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Bank Forecloses on One Year Old Hampton Inn, East Aurora,
New York; Construction Cost Overuns Likely Cause

By Matt Glynn, The Buffalo News, N.Y.
Knight Ridder/Tribune Business News

Oct. 16, 2004 - The Hampton Inn-East Aurora is under the authority of a court-appointed receiver, after Wyoming County Bank began foreclosure proceedings on the Olean Street property.

The hotel and conference center's everyday lodging and banquet operations are unaffected by the court proceedings, with the same general manager still in charge, said James Partacz, the court-appointed receiver.

"The bank recognizes it's in everyone's best interest to keep the hotel running well and efficiently," said Partacz, a West Seneca attorney.

Aurora Hospitality, which is run by real estate developer Paul Bandrowski, opened the 80-room hotel and conference center more than a year ago.

Wyoming County Bank said in court documents that Aurora Hospitality last April defaulted on its mortgage. Partacz later was named temporary receiver, giving him control over the hotel and conference center's finances and operations.

Bandrowski argued in court that Partacz was exceeding the scope of his appointment. Bandrowski contended that the hotel and conference center are run by separate entities called Aurora Hotel and Aurora Banquet, that are owned by Bandrowski and lease space from Aurora Hospitality.

He said Partacz should not be authorized to manage the operations and finances of the hotel and conference center, but State Supreme Court Justice Joseph R. Glownia disagreed.

The hotel and conference center could end up at a public auction, unless another action is taken before the foreclosure process is completed, said Vincent O. Hanley, a partner with Jaeckle Fleischmann & Mugel, which is representing Wyoming County Bank.

Steps such as a sale of the property by the owner or a bankruptcy filing could head off an auction.

A typical foreclosure takes about four months to complete, but the process involving the East Aurora property will probably take longer because of the number of liens that have been filed, Hanley said. The process officially started Aug. 20.

The property's financial troubles apparently stemmed from cost overruns incurred during construction, Hanley said. The hotel appears to have been performing well since it opened, he added.

Bandrowski could not be reached to comment on Friday. In an interview last year around the time of the hotel's debut, Bandrowski said he hoped to tap into traffic generated by the area business community as well as tourists.

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