One phase of a larger hotel development project that was at the center of a tax break controversy earlier this year will get a financial boost from the City of Niagara Falls.
Members of the board of directors for the UFC Development Corp. on Monday agreed to provide a $650,000 grant to LaSalle Hospitality, Inc., a company that is looking to purchase and renovate the former Inn on the River at 7001 Buffalo Ave.
LaSalle Hospitality is headed by Canadian hotelier Faisal Merani, whose family currently runs the Holiday Inn in downtown Niagara Falls. It also is a sister company to Merani Hospitality, another firm owned by Merani that is looking to re-open the former Fallside Hotel located at 401 Buffalo Ave. Both projects gained notoriety earlier this year when the Niagara County Industrial Development Agency agreed to provide an unusual tax break agreement that would allow both firms to avoid property taxes for up to five years while they renovate the hotels. City officials raised concerns about the agreement and the IDA’s failure to provide proper notification about the terms of the deal and sufficient information about the finances of the principals involved.
The UFC Development Corp. functions as the city’s lending arm, providing loans and incentives to encourage business development in the Falls. During Monday’s meeting of the UFC board, Mayor Paul Dyster indicated the city has properly vetted the project and his administration is now prepared to give it strong support. Dyster said the project meets one of the city’s top economic development priorities which is to bring more rooms online in the city.
“We are at a time now when we are looking to add rooms,” Dyster said.
According to the company’s application for funding through the UFC Development Corp., LaSalle Hospitality Inc. is looking to re-open the Inn on the River as a 140-room hotel, complete with a full-scale restaurant, bar, banquet facility, gift shop, indoor swimming pool, exercise room, laundry and shuttle services. The application calls for the facility to become a “three-diamond” property and suggests that re-opening it will result in the creation of at least 45 new jobs. The application lists an owner investment in the project of $3.6 million, with another $2.85 million coming from bank financing and the $650,000 NFC grant bringing the total project cost up to $7.1 million. The company indicates in the application that it needed funding from NFC to ensure the project’s viability as “financing for hotel startup projects of this type are not normally looked upon favorably by local banks.” The application indicates that Merani has “sufficient collateral to support the grant,” noting a net worth of more than $4 million.
Merani’s attorney, Damon DeCastro, said his client is hoping to bring the Inn on the River property back to a standard in which the surrounding community and entire city can be proud. Merani said it is hoped that the hotel will be re-opened sometime next year.
“It’s a beautiful piece of property,” DeCastro said. “It’s one of the first things you see as you come off the Grand Island Bridge.”
Local News
NIAGARA FALLS: City offers $650K for Inn on the River project
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