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

A negotiating frenzy in recent weeks has cleared the way for restaurateur Mark Croce to acquire the mothballed Statler Towers.

The deal, which has been in the works since summer, passed a milestone July 20 when Croce's Statler City LLC said it will purchase the 18-story Buffalo landmark, contingent on waivers being issued from four taxing jurisdictions that remove certain financial burdens from the court-appointed estate overseeing the complex Statler transaction.

The deal was announced during a U.S. Bankruptcy Court review session and goes a long way toward securing the future of the historic building that overlooks Niagara Square.

"This has evolved over time," said Henry McCartney, Preservation Buffalo Niagara executive director. "It is very positive for the city that this is happening."

Waivers are due from the Buffalo Common Council, Erie County Legislature, Buffalo Water Authority and Buffalo Sewer Authority within a month. Many are already in process.

The waivers do not remove more than $400,000 in accrued back taxes concerning the Statler that will have to be paid. They do, however, remain the Statler's U.S. Bankruptcy Court-appointed estate from being liable for those funds.

Once the waivers are secured, Statler City is expected to close on the deal by late March. It will pay the bankruptcy estate $200,000 for the building and must work out a payment plan for the accrued back taxes, interest and other-related charges. The money will be used to pay off a lengthy list of creditors.

"If this deal is not put together, there will be nothing left (in the Statler estate) for the non-municipalities," warned U.S. Bankruptcy Court Judge Carl Bucki, who is overseeing the case. "There is a fair level of optimism that this will all work out."

Croce, through Statler City, is planning to renovate the lobby and mezzanine for a restaurant and catering operation. The remaining floors will be developed based on future market conditions.

The deal, for now, ends speculation that others might step in and make an offer for the Statler.

Albany developer Uri Kaufman, who first looked at the building two years, had expressed interest.

"He continued to show interest, even as late as this morning," said Morris Horwitz, the court-appointed trustee.

Horwitz said the key to the deal is securing the waivers.

"The waivers lock the deal," he said. "After that, it is merely a matter of setting the closing date."

Croce received a warm response from the Buffalo Common Council when he met with members Jan. 19 to discuss the deal. The council may consider the waiver request as early as its Jan. 25 meeting.

Erie County Executive Chris Collins has been equally receptive and plans to submit a waiver request to the Erie County Legislature.

"By the end of March, I expect that Statler City LLC will be the owner of the Statler," Horwitz said.

Still, Croce is working with local officials to secure $5.3 million in funds to handle emergency repairs to the building, including much-needed shoring up of its terra-cotta facade. Those talks are ongoing.