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

Mark Croce's bid to purchase the mothballed Statler Towers has taken a step closer to reality.

His attempt to buy the 18-story Buffalo landmark moved forward when U.S. Bankruptcy Court Carl Bucki agreed to give lawyers two more weeks to secure the necessary paperwork to close the high-profile deal.

Bucki set a March 9 hearing, with the transaction expected to close a few days after the court session.

The new date was set during a nearly two-hour hearing conducted Tuesday afternoon by Bucki.

"We're only one document away that needs to be signed," said Garry Graber, a partner in Hodgson Russ and special counsel to court-appointed trustee Morris Horwitz.

The document is a waiver from the City of Buffalo regarding back taxes owed on the building. Croce has agreed to pay the taxes, but at a later, still-to-be-determined date.

"It's just standard documentation," Graber said. "It's nothing special."

Bucki's actions came as Horwitz and Graber received a pair of last-minute offers for Statler Towers. They were for more than Croce offered, along with an agreement to pay all back taxes at closing.

One bid came from Albany-area developer Uri Kaufman, who is proposing a $60 million transformation of the Statler. The other, according to local real estate broker Richard Sterben, was from Westchester County real estate investor Philip Ruethven. Kaufman offered $250,000, $50,000 more than Croce's bid. Ruethven's offer, according to Sterben, was for $300,000.

Both were rejected by Horwitz and Graber.

"The trustee was contractually bound to Mark Croce and he was morally bound," Graber said. "It's not that the trustee is opposed to receiving more money (for the Statler); it's just that he feels committed to the Croce deal."

Croce's bid was accepted last summer by Horwitz, Graber and Bucki following a court-mandated auction.

U.S. Trustee Joseph Allen agreed with Graber's assessment.

"It would have been nice if some of these offers were made before the auction was complete," Allen said.

J. Eric Charlton, partner in Hiscock & Barclay and Kaufman's attorney, attributed the delay to improving market conditions and the availability of state historic tax credits.

"The market is different now," Charlton said. "We made a good, stalking horse offer with no conditions attached."

Kaufman said he was disappointed that his offer was rejected but said he still wants to tackle a Buffalo-area project.

"I'm on to my next deal in Buffalo," he said. "But if Croce chooses not to close on the Statler, we'll look at it."

He expressed interest in something having to do with the Central Terminal on Buffalo's East Side or the H.H. Richardson Towers near Buffalo State College. A separate agency is already working on a development plan for the Richardson complex.

Croce, through his Statler City LLC affiliate, has been working with Graber and Horwitz since July. The building has been under contract to Statler City LLC since then.

Croce wants to renovate the Statler's mezzanine and lobby for a restaurant and catering operation. He said he would let future market conditions determine what happens with the upper floors.

Buffalo has pledged $5.3 million to help finance emergency repairs to the Statler, provided Croce fine-tunes his business plan.

His attorney, Robert Knoer, said his client has invested more than $400,000 in the Statler acquisition. Knoer said he hopes to close on the deal within three weeks.

"It is more expensive for us not to close than to close," Knoer said.

As for the waivers sought by Croce, support has already been received by the Buffalo Common Council, the Buffalo Fiscal Stability Authority, Buffalo Water Authority, Erie County Legislature, Erie County Executive Chris Collins and Buffalo Water Board.

Formal documentation for all has been received or is in the works, according to Graber and Knoer.

"The boards have already spoken," Graber said.