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Is government the Statler solution?

It’s been awhile since I’ve written anything of substance here. I blame that on the fact that I’ve been doing more of substance since being elected Treasurer of the Central Terminal Restoration Corporation. As I’ve spent the last few months gaining a deeper understanding of the many facets of the project, I’ve also been keeping an eye on the Statler saga. It’s a sad story for a storied building, but it’s fate will be one to watch as other Preservation projects, like ours, are probably more tied to it’s future than we’d like to admit.

One of the most frequently cited negatives of the Central Terminal project is that we’re located too far away from the downtown core. Yet with the Statler we have a historic building of the same age as the Terminal in the most prime location in the center of downtown. Yet, we have some people arguing it has a negative market value? That seems extraordinarily unlikely seeing that there were at least two bidders for it in the last auction, and the prior owner paid a couple million for it. There are hundreds of buildings in the city that you actually couldn’t give away which would fit the “worthless” moniker much better.

Of course, you have the people parroting for it’s demolition, but demolition is expensive for a structure like this. First, the building undoubtedly has asbestos that would need to be removed first. Asbestos removal is one of the costly items to deal with when rehabbing an old building. Second is the question of what do you replace a demolished building with? Buffalo isn’t in need of any more parking lots or shovel-ready sites. So if you don’t have a project waiting in the wings for this lot, and if you’re going to be stuck with an expensive taxpayer-funded demolition, what do you do? Exactly what is being done with the Statler – you seal it up and wait until the right developer comes along.

I think we can go one step better, actually. More needs to be done to preserve these key buildings that give Buffalo it’s unique feel and tie in it’s historical roots. Most business tax breaks are frequently criticized as being overly generous to a small number of companies, and many people are unsettled with the concept of handing over taxpayer dollars to businesses. The other “solution” has been instead to throw millions of dollars into brand-new development somewhere where there’s a clean slate, but that only distracts attention away from the problems at the city’s core.

Most people agree that infrastructure maintenance is a role of government. So, why not treat these buildings as infrastructure and take the money being thrown away for silver-bullet development and given away to companies that can afford to operate without the various tax breaks and subsidies and instead create a fund that will be directed towards preserving and preparing these key structures for the future? Focus on the areas that are expensive and problematic which deter the private developers – remove lead paint and asbestos, prevent water damage by sealing up roofs and windows, keep drains flowing and basements dry, and prevent scavengers from getting inside and stripping elements for scrap. Rather than letting the building sit dormant and slowly decay, make the investment to keep it usable for the future and more attractive to a developer who can focus on redeveloping it for current-day uses.

Everyone agrees that vacant, boarded up buildings have a negative impression on their area, so making sure there is a few of them as possible is an improvement to the entire community. A reinvestment plan like this makes the area more attractive to businesses, and will ultimately lower the cost of doing business by making buildings cheaper to rehab, thus lowering rent. It’s an investment in the city itself, which is what our tax dollars should be going towards.

It’s laughable to hear people say that the Statler it’s past it’s time. The Statler is nowhere near unsalvageable – it still had tenants in right up until it’s close. The Central Terminal has been largely vacant for 30 years. The Statler is a general-purpose building that can be easily adapted to a variety of purposes, unlike the Central Terminal’s purpose-built function which requires more imagination to adapt. And yes, the Statler is within spitting distance of the City Hall, not segregated a few miles away. I’ve read some comments from people saying a group like the CTRC should take over the Statler because we’ve done a commendable job with the Terminal, but volunteers are not what the Statler needs. If our group could get the Central Terminal back to the condition the Statler is in, that would be a success in itself. It’s the next phase of restoration that’s difficult and expensive and can’t be done simply by having dedicated people that love the project. Fixing the problems of the past to prepare for the future is where government can step in and do something tangible to help. Investing in your own property is something individuals and businesses alike can understand and regularly do, so we should be able to extend that philosophy to the public level.

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  1. Derek,

    Great to see you back in the blogging saddle!

    The recent public debate concerning the Statler has been occurring because the Statler has become the latest pawn in an ongoing war between government growth supporters versus private sector growth supporters. If they grab the Statler, it leaves only one property on Niagara Square that is not government owned. I don’t like that.

    The city states publicly that they are not interested in owning the Statler, yet they quietly maintain an over assessment on the property, and the existing confiscatory property taxes greatly increase the odds that the city may eventually seize the Statler. The city should have reassessed the property down to at least the highest bid at the auction, $1.3 million – immediately and without prompting when the bidder defaulted. This would have demonstrated the city’s genuine desire to save the Statler. The present assessment is $3.5 million, the price that Bashar paid.

    I would like to see Congressman Higgins courting private investors rather than courting a government takeover of the Statler. He should also be pleading with the city to lower those assessments. You are right; the Statler was a going concern. The most damaging factor has been the popular notion that it requires a total rehab. It has been fine as a going concern for decades and only requires normal maintenance, remodeling, etc. This project can be approached in mini-phases. Simply build to suite over time as more and more tenants show interest.

    I have no doubt that a private investor will come into the picture any day. That is why the de-privatization crowd is trying to move so fast. Also, many local developers would like to see a quick government take-over as well because they are fearful that a competing private investor will wind up wear the crown. You see, they each have their own monuments and they fear that the Statler will dwarf them all – if allowed to remain private. They apparently would rather see it taken out of the game, so they won’t have to compete against it later.

    My money is on the Statler as a private enterprise. It will happen and it will be the crown jewel of downtown.

    Besides, government is the last bubble. I don’t want the Statler to have a poor owner.

    Yours forever bloviating,

  2. Howard, great commentary – thanks! I would rather not see the Statler government-owned in the long term, or at all if that’s possible. If another private investor will step in (and it sounds like there may be some interest) all the better. My thoughts here are more along the lines of what happens when a building is foreclosed on and the city ends up with it regardless. I think investment in the buildings it owns rather than fun new pie-in-the projects to get you to look the other way is a better option.

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