Financing in Question?

Mark Hamister was required to demonstrate, when submitting his initial proposal in response to the RFP in Dec. 2011, that he had financing for his proposed project at 310 Rainbow Blvd. Those disclosures, according to the RFP, "should include the anticipated sources and uses, amounts, terms and conditions of financing and the proposer's equity to be employed in the transaction."

Was this waived by Empire State Development and USA Niagara because it was Hamister, a man, who to even ask, might be an insult to the man?

At various times - Feb. 2012, when Hamister was named preferred developer;  July 2013, when the council was urged to approve the sale of land; Aug. 2013, when the council sought to view his financials that he disclosed with the RFP, some wondered if Hamister was properly vetted.

In Aug. 2013, a prominent local commercial mortgage broker, who claimed he had inside information about the Hamister deal, told the Reporter that Hamister was a year and a half away from being able to obtain financing.

Another individual, a private investor who is well known throughout Western New York, told the Reporter that Hamister had approached him for funding the deal.

The private investor said Hamister would be likely to secure 60 percent of the value of the hotel from banks. The tax subsidies, and land gift, could be counted as down payment. But the subsidies were not enough to cover the entire 40 percent. Hamister was seeking " private lenders" to come up with the down payment.

The comments of the investor and the mortgage broker should be taken with a grain of salt of course.

In late Aug. 2013, the Niagara Falls City Council said they would accept a letter of commitment proving Hamister had the funding.

Hamister admitted that he did not. He told them, in order to have the financing, he had to have a hotel franchise; and to have a franchise, he had to have site control; and in order to have site control, he had to have a development agreement which the council majority was holding up.

Within a month - Sept. 2013 - the council approved the sale of land to Hamister. He had site control on Nov 15, 2013, when he signed a development agreement with the city. In July 2014, he procured a franchise for Hyatt Place.

Fourteen months after gaining site control, and seven months after having a franchise, Hamister did not have financing.

When Hamister made application to the IDA, on January 26th, 2015, the company was asked to identify what bank would make the mortgage loan on the hotel. Vice President Daniel Hamister said the company was "In preliminary talk with multiple & institutional lenders. We have not progressed to the 'Term Sheet' stage as of the date of this application."

Whether Hamister will obtain financing is not yet known.