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

The $5.3 million in state dollars being sought for the Statler City restoration project makes sense, according to Erie County Executive Chris Collins.

On Tuesday morning, he defended the effort by Buffalo Mayor Byron Brown to use $5.3 million to help Mark Croce finance much-needed repairs to the 18-story former Statler Towers, now called Statler City. Last week, Brown made a pledge to help the building's new owner secure the  funds.

The money would come from a previously set aside $15 million pool that the Dormitory of the State of New York allocated to Buffalo for various projects. Critics say the money should be spent on public projects and not private sector-fueled economic development efforts.

Croce expects to employ more than 200 people in the Statler and is in the early phases of bringing the building back to life.

"Because of the unique nature of the building, I do support the mayor," Collins said.

Brown had Croce submit a detailed business plan for the Statler before agreeing to champion the request with the Dormitory Authority. Still, there are critics of the project, including the owner of one of downtown's largest real estate portfolios, developer Carl Paladino.

Paladino is asking groups such as Buffalo Place Inc. to consider passing resolutions requesting that Brown refrain from using Dormitory Authority funds for the Statler project. He and Croce sit on the Buffalo Place board of directors.

"This effort is just more of the continuing saga that inhibits downtown Buffalo development," Paladino said. "Private, non-parasitic developers cannot compete with properties that benefit from selective subsidies from our local or state governments. By giving Croce money to improve the Statler, he will have a competitive edge in setting rental rates and will be stealing tenants from other taxpaying properties in downtown Buffalo."

Croce plans on bringing a series of restaurants, nightclubs and special-event venues to the first three floors, as well as a portion of the 18th floor penthouse.

Development plans for the remainder of the building remain open-ended, depending on market conditions.

The Statler was in involuntary Chapter 11 protection and faced an uncertain future until it was bought by Croce earlier this year for $200,000.

As part of the deal, Croce agreed to pay  $500,000 in back taxes.

The building, which dates to 1923, is considered a national historic landmark and an architectural gem.

"I can understand why people may question putting public dollars into a privately owned building, but this is a very unique situation," Collins said.