“Buy low, sell high.”
In the world of private investment, this time honored maxim – more than a century old and still used by brilliant business minds such as that of Warren Buffet – has been as good as gold.
But the brilliant business minds currently controlling both New York State and Niagara Falls, Mayor Paul Dyster and Gov. Andrew Cuomo, seem to think Mr. Buffet and generations of business people before him have it backwards.
“Buy high and sell low,” they say. “And the future prosperity of the city will be assured.”
The most recent example of this is the derelict old Hotel Niagara on Rainbow Boulevard, closed since 2007 and the subject of numerous “revitalization” efforts ever since. Using money from the state’s scandal plagued Buffalo Billion economic development program, the state bought out former owner Harry Stinson for $4.4 million in March, 2016.
Now it’s been sold to a guy from Syracuse named Ed Riley for one dollar.
That’s right, Mr. Cuomo thinks it makes business sense to take a loss of $4,399,000 of taxpayer money with the vague hope that, once again, the old hotel will reopen.
And that’s not all.
Mr. Riley’s company, Brine Wells Development, is expected to receive $3.5 million in direct incentives, and will seek state and federal historic preservation tax credits.
The Hotel Niagara was added to the National Register of Historic Places in 2008, the year after it closed.
“The Hotel Niagara was a beautiful place, representing the beauty and the grandeur and the strength of Niagara Falls,” Gov. Cuomo said during his visit to the hotel. “And then it fell into disrepair, and it sat. And now it’s coming back to life. And it’s coming back to life in a modern version, but with all the beauty of that history.
“The Hotel Niagara is a beautiful metaphor for all of us,” he continued. “It is a monument to what was, to the grandeur of what was when Niagara was in its heyday. Connected to the community, a destination hotel, not just a hotel for out-of-town visitors, but a hotel for the community. That’s where you wanted to get married, that’s where you wanted to go to your prom, that’s where you wanted to go on a first date.”
Whether or not Gov. Cuomo actually took his first date to a hotel is uncertain.
Mr. Riley’s previous claim to fame was the by all accounts successful refurbishment of the hotel Syracuse, which was seized by the city of Syracuse and flipped back to him in record time.
In that case, Mr. Riley paid just $500,000 of his own money toward the $1.6 million to buy the hotel from the city. The rest was reimbursed by a state grant.
“I have seen this movie before, because I have seen what Ed Riley did to the Hotel Syracuse,” Mr. Cuomo said. “He did a magnificent, magnificent job at the Hotel Syracuse, and that’s why we’re so excited he’s taken on this project.”
The redundancy of this last sentence has us thinking he must be taking lessons in rhetoric from Donald Trump.
The project is supposed to cost $42 million, though, if the recent history of other publicly funded projects in Niagara Falls is any indication, it will end up costing much more. The north Main Street Public Safety Building, the Whirlpool Street Amtrak station and, in particular, Mark Hamister’s nondescript Hyatt Place hotel downtown – which should have cost $18 million but is now tagged at $36 million – are but a few sad examples.
Gov. Cuomo looks like he just saw a ghost lurking in a corner of the dilapidated Hotel Niagara, as if guest-starring for some kind of Paranormal Preservationist cable TV show. The real horrorshow, however, is reserved for New York taxpayers, who are taking a $4.4 million hit as Ed Riley (left) of Brine Wells Development, LLC. is coming in to the historic property for $1. Mayor Dyster, and Howard Zemsky of ESD (right) join in the celebration of yet another batch of excess hotel rooms planned for or already built in downtown Niagara Falls.
Still, Francine DelMonte, a 10-year veteran of the state Assembly prior to being humiliated by John Accardo in the 2010 Democratic primary here, who later got a patronage job as head of the state run USA Niagara Development, said she was happy.
“It’ll be nice to see that property brought back to life,” said Ms. DelMonte. “There’s a lot of people who remember it in its heyday and people who have seen it lay dormant for so many years.”
Also squealing with delight was John Percy, another parasite who lives off your tax dollars. He claims to have stayed at the Hotel Syracuse.
“(Riley) did not miss one attention to detail,” said Mr. Percy, president of Destination Niagara USA, the Niagara County tourism promotion agency. “He did a phenomenal job, and I welcome him as the preferred developer, because out of all the people that have been talked about before, I believe Mr. Riley will get this project done.”
The hotel was built by businessman Frank Dudley between 1923 and 1925 and operated by the United Hotels Company. The 12 story, steel frame and concrete hotel was designed by Buffalo architects Esenwein and Johnson. It has been known by various names over the years, including the Hotel Niagara; John’s Niagara Hotel; Park’s Inn; International; Days Inn-Falls View; andTravelodge Niagara Falls.
The hotel’s primary public rooms, including the lobby, ballroom and main dining room, as of March, 2016, have survived largely intact. They feature elaborate ceiling plaster moldings and columns, gilded capitals, faux limestone walls, oak and emerald terrazzo floors.
The building was condemned by the Niagara Falls Department of Code Enforcement in 2007 after the heating system failed, which caused water pipes in the building to burst. The city shut off the water when that happened, leaving the building without running water or a functional fire sprinkler system, which constitutes several code violations.
The building was bought by Mr. Stinson for an undisclosed amount in 2011, although the amount wasn’t likely much higher than the $1.25 million the previous owner, Canadian Jamil Kara, paid for it. Property values in Niagara Falls have not increased in recent years, they’ve declined.
Now, thanks to Gov. Cuomo, you and other New York taxpayers have paid $4.4 million for it, only to have it given away.
Four recent studies have shown that the $8 billion the governor spends annually on economic development is largely wasted (See related story). This is just the most recent example.
“Buy high and sell low.”
It’s become Gov. Cuomo’s motto in a state where up is down and down is up.