|By Thomas J. Prohaska, The Buffalo News,
N.Y.McClatchy-Tribune Regional News
Dec. 30, 2009--LEWISTON -- The owner of an upscale hotel that has become a landmark near the Niagara River said Tuesday an unidentified new investor will change its financial picture soon.
If so, it's just in the nick of time.
A New Jersey lending firm has filed a mortgage foreclosure action against the Barton Hill Hotel and Spa, saying it is owed more than $9 million.
Other lenders are moving to take other properties from the hotel's owner, and the Niagara County Industrial Development Agency may discuss rescinding the hotel's property tax break because of the foreclosure threat.
Diane Finkbeiner, who owns the hotel with her husband, Edward, said the 72-room hotel will "absolutely" remain open despite the action filed in State Supreme Court the week before Christmas.
"As part of our long-term strategy, we will be announcing a partnership with an international hospitality industry leader of distinction," she said. "They will provide investment capital for expansion."
CIT Lending Services Corp. said in its court filing that is it calling in the $8.35 million mortgage because the Finkbeiners didn't live up to a "forbearance agreement" they signed with CIT in March, acknowledging the mortgage was in default and promising to become current.
With interest and late charges, CIT said it was owed $9.17 million as of Dec. 14.
CIT also is seeking to take two other Finkbeiner properties that were pledged as collateral in the forbearance agreement: an apartment building on Goundry Street in North Tonawanda and 11 vacant lots in Youngstown where townhouses were supposed to be built.
In the case of the North Tonawanda building, First Niagara Bank beat CIT to court by filing a foreclosure suit in November. First Niagara said it is owed $233,651 on a delinquent mortgage.
State Supreme Court Justice Richard C. Kloch Sr. already has named a Grand Island attorney as receiver of rents from the Goundry Street building.
The Barton Hill Hotel employs 50 workers during the summer season and fewer during the winter. It opened in the fall of 2007 on Center Street, a block from the waterfront, at nearly twice the cost its owners originally anticipated.
Village leaders want the lodging to stay open.
"We are pleased to have the hotel in the village, and we look forward to continue working with them. We are confident they will be able to resolve their financial issues," Lewiston Mayor William E. Geiben said. "Presumably the note will be refinanced at a lower rate, and there are other developments on the horizon."
The latest court cases come on the heels of other mortgage foreclosure suits filed against Finkbeiner properties this year, threatening their home, a former bar used as an auxiliary building for the hotel, and two residential properties in Lewiston, on Onondaga and North First streets.
Because of two years' worth of unpaid property taxes, the latter is included in the first edition of Niagara County's tax foreclosure list for 2010, the county treasurer's office said. The Finkbeiners have until March 31 to pay the taxes to prevent the county from listing the North First Street house for auction.
There are delinquent taxes on all the properties on which foreclosures have been sought except for the North Tonawanda apartments. In all, more than $45,000 in property taxes are owed.
Also unpaid is a$10,564 payment in lieu of taxes on the hotel, part of a 10-year tax break the county Industrial Development Agency granted in 2005.
"It wouldn't surprise me if the [IDA] board discussed that at the January meeting," IDA counsel Mark J. Gabriele said. He said there is a clause in the tax agreement requiring the owners to remain current on mortgages.
"Obviously, we are doing everything we can to bring a business through in unprecedentedly difficult times," Diane Finkbeiner said. "We have put our lives and our investments on the line to see this through. . . . Right now, our primary concern is to protect the solvency of Barton Hill Hotel, even if it means putting ourselves at risk."
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