By Mark Scheer, Niagara Gazette, Niagara Falls, N.Y.McClatchy-Tribune Regional News
April 26, 2011--NIAGARA FALLS -- The Hotel Niagara sold for $1.25 million at an auction on Tuesday, with the winning bid submitted by a 30-year-old real estate developer from Vancouver, British Columbia.
The auction started with an opening bid of $150,000, included 31 total bids and lasted roughly five minutes.
The winning bidder, Jamil Kara, is expected to complete the sale of the property before Memorial Day. He plans to convert the building into a mixture of hotel and condominium space and estimated that the project would take about two years and at least $10 million to complete. He will actually pay about $1.34 million for the building once a 7.5 percent buyers premium is added. Following the auction, he said he was willing to bid as high as $2.5 million for the property.
"The way I look at it at $1.25 million, it's a steal," Kara said.
Kara has been involved in other real estate development projects in Vancouver, Toronto and other parts of Canada. His most recent effort, the Filmwork Lofts in Hamilton, Ont., converted a printing plant formerly owned by the Hamilton Spectator newspaper into space for 50 condominiums. Kara said he purchased the building for $3 million and completed renovations in about a year. The Hotel Niagara represents his first real estate investment in the United States, but he said he is looking to acquire additional properties in Niagara Falls and Grand Island. He found out about the auction from his lawyer just a few days ago, arranged a tour of the building and decided the Hotel Niagara was a good place to start. He envisions the Rainbow Boulevard property as a five-star boutique hotel and condominium. He said he plans to run it as an independent operation and is not interested in being affiliated with any national hotel chain.
"It has good potential, but we are looking for more aside from this," he said.
A group of about 60 people attended the auction on the 14th floor of the Giacomo Hotel, including Giacomo owner Carl Paladino, Mark Groce, owner of the Statler Hotel in Buffalo, and Ashak and Faisal Merani, whose family is currently renovating the old Inn on the River on Buffalo Avenue. Gordon Greene, an executive with the Chartwell Group, the Cleveland firm that ran the auction for the Hotel Niagara's previous owner, the State Bank of Texas, said a total of 10 individuals representing five states and three Canadian provinces were cleared to submit bids. The next highest bidder was Harry Stinson, another developer from Hamilton. Stinson would be given the opportunity to acquire the property if Kara's deal fell through in the weeks ahead.
Kara said that's unlikely to happen as his project is fully financed. He said he's been involved in the hotel and condominium business for the past seven years and accumulated the wealth necessary to acquire properties like the Hotel Niagara through success in "previous projects." In addition to several properties he owns on his own, he said he has real estate holdings through a partnership with his brother in Vancouver. Kara intends to use local labor once the Hotel Niagara renovations begin and said he's not at all concerned about doing business in Niagara Falls.
"I wouldn't have bought it if it's not going to happen," he said. "I understand the unionized labor. I understand all of it. I've got trades in Canada, but it would be too hard to bring them here so we will be working with locals."
In the Hotel Niagara, Kara acquired a 12-story, 145,000-square-foot building that is located at the heart of an area that has been targeted for redevelopment by state and city officials in recent years. Greene said the previous owners, Amidee Hotel Niagara, invested more than $10 million into the site before the downturn in the economy hit, stalling the project.
"I think the history of the building is very attractive to people," Greene said. "It is right at the premiere corner here of Rainbow. It has history to it. It has unique features. There are plenty of newer facilities in Niagara Falls, but there's only one grande dame and that's the Hotel Niagara."
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Copyright (c) 2011, Niagara Gazette, Niagara Falls, N.Y.
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