July 24, 2008 - NIAGARA FALLS -- A state economic development agency and the city plan to offer a $4 million incentive package to the owners of the faded 12-story Hotel Niagara on Rainbow Boulevard, who plan to restore the building's prestige.

Amidee Capital Group, a Texas- based real estate firm that bought the hotel in September, plans to completely renovate its 193 rooms, add a rooftop "speakeasy" and open boutique shops and a spa in the building by next spring.

The $15.2 million restoration will bring back some of the original features of the 1920s-era building.

"The intention here is to be the finest hotel in Niagara Falls," said David Giusiana of Giusiana Architects and Engineer.

Mayor Paul A. Dyster will ask the City Council on Monday to approve giving the project $500,000 of the city's slots revenue. The state's USA Niagara Development Corp. has offered an additional $3.5 million "incentive package" toward the restoration, according to a memorandum given to the Council.

"Between the city and the state, we're trying to fill the gap in the deal that makes it possible for them to move forward with these projects," Dyster said.

It was unclear Wednesday whether the state's share would be a loan or a grant. USA Niagara President Christopher J. Schoepflin declined to discuss the details of the project but said he will give a public presentation to the City Council at its Monday meeting.

Amidee Capital Group is owned by James and Judith Cook. They purchased the building last year at auction for $4.9 million.

Giusiana told members of the city's Planning Board on Wednesday that the owners have applied to add the building to the state and national registers of historic places and plan to use tax credits available to buildings designated as historic.

"The owners are extremely interested in the property's historic character," Dyster said. "That's what drew them to the property in the first place."

Renovation plans call for replacing 354 aluminum-framed windows in the building with wood-framed windows that reflect the building's 1920s architecture. The owners also plan to open a "four star" restaurant in the hotel's mezzanine level, restore its ballroom, add boutique shops and build a spa and fitness center.

Thomas J. DeSantis, the city's senior planner, said the Hotel Niagara upgrade will help fill a need for high-end hotel rooms that can compete with the Seneca Niagara Casino & Hotel. "We've been working with them for almost a year now to bring this project to fruition," DeSantis said.

The Hotel Niagara, which has a two-story lobby with a balcony that overlooks its entrance, was sold in a foreclosure auction in 2005 before the Cooks bought it last year.

The building had declined in recent years to a "low budget, limited service" hotel property, according to a project summary by Giusiana.

The Hotel Niagara project is one of three downtown hotels that state and city officials have offered incentive packages.

The city has also been asked by USA Niagara to approve giving a former Four Points by Sheraton on Buffalo Avenue a $500,000 grant toward an expansion project, but that request has not yet been approved. USA Niagara representatives have said the state plans to offer at least $1.5 million toward that project.

The state also gave $6 million in grants to a $25 million project to upgrade a Holiday Inn Select on Third Street to a Crowne Plaza Hotel in 2006.

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