City and state leaders promised a hotel to save downtown Niagara Falls if only Mark Hamister were treated kindly enough by taxpayers with a gift-wrapped, nearly free, prime downtown parcel at 310 Rainbow Blvd. at the entrance to the state park complete with $4.2 million in tax breaks and nearly $3 million of public assistance.
So what’s the Buffalo developer waiting for? When will ground finally be broken on what is now scheduled to be a Hyatt Place, even if that’s a far cry from what city and state leaders had been hyping in selling the deal to a wary public not long ago. It may not be what it was supposed to be, but something might be better for downtown than nothing, or in this case a parking lot.
But hold on a minute. After all the hype and months of redesign that ended up in a Hyatt Place (at least on the drawing board) as the “transformational” hotel, there’s still nothing going on at 310 Rainbow except cars being parked. And from what we’re hearing, a ground breaking may not be in the cards anytime soon.
Development sources are telling this newspaper that as recently as last week, Mark Hamister was looking for money to finance the project that city and state leaders had told city lawmakers they needed to approve the deal or else Hamister might leave town (even though he’s never been here). Among those delivering that message was Gov. Andrew Cuomo whose development agencies are all in on the Hamister deal although none of them are saying anything as the clock ticks towards who knows what.
Sources tell us that Hamister is looking to pull in $24 million from lenders on his nearly $36 million announced hotel price, much more than any reasonable lender would fork over for a 128-room Hyatt Place where the per-room based price would normally be about $135,000, not the elevated $285,000 pegged by Hamister.
We tried to reach the Hamister Group in downtown Buffalo about the elevated price but could not get a response to our phone call.
Research shows that property types like Staybridge Suites, Hampton Inn, and Hyatt Place are characterized by lower construction costs, lower labor costs and higher profit margins than those of full-service hotels. Their brand affiliations are described as important to lenders, enabling developers to secure construction funding primarily through existing relationships with regional or national banks.
Seems like a formula that would work for Hamister if his price was right and he had good local credit. Apparently, according to at least one lender, it is grossly exaggerated, perhaps twice the per-room cost it should be, and that may be his problem. But who knows, since neither Hamister nor the state will talk about what’s going on even though this deal was put together on the backs of taxpayers.
I guess we’ll just have to wait and see what happens at 310 Rainbow Blvd. later this summer and if Mayor Paul Dyster will be running for re-election with a shovel in the ground or with egg on his face.