Bashar Issa: More Harm than Good

20 Oct

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.

2 Responses to “Bashar Issa: More Harm than Good”

  1. Silent Bob October 20, 2009 at 9:36 am #

    Issa is a clown but it’s unlikely the fate of the Statler would be any different without his role.  As Greystone said in the quote you provide, “under different circumstances we are still interested in being a part of its redevelopment.”  Well, there are different circumstances now; title issues are cleaned up, Issa is out of the picture, etc.  And they haven’t joined the new purchaser group.  That’s because the inescapable fact is the economics around the Statler just don’t work unless there is massive government support.  The purchase price is irrelevant as the renovations are estimated to cost $100M. Avant cost $86M and that was subsidized to the tune of 10-20M in ‘tax breaks.’  Without at least $20M in tax incentives/government support, no one can make the numbers work on the Statler.    

    Greystone, like others before and since, made noises about buying but ultimately walked as they got further down the diligence path and realized the numbers are too tough to justify the risk.  So while Bashar is a clown, the Statler’s fate isn’t his fault.  

  2. lefty October 20, 2009 at 12:10 pm #

    @Silent Bob – The title may not be cleaned up. The Sr. Issa is claiming to hold a $4.5M mortgage on the property. I think this has a lot to do with why the $261,000 check has a stop payment.

    If the Statler is ever going to be renovated, the taxpayers are going to need to come to terms with some pretty serious tax breaks. It just will not work otherwise, unless someone has $100M to throw around for fun.

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