New hotel deal marks continued state investment in Niagara Falls tourism

Albany is again getting into the hotel business in Niagara Falls.

USA Niagara Development Corp., a subsidiary of Empire State Development that oversees economic development efforts in downtown Niagara Falls, will buy the Hotel Niagara, a historic building just a few blocks from the state park that abuts the famous waterfalls, for about $4 million.

The agency’s board of directors approved the purchase Wednesday afternoon and USA Niagara will soon take control of the near-century old, 12-story landmark with the intention of issuing a request for proposals for a private developer to come in and renovate the 145,000-square-foot former hotel. The board’s action will set aside $5 million of Buffalo Billion initiative funds for the transaction.

Chris Schoepflin, the regional director of Empire State Development’s Western New York office and former USA Niagara president, said that the long-vacant hotel’s significance as one of the few buildings that was not destroyed to make way for urban renewal projects and its history of hosting presidents and celebrities makes it a potential asset as the state works to help Niagara Falls regain its footing as a world-class tourist destination.

“It represents our history and our heritage and, I think, should play a productive and significant role in the city’s future,” Schoepflin said.

The Hotel Niagara building is just the latest in a string of investments the state has made in hospitality and tourism developments in recent years, including a Doubletree by Hilton and a Hyatt Place, two projects that have seen significant delays related to the developers’ ability to secure financing.

Still, a number of hotels have completed or begun construction over the past few years, including the Doubletree, and more are planned.

In the summer of 2014, Gov. Andrew Cuomo visited the city to announce Uniland Development as the preferred developer on a $150 million hotel and entertainment complex, the largest development project in the city since the Seneca Niagara Casino and Resort was erected in 2001.

As a result of today’s board vote, the USA Niagara will purchase the Hotel Niagara building from JSK International Corporation, a company owned by Canadian developer Harry Stinson, who has become the latest in a long line of developers to try and fail to successfully renovate the large and weathered building.

Schoepflin said that the profile of the Hotel Niagara project and the historic tax credits - the building is already on the national register of historic places - will make financing feasible, despite some of the troubles that other developers have had over the years.

“The tax credits could represent almost up to a third of what it would require, from a capital perspective, to bring the building to proper restoration and operation,” Schoepflin said. That’s a significant existing benefit.”

Schoepflin said Stinson did what he could and had a good vision for the building, but because he was ultimately unable to raise the capital necessary for such an ambitious project it was time for the state to step in.

“I think that the state’s move here to unencumber the building after many, many years of patience, is to go out and see how the marketplace might respond,” Schoepflin said.

Schoepflin said that with a critical mass of hotels either under construction or planned in Niagara Falls the state felt comfortable making the move to try to get something going at the building.

“We thought this was a prudent time in the cycle of redevelopment here to be more aggressive than we have normally been as a matter of course,” he said.