|By Denise Jewell Gee, The Buffalo News,
N.Y.McClatchy-Tribune Regional News
Jan. 17, 2008 - NIAGARA FALLS -- The owner of a Buffalo Avenue hotel overlooking the Niagara River rapids called off a public auction for the property Wednesday to negotiate privately with several interested buyers.
Bidding on the 197-room Fallside Hotel and Conference Center had been slated to begin at $3.5 million when the auctioneer announced that the auction had been called off so a sale could be worked out during private meetings Wednesday afternoon.
Auctioneer Gordon J. Greene of the Cleveland-based Chartwell Group said he expected a deal to be reached soon with a "major hotel group" for the "repositioning and redevelopment" of the site.
"We have participants that are extremely well capitalized that are willing by the end of the week to move forward," Greene told about 20 people gathered for the auction Wednesday afternoon.
The four-story hotel is on a 3.8-acre parcel between Buffalo Avenue and the Robert Moses Parkway, at the entrance of the Niagara Falls State Park. It was constructed in 1956 and expanded in 1963.
The hotel's once-popular restaurant and banquet facilities drew a local crowd in the 1960s, but the restaurant has operated only on a limited basis in recent years.
The current occupancy rate at the hotel is 29.5 percent, according to auction materials.
Hotel occupancy rates in Niagara Falls plunge during winter months when the tourist season ends.
"This market is a micro- cosm," said Tom Zawadzki, president of the hotel and hospitality division of Cobblestone Financial Group in Fairport. "This has more seasonality than other areas."
The Fallside Hotel operated as a Days Inn in recent years until GE Capital Corp. acquired the building through foreclosure. GE Capital sold the hotel to its current owners, Niagara Hospitalities LLC, in December 2005 for $3.3 million, according to city records.
Wednesday was the second time a public auction for the hotel was called off. The property was first scheduled to be sold at auction in November, but that event was postponed after potential buyers expressed interest in a nearby 2.36-acre parcel of vacant land.
The owner had planned to offer the vacant parcel to the highest bidder for $990,000, according to the auction terms.
The hotel auction would have been the second in Niagara Falls in the last six months. The 12-story former Hotel Niagara on Rainbow Boulevard sold for $4.6 million in July.
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