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The Hotel Niagara, a 12-story, 193-room Hotel in Downtown Niagara Falls, NY,
Has Foreclosure Auction Scheduled for Sept. 24, 2010

By Mark Scheer, Niagara Gazette, Niagara Falls, N.Y.McClatchy-Tribune Regional News

August 26, 2010 --NIAGARA FALLS -- City and state officials are hoping an upcoming foreclosure auction will signal brighter days ahead for a languishing hotel building downtown.

The Hotel Niagara, a 12-story, 193-room hotel on Rainbow Boulevard, will be offered up to the highest bidder as part of a foreclosure auction scheduled for Sept. 24.

The building was condemned in March by city inspectors who determined that a lack of electricity, heat and an inoperable fire protection system inside the building posed safety concerns.

At the time of the condemnation, city officials confirmed that the owners performed some renovation work on the property, but had also fallen behind on their property taxes. During a council meeting in March, Economic Development Director Peter Kay said the owners owed about $119,000 in back taxes. He said the amount included property taxes owed to the city for the second quarter of 2009 and the first quarter of this year as well as $12,000 in county taxes and roughly $30,000 owed to the city school district for 2009.

The auction comes as the State Bank of Texas moves to foreclose on Amidee Hotel Niagara, LLC, a subsidiary of Amidee Hotels and Resorts, Inc. which purchased the building in 2007. Amidee officials originally planned to renovate and re-open the building by last spring, but construction stalled several months later.

Earlier this year, it was announced that Amidee Capital Group, the Texas-based parent company to Amidee Hotels and Resorts, Inc., filed for Chapter 11 bankruptcy protection. Published reports indicated the hotel and resort affiliate was not part of the larger company's reorganization plan.

Mayor Paul Dyster said the city has been working with officials from the state-run USA Niagara Development Corp. since both parties recognized the developers would likely not be able to follow through on their plan to find new investors to take over and continue the project. Dyster conceded that the building is likely in need of several millions of dollars worth of work, but said it is an attractive structure with tremendous potential.

"I think both the city and USA Niagara view that project as a crucial development in the continued revitalization of downtown," Dyster said.

Fire inspectors who toured the building in the spring found the heat had been turned off for the winter while the water was left running. As a result, a number of pipes froze and others broke. The Niagara Falls Water Board later shut off water service to the entire building. The lack of water compromised the fire protection system. The building was condemned once before in 2009 due to an inoperable fire protection system. The condemnation was lifted after the owners repaired the system.

Neither the city nor the state has any money into the project. At one point, the developers were offered financial support in the form of a grant from USA Niagara. After initially accepting, the developers later rejected that offer.

USA Niagara President Chris Schoepflin said Hotel Niagara is a unique structure in the downtown area and expressed hope that whoever buys the building will be able to resurrect it in some form.

"I think the Hotel Niagara is absolutely one of the buildings that we have to save," Schoepflin said.

The foreclosure auction is slated to begin at noon on Sept. 24 at City Hall, 745 Main St.

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To see more of the Niagara Gazette or to subscribe to the newspaper, go to http://www.niagara-gazette.com/.

Copyright (c) 2010, Niagara Gazette, Niagara Falls, N.Y.

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