest, along with a $100,000 deposit, to court-appointed trustee Morris Horwitz and special counsel Garry Graber, a partner in Hodgson Russ LLP. The bidding will take place Aug. 30.

Buffalo architect Clinton Brown, a leader in the local historic-preservation community, said the 89-year-old, nearly 800,000-square-foot Statler is worth the expense.

"It is the Holy Grail," he said.

The hotel was constructed in 1921 by hotel baron Ellsworth Statler and was the signature building in his portfolio for many years.

In its heyday through the late 1960s, it was the downtown hotel where the likes of John F. Kennedy, Elvis Presley and Richard Nixon stayed.

"One could argue the building still has an allure," Clinton Brown said. "That allure is very irresistible to a lot of people. Buying requires a mix of business pragmatism and personal quest."

History aside, the Statler had a checkered ownership record in recent years, culminating in the involuntary Chapter 11 protection that Bucki imposed in April 2009 as the result of legal and financial troubles of its owner, British investor Bashar Issa, and his BSC Development Buffalo LLC.

While Croce and Eagan are tight-lipped about their plans, sources said they are considering a long-term, multiuse project. The building will be renovated floor by floor for a mix of apartments, offices, restaurant/retail and, perhaps, a boutique hotel.

One advantage for Croce is that he owns the nearby surface parking lot at the corner of South Elmwood Avenue and Mohawk Street, which services the Statler. Plans to build a multilevel parking ramp on that site moved forward in July when Sen. Charles Schumer secured $3 million in federal seed money. Mayor Brown said he is lobbying for more state and federal aid for the project. Croce owning the Statler would help those efforts.

"The parking lot is the key to any sort of success with the Statler," Clinton Brown said. "That is the key that unlocks the door to make any plan work."

My Dynasty is negotiating with Cleveland developer John Ferchill, who considered buying the Statler during the past year, according to documents filed with U.S. Bankruptcy Court. My Dynasty and Ferchill are considering a multiuse redevelopment that would include a 235-room hotel and 111 apartments, plus an office and restaurant/retail component. Ferchill has tackled expensive renovation projects in the past, including conversion of the former Book Cadillac Hotel in Detroit to the Westin Book Cadillac Hotel.

He did not respond to a request for an interview.

The development price tag could be between $85 million and $100 million, said Richard Sterben, president of New York Corporate Realty. He is brokering the deal.

"The key is to have a major developer that gives credibility to the project," Sterben said.

He was one of three principals in New Buffalo Statler Redevelopment LLC, which submitted a bid last summer but defaulted when it failed to close the deal, despite four extensions.

Sterben said he is merely the broker and has no interest in the My Dynasty group.

Graber, meanwhile, said any bidders must show they have enough money to close the deal.

Following Bucki's hearing, there will be a 15-day appeals process followed by a projected 60-day closing window. Only those who qualify to bid could file an appeal.

"The universe of who could appeal is very limited," Graber said.

He and Horwitz warned that if a buyer for the Statler is not found, they may seek Bucki's approval to abandon the property - a move that would turn it over to the City of Buffalo.

"This may well be the last shot for someone to buy this," Graber said.

If that happens and the building becomes a real estate asset of the City of Buffalo, it would likely be put up for sale in an in rem auction. That would further cloud the future of a structure that is considered an architectural landmark.

"The deteriorating condition of the building is distressing," Clinton Brown said. "But it was so well-built that it may take a long time and period of deterioration before the Statler, physically, reaches that point of no return."