Contract Raises Many Questions;
Potential Hotels Not So Upscale
By Frank Parlato
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| Rendering of Hamister Hotel |
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| Doubletree by Hilton |
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| Hilton Garden Inn |
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| Courtyard Rendering of Hamister Hotel Doubletree by Hilton Hilton Garden Inn by Marriott |
The contract between USA Niagara Development Corporation, the city of Niagara Falls and "HH 310, LLC," a new company which Mark Hamister has formed, is suspicious to say the least.
The City owns the property at 310 Rainbow Boulevard and the agreement calls for Hamister to develop the property with an "upscale hotel" containing "at least 100 rooms," 24 rental apartments, 5,000 square feet of retail space and a 5,000 square foot meeting room.
But in the contract, upscale hotel is defined "as a Courtyard by Marriott, Renaissance by Marriott, Hilton Garden Inn, Hyatt Place, Hilton Doubletree, Springhill Suites by Marriott, or full-service Hilton, Marriott, Embassy Suites, or such other nationally recognized upscale hotel brand name as USAN and the City may approve in writing."
Upscale?
A Courtyard by Marriott, Hyatt Place or a Hilton Garden Inn are mid-priced business-oriented hotels, or, as they say in the hotel industry, an "upscale mid-priced hotel" with "limited service products."
DoubleTree is also a limited service mid-scale hotel known best for serving a large, warm chocolate chip cookie with walnuts to each guest at check-in. SpringHill Suites is aimed towards the upper-moderate-priced, "all-suite lodging segment" of the hotel industry.
So we aren’t getting an upscale hotel after all.
And are we even going to get a hotel?
We may not know for more than a year because of contingency clauses that give Hamister time to find the money, design the hotel, get one of the "upscale" franchises or perhaps do something else.
The "First Contingency Period" is up to 91 days.
The "Second Contingency Period" is another 240 days. Then the "Developer's Right to Extend the Second Contingency Period" adds 120 days.
Hamister has 451 days (one year and almost three months) to decide if he is willing and able to build a hotel.
That takes us to spring of 2015.
But there is more: An "Automatic Extension of Second Contingency Period Under Certain Circumstances."
These circumstances revolve around the present tenant of the property, who pays $27,000 per year to the city and parks cars during the summer on an unpaved and out-of-code compliance lot. The tenant is a company, owned by John Guido and Debbie Guido, called JD Gifts.
While the Guido's pay $27,000 per season, they gross about $500,000 per year on the city-owned lot by parking cars in the closest lot to the Niagara Falls state park outside the park itself.
While the Guido's rental agreement with the city clearly states, under the section entitled "termination rights," that the city "may terminate the agreement with 30 days written notice if (city or its assign) intends to build a structure for which it received a building permit for and needs access to the premises," for some reason the city is anticipating that Guido will give them a hard time and not stop parking cars on the city-owned property.
The lease with Guido was designed knowing that it would be temporary - and the city did not require the Guidos to pave the lot - and that it was to be in force only until the city and USA Niagara had a plan to develop it.
That was the deal and everyone, including Guido, knew it.
The only reason he was allowed on the lot was because he was a temporary tenant and the minute USA Niagara had a developer ready to build, Guido had to stop parking cars within 30 days on the unpaved lot.
But now, the Hamister contract says, if Guido doesn’t stop parking cars when a building permit is filed, the Hamister contract is automatically extended for another 18 months, taking us to the middle of 2016.
At that point, if Guido still doesn't stop parking cars on the unpaved, illegal parking lot, Hamister is then granted another six months (called a Further Extension), taking us to 2017.
Despite the Guido contract saying they have to stop parking cars 30 days after a building permit is filed, the Hamister contract anticipates it may take years to remove Guido from the gravel lot.
Now, consider, if the city, USA Niagara and Hamister were really serious about building a hotel, could Guido really hold out?
The Guidos would be called public villains if they failed to stop parking cars and killed or delayed this hotel deal.
Yet the Hamister contract strangely says that if Guido fights in court, and somehow Hamister loses his financing, or his upscale hotel franchise, because of the delay in getting Guido off land the city owns and by contract can remove in 30 days if anybody files a building permit, then Hamister can cancel the deal and get reimbursed for up to $780,000, or allow the city or USA Niagara to borrow money for Hamister and co-sign for him and help him build the hotel.
All of this kicks in if Guido, who hasn't a leg to stand on, suddenly decides to fight the city
If readers recall the way the media attacked Councilman Sam Fruscione for holding up the Hamister deal, you can imagine how Guido, whose lot is not even legal, since it is unpaved, and does not have proper handicapped spaces, and has no permanent structure, would be crucified in the press.
The Guidos signed a contract that they would stop parking cars in 30 days if the city or Hamister or anyone filed a building permit.
If they did not honor that, the media would attack the Guidos and no judge would allow Guido to stop a $25 million deal.
In fact, Guido expressed surprise when contacted by the Niagara Falls Reporter, since he said he thought that once Hamister was ready to build, they would have to stop parking cars on the gravel lot. Guido knew a deal is a deal.
But Guido said City Attorney Craig Johnson contacted his attorney and told him he could probably fight the city and wanted to know "how much money it would take" to buy Guido out.
Guido, and one of his partners, expressed absolute surprise at this to this writer because after all, if someone files a building permit, their contract says they have to stop parking cars and let Hamister build his hotel.
There is something rotten in Denmark. I don’t blame Guido for wanting to make some money on this. He is apparently being propped up to help Hamister in some fashion.
Finally, in the Hamister contract, there is no union requirement and no local labor requirement. It is merely suggested, not required. If he hired all out of town workers, he could not be penalized in any way- that is if the hotel is ever built.
The Developer can also request permission from the City and USAN to assign to someone else the $2.75 million USAN grant he will get.
We called this from the start.
At the end of the day, we will be saying like we did with the Holiday Market, "I told you so."