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

After more chapters than a Charles Dickens novel, the latest installment on the mothballed Statler Towers is expected to be written in the next few days.

And this time local leaders hope there is a happy ending.

The latest bids for the Buffalo landmark are due Aug. 27, with a hearing and potential sale date set for Aug. 30 in the U.S. Trustees Office and, two hours later, in U.S. Bankruptcy Court. The bidding is open to any individual or group who makes a $100,000 deposit to the bankruptcy court-appointed trustee, Amherst attorney Morris Horwitz, or his special counsel, Hodgson Russ LLP partner Garry Graber. Bidders also must have at least $1.5 million available immediately for emergency repairs to the building.

After the hearing and sale, bidders have a 60-day due diligence period in which to opt out. The hearing and sale also are subject to an appeals period from jilted bidders, if there are any.

Thus far, just one group - headed by Buffalo restaurateur Mark Croce and businessman James Eagan - has made a deposit. They are leading an investment group that offered to buy the Statler for $200,000, plus a payment of nearly $500,000 to cover unpaid taxes.

"They (Croce and Eagan) are the ones that triggered this," Horwitz said.

Earlier this month, they gave Horwitz and Graber a $100,000 deposit.

While both are mum about their plans, real estate sources have said the investment group is planning a mixed-use development that will take shape over a period of years. Central to their plan is a multi-level parking garage, slated for a parcel at South Elmwood Avenue and West Mohawk Street that Croce owns. Sen. Charles Schumer secured $3 million in seed money for the garage. Other public-sector dollars may come in, as well.

Parking that is nearby and plentiful is a key issue connected to any Statler redevelopment effort.

"We're just taking this all one step at a time," said Robert Fine, Eagan's attorney and chairman of Hurwitz Fine P.C. "Our focus right now is on next Monday (the Aug. 30 hearing and sale)."

The bidding and possible sale date comes 54 weeks after a court-mandated sale took place and the Statler apparently was sold for $1.3 million to a trio of Buffalo area investors. They ultimately failed to close on the bid and were declared in default. The Statler was mothballed in January.

"The building is unique architecturally and certainly very grand looking," said Buffalo Mayor Byron Brown.

But it also is fraught with structural issues.

Estimates in court testimony delivered in spring 2009 pegged emergency repairs in the $5 million to $6 million range. Since then, portions of the sidewalk around the Statler, as well as sections of Delaware Avenue and Genesee Street, were closed off as pieces of the facade tumbled to the ground.

Whoever buys the building will be taking on an expensive renovation project.

"The building is very, very difficult," said developer Gerald Buchheit, who owned the Statler for 15 years before selling it to London investor Bashar Issa. "Let's face it, the Statler was built to be an 1,100-room hotel in the 1920s. It's hard to make it work by today's standards. Lord knows, we tried everything to make it work."

He sold the Statler to Issa's BSC Buffalo Development LLC in 2006. Issa proposed a series of grandiose renovations. But financial and legal issues in Buffalo and Manchester, England, halted his Statler plan.

The building was placed in involuntary Chapter 11 protection in April 2009 by U.S. Bankruptcy Court, Western Division, Chief Justice Carl Bucki.

Last summer's auction attracted attention but only five registered bidders. Two ended up bidding on the building.

New Buffalo - a group led by Park Lane Catering founder William Koessler, developer Richard Sterben and businessman Tom Zawadzki - proposed a $100 million project that included a mix of hotel, apartments, restaurants, office and a jazz club. Park Lane Catering was the Statler's anchor tenant.

Sterben is a broker representing a Los Angeles-based group, My Dynasty Real Estate Investments LLC, which expressed interest in making a bid. As of Aug. 24, however, My Dynasty had not submitted the $100,000 pre-bidding deposit or met any of the other conditions spelled out by Bucki's court order.

Horwitz said he and Graber reached out to those who toured the Statler last summer to see if they were interested in bidding again for the landmark. As of Aug. 24, none did.