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Wyndham Hotel Group May Put its Flag on Downtown Buffalo's Historic Statler Towers;
Doubts Remain About the 28-year-old Developer Bashar Issa's
 Corporate Financial Health
 
By Sharon Linstedt, The Buffalo News, N.Y.McClatchy-Tribune Regional News

Apr. 29, 2008 - Stalled efforts to bring the downtown Buffalo's historic Statler Towers back to life might get a jump-start, courtesy of the Wyndham Hotel Group.

Richard Roberts, Wyndham's vice president for communications, confirmed Monday that the international hotel company is on the verge of approving owner Bashar Issa's application for a 346-room Wyndham Hotel.

"We are very excited at the prospect of welcoming this hotel to the Wyndham system," Roberts said.

But word of the pending hotel deal comes as the British developer and his Manchester, England-based BSC Group faces mounting financial pressures on their home turf.

According to published reports in Britain, Issa has hired a leading bankruptcy and liquidation firm to restructure his British ventures.

Issa's Wyndham proposal calls for a mix of 235 traditional hotel rooms and 111 suites, spread over the upper 12 floors of the 18-story building. The developer is also proposing to create 50,000 square feet of meeting space in the 85-year-old complex, which began life as the luxurious Statler Hotel.

"We have received signed documents from Bashar Issa requesting a franchise agreement," Roberts said. "We currently are processing those documents in anticipation of completing an agreement with Mr. Issa's company soon."

If the Buffalo hotel deal becomes a reality, it could serve as a linchpin in the rebirth of the landmark. Issa halted his $100 million Statler overhaul April 11, citing cash-flow problems, but vowed to seek alternative funding, including $20 million in New York State Historic Tax Credits.

However, doubts remain about Issa's corporate financial health. According to Crain's Manchester Business, Bramley Carrington has been brought in to leverage equity in Issa's only finished project, Issa Quay, an 83-unit apartment tower.

The Manchester business publication quotes a letter from Bramley Carrington to one of Issa's creditors indicating that BSC Group is suffering from "financial difficulties and severe cash-flow problems," as well as "limited liquidity."

Issa Quay, completed last year, has an estimated value of between $29 million and $37 million (U. S.). Bashar Issa's equity position in the building has not been revealed.

Savills, a real estate firm, has been hired to sell apartments at Issa's self-titled project to satisfy debts, according to Crain's.

The developer did not return phone calls from The Buffalo News or Crain's regarding the financial status of his development firm.

Issa arrived on the Buffalo development scene in mid- 2006 when he acquired the faded Statler for $3.5 million and proposed a $100 million restoration. He subsequently unveiled eye-popping plans to construct Buffalo's tallest building, a $361 million, 40-story mixed-use tower, at the corner of South Elmwood Avenue and West Mohawk Street.

In a January 2007 interview with The News, Issa pointed to his British portfolio, -- $1.07 billion (U. S.) worth of projects either under construction or in development -- as proof of his development credentials.

To date, only Issa Quay has seen completion.

Sarah Tower, a $70 million 23-story tower first proposed in 2000, saw the start of construction last year, but work was brought to a halt for several months after the death of a construction employee. While minimal work has resumed, investigations into the fatal accident, which could result in manslaughter charges against BSC, are continuing.

Issa's $356 million (U. S.) Canopus Towers has not progressed beyond a hole in the ground dug in 2006.

In Buffalo, Issa faces action by the National Labor Relations Board regarding treatment of workers who unionized last summer under the Laborers Local 210 banner. The developer's failure to respond to a settlement offer on those charges could result in a U. S. District Court hearing as early as June.

The City of Buffalo's Department of Taxation and Assessment confirmed that Issa's company has not paid its full 2007-08 property tax bill on 85 W. Mohawk St., site of its proposed 40-story tower. BSC Group owes the city $8,865 in taxes plus $1,462 in late fees and interest.

slinstedt@buffnews.com

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Copyright (c) 2008, The Buffalo News, N.Y.

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