It's cold in Syracuse, N.Y., but the transaction market could be getting hot. Syracuse's Post-Standard reports that Fundamental Advisors, a private equity firm based in New York, wants to purchase the Hotel Syracuse, a 590-room hotel that opened in 1924 and is on the National Register of Historic Places, and reopen it. For decades, it was "Syracuse's premier hotel, but ran into financial troubles in the 1980s and 1990s." The hotel ultimately closed in May 2004 following its second bankruptcy filing.
"Fundamental is excited by the prospect of aligning ourselves with the city, the county and other interested parties, including CenterState (Corporation for Economic Opportunity), all of which share an interest in urban renewal and delivering value to the community at this historic centerpiece," Laurence L. Gottlieb, Fundamental’s chairman and CEO, told the Post-Standard.
William Fisher, deputy Onondaga County executive, told the newspaper that Fundamental as of now "has not worked out all of the details of a renovation plan and would only do so after it controls the property. Fisher did comment that "it has been in conversations with a hotel operator about running a renovated Hotel Syracuse." That hotel operator was not disclosed.
Fundamental was founded in 2007 by Gottlieb and Dana S. Fusaris to invest in distressed municipal debts and properties related to them. The Post-Standard reports that "there are no municipal loans on the Hotel Syracuse, but there are lots of back taxes. The hotel owes $470,753 in taxes dating back to 2008"
The Post-Standard also reports that Ben Walsh, deputy commissioner of the Syracuse Office of Neighborhood & Business Development, said the city would consider seizing the hotel and selling it to Fundamental if the hotel’s owner, GML Syracuse LLC, or its creditors and lienholders do not pay at least $196,523 of its delinquent taxes by December 17.
The Syracuse Common Council and its economic development committee are scheduled to discuss the possible sale of the hotel to Fundamental on Wednesday. "We feel that Fundamental is in a position to renovate the hotel and put it back on the tax rolls, put it in a position to become a productive property again," said Walsh.
GML acquired the hotel in 2005 and announced plans to turn it into a mixed-use property with condos. An Israeli company, Ameris Holdings, acquired GML in 2006, but it went bankrupt after starting a renovation on the hotel.
The tax assessment on the hotel is $2.96 million, but Fisher said the building’s market value likely is less than that.