BY TONY FARINA
According to informed sources in the Buffalo development community, Mark Hamister is about $6 million short of the mark in financing for his much-hyped $35.7 million Niagara Falls hotel project on Rainbow Blvd. that was trumpeted by state and local officials more than three years ago as the city’s best hope to revive downtown.
State and local officials only talk about the long-delayed project in short clips, hinting something may happen soon. Nothing has, and there’s no sign of development activity at the prime parcel at 310 Rainbow Blvd. Now, according to our sources, Hamister is looking for more state help in the already heavily taxpayer subsidized project for the $6 million he needs to close the deal, money that in fact would amount to his own investment in the project which he apparently doesn’t have available. Sources suggest part of the problem is the $35.7 million he wants to finance for a Hyatt Place many see as a $19 million projet.
The Hamister hotel story is shrouded in secrecy with none of the key parties, including Hamister, willing to talk about why the project is so far behind schedule that Canadian developer Michael DiCienzo has called for the city and state to void the deal and award development rights to his company, Niagara Falls New York Hotel Management, LLC, so that work could begin soon.
But despite the nearly four-year delay and no sign of anything happening on the Hamister front, state and local officials cling stubbornly to the politically-connected Hamister who was awarded the development rights in a secretive RFP process that required bidders to have the financial resources to complete the deal. Somehow, Hamister won the rights despite the fact he obviously did not have the financing in place while others, who may have been ready to move forward, were passed over.
As I reported last month, DiCienzo, the Canadian developer with a string of successes on both sides of the border, called the failure of the Hamister project “a complete joke,” and Niagara Falls Council Chairman Andrew Touma also expressed frustration, saying the lack of progress “is very disappointing.” But nothing changes and the Niagara County Industrial Development Agency (IDA) added to the “:joke” last month by granting Hamister a six-month extension on the $4.25 million in tax breaks even after the Hamister group told the IDA that it has yet to arrange financing. The state has committed a $3.9 million grant (taxpayer money) to the Hamister Group, but despite all the public help, the project remains in limbo.
DiCienzo, whose family has reportedly spent $800 million on development on the Canadian side and is now heavily invested on the U. S. side, upgrading the Holiday Inn to a Sheraton ($34 million), says he’s ready to go to work on the Rainbow Blvd. site if the city tosses Hamister and gives him the green light. And he’s not alone. A Buffalo developer, speaking on the condition of anonymity, tells me that he knows of a group of investors ready to pony up $30 million in private money to develop the prime Niagara Falls project if the opportunity presents itself.
It all begs the question of what’s more important: holding on to the Hamister deal that so far as been an embarrassing disaster for its backers, or pulling the plug and finding developers who are ready to put a shovel into the ground and give downtown Niagara Falls a real development boost, maybe something more than a business hotel.
It is all reminiscent of the Hamister folly of 2002 when he and his partner were going to save the bankrupt Buffalo Sabres for the city by buying the team, only to back out when they couldn’t secure the public money they needed to complete the deal. Here we are again, 14 years later, with Hamister apparently not willing or able to put any of his own money into the Niagara Falls project and going hat in hand to the state for more taxpayer money. When will somebody finally blow the whistle on the failed project and turn it over to a developer who actually has the resources to do something at the prime site, something more than put up a sign that something is in the wind.