Bashar Issa: More Harm than Good

Almost like Buffalonian clockwork, the effort to sell the Statler Towers at a bankruptcy auction seems to be failing. The winning bidders have asked to delay closing on the deal twice already, and are expected to do so again today. That doesn’t bode well for the sale to be finalized or for anything to actually happen with the building.

And I blame the whole damn thing on Bashar Issa.

For years before Issa flitted onto the local aborted-development stage, the Statler was mired in a faded mediocrity, allowed to worsen through neglect year after year. But it was a relatively professionally-managed building of C-class office space. It was a going concern and being actively marketed. That’s why everyone was so excited by Issa, who seemed to have lots of money and charmed everyone by telling them precisely what they wanted to hear.

But when everything started to fall apart, Issa had a key chance to sell the Statler to a group of investors who had the means and ability to renovate. The Scott Group from Erie, PA just built a restaurant and hotel out on Transit Road, and they were part of the group looking to buy, along with Sam Savarino. In September 2008, it was reported that Issa had sold the Statler to Greystone Group for $3.8 million. Had that deal gone through, renovations might now be underway because Greystone Group was made up of entities who knew what they were doing. That deal would have been in everyone’s best interests.

But the Greystone deal fell through by November. Here’s why:

“Mr. Issa continuously renegotiated the purchase and sale agreement making it impossible for us to finalize the purchase,” said Howard Hurst, the Toronto businessman who was leading the Greystone effort.

“In addition, Mr. Issa’s bankruptcy in England, the liens, litigation and unpaid utility and maintenance costs here on the Statler,” Hurst explained. “[Issa’s] inability to clean up title further contributed. Under different circumstances we are still interested in being a part of its redevelopment.”

Bush league shit, that. So while Issa dithered contractually, the deal fell through and he ended up losing the Statler at bankruptcy auction, where it was allegedly sold for $1.3 million. Now, that deal appears to be falling apart, probably due to a financing issue.

He bought the Statler in 2006 for $4.5 million. He had a chance to sell for $3.8 million. At auction, it sold for $1.3 million. Supposedly.

Heckuva job, Bashar. Buffalo and the Statler would have undoubtedly been better off without you.

Bashar Issa’s Latest W.T.F.

The Statler has been in receivership for 10 days now. A judge determined that Issa was:

“indifferent and unconcerned” in his operation of the Statler

Yet on March 9th, after the receiver had been appointed, Issa executed a lease with some London-based investment firm to occupy 11 floors of the Statler, some of which are already occupied. Issa had no authority to do that, and the court is demanding he appear to determine whether he should be held in contempt of court. The lease is for a whopping $1 per year.

The deal with AAMS Investments Limited, which has an initial lease term of 49 years and options going out another 949 years, would divert a $1 million commission to Issa’s father, Mohmoud al Issa.

By funneling the $1 million to his father, Bashar is blatantly violating the court’s order that Statler revenue be used for its operations and upkeep. The elder Issa holds a mortgage on the property, the validity of which is being scrutinized.

Even by the generous standards of Buffalo failure, Issa’s is epic indeed.

Bashar Issa and The Statler: A Lesson For Buffalo

“Cherish the past, adorn the future, construct for the future” – Bashar Al-Issa

When Bashar Issa exploded on the scene in June of 2006, we were all pretty excited that one of the most beautiful buildings in Downtown Buffalo was to be renovated by an out-of-town developer with money and vision.

Issa was exciting.  2006 was the peak of the “hopeful years” when it seemed Buffalo was ready to slough off it’s usual skepticism and embrace a project.  We were trying new things, we lost a few pounds and we were looking for Mr. Right.  Issa’s decision to buy the Statler and and invest $80MM to make it a world class hotel and condo project seemed a validation of the things we all knew about Buffalo.  Someone finally came along and told us we were pretty.  At first, even a cynic like me was taken with the guy.

By January of 2007, I started to have my doubts about Issa.  He hadn’t announced much of a plan for the Statler, and was immediately invested in drumming up national support for the project with his interest in buying the Central Terminal, his master plan for the City of Buffalo, his 48 Story City Tower and his Statler on The Sea.  He was trying really hard to look successful without accomplishing much.  I grew suspicious as the hero worship grew to a fever pitch with weekly updates from another local website as to the proclivities of Mr. Issa.  I thought we were investing too much in his mere presence.  We were like a girl who didn’t want to think that her boyfriend could possibly be a douchebag, even though she was starting to see his real self.  My comments from January of 2007:

When the Statler is completed and I see cranes in the air around the site for the Buffalo City Tower, I’ll thank Mr. Issa for his efforts. Until then I’ll applaud Rocco Termini, Sam Savarino, Carl Paladino, Ben Obletz, Paul Ciminelli, and Carl Montante for completing projects that make Buffalo a better place to live, work, and play.

I hope that issuing a simple “Welcome to Buffalo, Mr. Issa” will suffice…

I think we know that from this point, it was pretty much all downhill.  There were project delays, incremental progress and the completion of new elevator doors and discussion of new windows at the hotel seemed to be enough to throw New Buffalo into a near orgasmic fit.  “He loves me, he really loves me!!!”

While a Jake Halpern article in the Wall Street Journal seemed to upset many locals, Halpern turned out to be quite prophetic, the friend who finally sits you down and tells you your boyfriend is sleeping with six of your sorority sisters:

The danger is that Buffalo’s optimism regarding Mr. Issa will become a kind of clinging, desperate hope. This hard-luck city is always looking for redemption: redemption from poverty, from four straight Super Bowl losses, from the loss of the steel mills, from the bad stereotypes about the weather, and from the opportunists who, like myself, move away from the city in its hour of need.

This need makes someone like Mr. Issa more appealing because it casts him as a hero in the classic American storyline. He’s the sheriff sauntering into town who, in John-Wayne-like fashion, will restore justice, dignity and prosperity.

The problem is that waiting for a John Wayne figure can create complacency and obscure the reality that redemption will not come easily or at once in the form of deus ex machina.

Progress slowed to a crawl and whispers began that Issa was in way over his head.  By January of 2008, the bloom was off the rose as the progress had ground to a halt and Mr. Issa’s workers walked off the job site due to low pay and unsafe working conditions.  News began to leak from his properties in England that he was having cash flow problems and that someone had died on one of his job sites.  Allegations of poor working conditions existed there as well.  By the fall of 2008, Issa announced his intention to sell the hotel and sold the plot of land for his invisible skyscraper.

After all of that, Issa had a deal worked out with a Canadian firm to buy The Statler, but he fucked that up, too.

Now, here we are in February of 2009 and The Statler Hotel will probably be put into receivership.  The catering and event planning company which occupies The Statler has outstanding claims, is losing business and the building is bleeding money.  In fact, the lights might be turned off next month if some sort of resolution can’t be arranged.

Day-to-day control of Buffalo’s floundering Statler Towers could be in the hands of a court-appointed receiver as early as Tuesday.

Longtime Statler manager John Gingher testified the Statler is running at a deficit of as much as $75,000 a month, with just $19,000 in cash on hand. He told the court there is a strong probability the 18-story Niagara Square landmark could “go dark” within 30 days due to a pile of more than $1 million in bills, including some $400,000 owed to utilities.

Quite the sordid tale, eh?

Did Issa set out to fail?  Of course not.  I’m sure he saw an opportunity to get a great building on the cheap that he could renovate and flip for cash.  He would create artificial demand by announcing big plans to an uncritical local press.  He would build public support working his PR through that uncritical press and either pump and dump the property for a short term gain or eventually finish it and hopefully break even by operating a hotel and selling a few condos.  I tend to think it was more a function of the former than the latter, but that’s just me. In retrospect, why did we think that a privately financed $80MM project could provide the necessary return in a downtrodden market?  Were we high?

Alan, Marc and I are usually mocked for being negative when new projects are announced.  While others tend to focus on the design of new projects and lend a critical eye in that manner, we openly wonder if the project is feasible.  Does the project have the right funding?  Does the market support the project?  In this case, we didn’t do it soon enough.  Would it have made a difference if we did?  I don’t know, but I think we overinflate our value if we assume we would have.

So, when projects are announced and pretty diagrams drawn in Google Sketchup are unveiled, forgive me if I am skeptical.  I think we all need to be skeptical.  We need to be supportive of new ideas, yet critical.  As a community we should not be cheerleaders because someone validates us.  We should hold people accountable, measure progress and demand results.  We shouldn’t play the patsy for a snake oil salesman who is looking to make a buck with his Daddy’s money.

Remember Bashar Issa?

You know, wide right – whether we’re talking about 47 yards in 1991 or 47 yards last night – isn’t just the phrase that drives Bills fans insane. It’s also a metaphor for all the wonderous projects that have come Buffalo’s way over the last billion years and never came to fruition. Outer Harbor development, Peace Bridge expansion, Skyway removal, a Metro rail network – all of them live in the as-yet non-existent museum of abandoned or unrealized Buffalo plans. We are so used to going one step forward and two steps back that when we actually get the step forward (see Canalside), we go overboard in our gushing.

I have visions of the ECHDC demolishing the Aud and the Donovan building early next year, and we get a Fotomat, a Perry’s ice cream kiosk, and an Airport Plaza Jewelers hut on the property. In fact, I think everything built there should be named “shack”, “hut”, or “shanty” just for that extra bump of historical accuracy.

Buffalo. Where a really great project shouldn’t cost [pause] an arm and a leg.

The centerpieces of that Buffalo Museum of Abandoned Dreams (BMAD) are Bashar Issa’s promise to completely overhaul the Statler Towers into a mixed-use extravaganza, together with his pump & dump of a nearby property, which was inexplicably going to tower over the HSBC tower and offer Class A office space for a city that has a need for it, but probably not quite that much of it.

Issa ingloriously sold off the site for the office tower, and later agreed to sell the Statler to an investor group that includes Erie, PA’s Scott Enterprises of Splash Lagoon fame.

By happenstance, I googled Mr. Issa yesterday and found this article from Property Week in the UK. Evidently, Mr. Issa – who promised to completely self-fund all of his projects, and convinced a lot of people that he had the means and the know-how to get it done – is busy selling off just about everything. Issa’s companies went into bankrupcty earlier this year, and assets are being sold off:

It is thought that administrator KPMG and its adviser, Knight Frank, are assessing bids of between £2m and £4m, from as yet unnamed parties, for the site on Lena Street, where Issa planned to develop a 23-storey tower.

Sarah Tower was one of three Manchester residential sites put up for sale in August. The other two sites are Sarah Point on Great Ancoats Street, funded by Yorkshire Bank, and Issa Quay in the Piccadilly Basin, which is the only project near completion.

The three schemes were put on the market after KPMG took full control of three subsidiary companies of Issa’s BSC Group: BS Developments, Issa Developments and BS Construction.

One of Issa’s financing sources pulled out of a deal to loan £89 for Issa’s projects. But this is even more troubling:

Issa is also in advanced negotiations to sell another troubled development site, Statler Towers – in Buffalo, New York, in the US – to the Greystone Group for around $3.5m (£2m). Greystone is undertaking due diligence on the site and it is thought market conditions are hampering the progress of the deal.

So, we’re back to square one. The sale of the Statler is in doubt, and the fading, Class F structure is going to continue to fade for the foreseeable future.

Two steps back. Wide Right. [Insert metaphor here.]

Secret Bashar Issa Business Plan revealed

Phase One: Announce megaproject skyscraper, comprehensive downtown master plan, underground parking at Niagara Square, Central Terminal renovation, and blockbuster Statler renovation.

Phase Two: ?

Phase Three: Profit.

Bashar Issa Unveils Master Plan For City of Buffalo at BED

Click through the article to watch his presentation live online.

Buffalo, NY – How can you and I identify and leverage Buffalo’s existing, under-recognized assets in ways that will lead to sustainable development and result in meaningful social change?

BED – Buffalo Education & Design, modeled after TED, the global think-tank that takes place annually in Monterrey, CA, connects on a city level. It invites, involves and expects you to participate in a conversation that is changing the way we see our city.

BED incorporates three unique facets: a conversational wiki to encourage the free exchange of ideas; an un-conference on Tuesday, July 3, at The Church, showcasing innovative Buffalo projects to facilitate participation in this creative process; streaming online video and archived video segments will document the un-conference and make it possible to share Buffalo’s best and brightest ideas with like-minded individuals and the broader community.

Model Projects that will be showcased:

Michael Gainer ReUse Buffalo

Roger Schroeder Architect

Lisa Evans Elmwood Village Charter School

Amy Kedron Buffalo First

Yali Freidman New Economy Strategies

Jay McCarthy Micro Park & Citizen Activist

Kristin Rose West side “green renovation”

Rod McCallum Queen City Farm

Bashar Issa BSC Group

http://www.ustream.tv/XppaWPEA3ihRd6Ceh5iv5LmVyZs1EGo5.usc

Video Clips will be posted online at the conclusion of the event.

Bashar al-Issa Convicted of Tax Fraud in the UK

From the Glasgow Daily Record, we learn that,

LOOSE Women star Andrea McLean was offered a big movie break – and became an unwitting pawn in a multi-million tax scam.

The Scots former weathergirl was cast as a bisexual therapist in gritty gangster film A Landscape of Lies.

But she was unaware the production – which also featured equally unsuspecting former EastEnder Marc Bannerman – was being hastily shot to get the taxman off the conmen producers’ trail.

The fraudsters, fronted by redheaded actress Aiofe Madden, 31, had told the tax authorities her company, Evolved Pictures, were making a £20million film.

They hoped to claim £2.8million in tax credits and VAT repayments and had raked in £1million in tax credits before HMRC swooped and arrested them.

Then, in a farcical attempt to cover their tracks, they hastily recruited an unsuspecting crew and cast and shot their film in four months.

But the shoestring effort they produced for just £100,000 bore no relation to the ambitious plans they had submitted – and the taxmen saw through the ruse.

Yesterday, at Southwark Crown Court in London, bankrupt Iraqi building company boss Bashar Al-Issa, 33, was found guilty of two counts of conspiracy to cheat the public revenue.

His accomplices Tariq Hassan, 51, Osama Al-Baghdady, 50, and Ian Sherwood, 53, were each found guilty of a single count of conspiracy to cheat the public revenue.

Mr. Issa came to Buffalo in a flourish several years ago, buying the Statler Towers and pledging to restore them to their former grandeur. He sought no public money and was greeted as a hero. He pledged that he would build the tallest skyscraper in Buffalo just off Niagara Square, and proposed an underground parking garage under the square to accommodate visitors’ parking needs. He even promised that a speedboat he bought would be available for the use of Statler guests and residents. 

Having renovated an elevator or two, he left town, selling the property at a loss in a flurry of litigation and bankruptcy filings, and his entire phony empire crumbled quickly around him. 

Issa vs. Pigeon – PolitiFAIL Tourney 2010

Bashar Issa came to town,
the Statler was in trouble.
he’d fix it up, he’d fix it down,
he’d do it on the double.

His slicked-back hair! His powerboats!
The rubes all fell real hard.
British accent, fancy suits
He was the avant garde.

Big plans he had for Buffalo
the Statler! Then a tower!
But in the end, the work was slow
and Issa had no power.

Insolvent, Issa skipped this town,
his visa never cleared.
The savior ended up a clown,
Statler? Boarded up for years.

Machiavelli’s progeny, we know him as Steve Pigeon.
Although he fucks with lots of races, he only wins a smidgen.
He’s got a list of enemies that’s longer than your arm.
Lots of people fear him, and react with great alarm.

He plays with others’ money, and helped promote Espada.
To wrest from him IP control would take an intifada.
His legacy and record sure leave much to be desired.
But in New York, deals and money mean he can be acquired.

Steve Pigeon, friend of Hillary and others who have clout
is more feared than respected, of that I have no doubt.
The only ones who benefit when Pigeon gets to work,
Are those who every other person thinks a fucking jerk.

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The Statler's Door Hit Issa on the Ass on the Way Out

Bashar Issa will now go down in Buffalo obscurity/infamy, just like, say the E-Zone.  He paid $4.5MM for the Statler in 2006, promised the moon and the sun and the stars, and it’d all be self-funded.

To say he was wrong would be an understatement. In the end, he turned out to be a well-dressed carnival barker, unable to complete much at all with that property.

Deals to sell the Statler to various interested parties came and went.  Issa couldn’t even get it together to come to terms and close a deal to sell.

So, the creditors forced him into involuntary bankruptcy, which ultimately led to today’s rather pathetic auction sale.  Watch the bidding start at $1MM and drop down to $400,000 before someone bothers to bid.  Ultimately, Park Lane Catering, LLC bought the building free and clear of all debts and liens for $1.3MM.

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I wish them the very best luck in their very difficult endeavor.

Issa’s Visas

Bashar Issa has used this excuse before – to avoid dealing with legal proceedings relating to his all-but-dead US operations, he claims to have “visa issues”.

Issa is a British citizen. The UK is part of the visa waiver program:

The Visa Waiver Program (VWP) enables nationals of certain countries to travel to the United States for tourism or business for stays of 90 days or less without obtaining a visa

Why does he need a visa, and why is he having difficulty?

(Photo HT)