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SOLD! Frontier House has new owners

by jmaloni
Tue, Feb 12th 2019 03:10 pm
The Historic Frontier House in the Village of Lewiston.
The Historic Frontier House in the Village of Lewiston.

**UPDATED WEDNESDAY**

Ellicott Development CEO, local developers team to save historic Lewiston property

By Joshua Maloni

Managing Editor

What was once the “finest hotel in the United States west of Albany” may one day return to that splendor thanks to a deal struck on Tuesday.

The 195-year-old Frontier House was sold to a limited liability company, 4600 LLC Group, consisting of Ellicott Development CEO William Paladino and Lewiston developers Jeff and Jerry Williams. Their newly formed LLC purchased the building and almost one acre of land – including a parking lot – from Hastings Lewiston Inc. for the price of $800,000.

A deal was struck following a series of conversations between Paladino and Village of Lewiston Mayor Anne Welch. Prior to her taking office last summer, she said a private developer should take ownership of the Frontier House, which has sat vacant since former tenant McDonald’s Restaurant opted to leave at the end of 2004.

Jeff Williams said, “I’m excited to see the future.”

He explained, “Without Anne Welch, the group of individuals that came together wouldn't have been together to do this project. She has, from the day she was elected, been working exceptionally hard to make sure that whoever owns the Frontier House was going to develop it, and develop it well. And that is what we hope to do.”

The Frontier House is located at 460 Center St., in the heart of the business district.

Paladino, Ellicott Development and Lewiston Ties

Buffalo property management firm Ellicott Development owns the land at Center, North Eighth and Onondaga streets, site of a future mixed-use plaza. Paladino first met with village trustees following his company’s acquisition of the parcel in the fall of 2012. Welch was village clerk/treasurer at the time, and later served on the Planning Commission. 

Last June, the Village of Lewiston signed an intent to purchase contract for the Frontier House with Hastings Lewiston. Welch didn’t favor this idea, and appeared before the board to encourage another option.

During two due diligence periods, Welch reached out to Paladino to gauge his interest in the Frontier House. She said Ellicott Development would be the ideal suitor to restore and reopen the historic, 4,300-square-foot building.

A key provision in the village’s agreement stated the board could designate an outside agent to complete the transaction.

“When I drafted the contract, I put in two things: One, at the very heading, when it said who the purchaser was, I put the Village of Lewiston or its nominee. And then I put up a rider to the contract, and at the end of the rider I clearly indicated the village had the right to assign the contract,” counselor Joseph Leone said upon news of the LLC’s purchase.

Ellicott Development’s website calls the company “a full-service real estate management and development company with over 40 years of experience in Buffalo, Upstate New York and Western Pennsylvania.” Its Facebook page further notes Ellicott Development “has grown to become a multi-faceted, fully integrated property management, leasing, development and construction firm controlling over 5,000,000 square feet of real estate” across New York and Pennsylvania.

While that’s a stellar resume, Welch’s confidence, she said, is in Paladino, with whom she often worked as he presented plaza proposals to the Planning Board.

“He's been terrific,” Welch said. “For Eighth and Center, he did everything that we asked him to do to change the plan and make it work. He's such a gentleman,” and, despite five years of requested plaza revisions, “he's never lost his patience. He just continued on, and that's going to be a great project. The Frontier House is going to be a great project. Both of them are going to be such assets to the Village of Lewiston.”

Finding a private developer for the Frontier House was Welch’s No. 1 priority when she was elected mayor. Now that she has one in place, “I feel relief; total relief,” she said. “I am so excited, because everyone has wanted to see that sold and restored, and I think it's finally going to happen now.”

During the plaza talks, residents would joke with Paladino about him buying the Frontier House. At that time, he said he wasn’t interested.

On Wednesday, Paladino explained his change of heart. He cited “The timing now and also the new mayor’s input into working with us to redevelop the building. She has done a lot of research herself as to what assistance is out there to help with the costs with redeveloping.”

Both Jeff Williams and Paladino said there are no future plans to share at this time.

What Is, and What Needs Work

The Village of Lewiston took Hastings Lewiston to Town of Lewiston Justice Court last year in an effort to compel the company to make repairs to the Frontier House – particularly to the exterior. However, once an agreement to purchase was in place, Leone asked The Hon. Justice Thomas Sheeran to dismiss the case without prejudice. This would allow the transaction to be completed, while also enabling the municipality to revisit the proceedings should a deal fall through. The judge granted Leone’s request.

Welch said Paladino has the know-how to restore the building. Additionally, she noted he “plans to do a boutique hotel with some condos.

“We have to go through the Planning Commission and the Village Board to make sure everything fits that lot” in terms of zoning.

Over the past two years, almost a half-dozen building experts, including architects, have told The Sentinel the Frontier House is structurally sound.

The basement, which was once a rathskeller, appears to be in workable condition – though it has three decades of inactivity. Prior to that, part of the underground level was used for birthday parties.

The Center Street ground level is where the fast-food chain operated, and remnants of that company could still be seen when this writer last walked through the building in December 2017.

Three upper floors show damage from a fire, as well as some rickety stairs – but also offer a large meeting area, a fireplace, handfuls of rooms, and unequaled views of the village’s business district.

In a June 2015 interview with The Sentinel, Realtor Bruce Andrews marveled, “You had 18 guys cutting stone for a year for this building. That's all they did; they just cut stone so they could put the stone up. You just can't find that kind of thing (today)."

"You can still see the grain in the wood," he added. "There's some serious history here.”

"The bark is still on the tree," Andrews said as he patted his hands on the roof's limbs. "How do you appraise a value on a building that was made by men who cut trees down and used them for rafters? That's the incredible history of this building.”

Paladino said he is confident in the building’s viability. 

“My structural engineers advised the bones to the place are still good, and its uniqueness and history attracted us,” he said.

On the historiclewiston.org website, the Historical Association of Lewiston noted the Frontier House, when built in 1824, was the “finest hotel in the United States west of Albany.” It was built by Joshua Fairbanks, Benjamin Barton and his son, Samuel.

HAL wrote, “Stage coaches once thundered up to its doors at a time when Lewiston was the center of the ‘Great Overland Route Across the Continent.’ The Frontier House is constructed of stone (within its 30-inch walls) from the Bay of Quinte at the northeastern end of Lake Ontario.”

Hastings Lewiston Tried to Restore Building

In the past decade, former owner Richard Hastings (and later his son, Alan) made offers to restore the Frontier House. They persistently sought avenues for secondary revenue streams to finance construction. Richard wanted to erect living units above the parking lot, while Alan looked to open a microbrewery.

Richard, then in his mid-70s, could be seen outside the building, often on a ladder, or the roof, personally making repairs to the structure. Alan and former business consultant Stacey Sheehan, meanwhile, diligently sought grant money to restore the building. They were stymied by provisions regarding what a private developer must do to qualify for grant money, as well as limitations on how funds could be used.

When the deal with the village was signed last summer, attorney Joseph G. Makowski, who represented Hastings Lewiston in Town Court, said, “My client's actually selling this property at a loss on investment. Because of his age, he thought it was appropriate (in 2017) to sell it, and did receive an $850,000 offer. But even at that price, I believe he has approximately $1.3 million, $1.4 million into the building.

"That being said, he either wanted to develop the property or get the property into the hands of a third party who could develop it. … (He) has continued to attempt to either secure the funding necessary to develop it directly or with a third-party developer, and/or sell it."

Makowski said, "The village ... I think they recognize the strategic importance of the Frontier House to the economic development of the business area ... and made a determination it was in the best interest of the village and, more specifically the commercial area, that they undertake the purchase of it and then begin to think through and act upon finding a third-party developer who will assist them in going forward. …

“(Richard Hastings) recognizes its importance to the village, in terms of its history; its historical significance. And he's worked very hard for many years to try to develop it and maintain the residence."

The Frontier House is listed on the National Register of Historic Places. Richard Hastings purchased the property in 2000.

On Wednesday, Alan Hastings said his father “doesn’t really have the time and energy to make the project happen. It was definitely his dream. He’s very sad to let it go. He did not want to let it go.”

Still, he said the Hastings family is content to close this chapter of their lives, and pleased the property will continue on with new owners. Alan Hastings said his father went out of his way to work with the village in finalizing this deal.

“I just pray that good things come out of it, for the Frontier House and for the village,” he said.

Frontier House’s Recent Timeline

In March 2015, former Town of Lewiston Supervisor Dennis Brochey publicly pondered if his board should make an offer to buy the Frontier House. At that time, Brochey said, “Off and on, Richard Hastings and I would talk about his plans for the Frontier House and how he would like it to be restored to its glamour. Over the last several months, Richard has said to me that he's getting tired and wanting to spend more time with his grandchildren, but he never stopped talking about his vision of the Frontier House.”

Negotiations broke off when an assessment of the building by GAR Associates Inc. determined the property was worth $750,000. That figure was considerably less than the initial $1,695,000 asking price Hastings Lewiston would seek just two months later.

In the fall of 2017, a private company from Texas signed an agreement to purchase the Frontier House. United Renovations opted out upon the rejection of its lower counteroffer. In January 2018, at the end of a due diligence period, Alan Hastings said his family would not accept a price of $450,000.

In June 2018, Terry Collesano and the Village Board agreed to the Hastings’ new asking price of $800,000. Leone said the Board of Trustees would seek up to $400,000 in outside funds, possibly through Greenway money via an intermunicipal agreement with the Town of Lewiston.

Collesano, a two-term mayor, said, in part, “The Frontier House is the symbol of Lewiston's character and culture. It is part and parcel of our rich heritage and embodies the hopes and dreams of our citizens. Some may look at it as just a building, but it is our touchstone to the past that will shape our community's future. …

"Finally, we have a plan that will move us forward to our goal of complete and total restoration, so the Frontier House can be revived to its original glory."

As part of the purchase agreement, the Village Board had three opt-outs. The deal could be cancelled if the municipality couldn’t obtain financing, found a lack of public support for the purchase, or had reasonable concerns about the building or property discovered in the due diligence period.

Collesano explained, “Our intention is to turn the Frontier House over to a new nonprofit organization called the Frontier House Restoration Corp., an accountable 501(c)(3) organization that will be led by experienced and capable volunteers who have the best interest of the Frontier House and Lewiston at heart.”

Welch was elected the following week, and soon after held a public hearing on the purchase plan. Residents expressed concerns about the costs to buy, refurbish and reopen the Frontier House. Subsequently, the mayor actively engaged local developers and business owners to complete the transaction. She pledged to work with the next owner(s) in finding grant money.

“The taxpayers don’t want it,” Welch said recently. “Once you take ownership of that building, it comes off the tax rolls, and then the people are saddled with it for the rest of their lives. It might’ve worked with a non-for-profit for a while, but what happens if they go out – and then you got a vacant building again. And then you’ve got to get somebody in there. And in the meantime, the village has to maintain it.”

She reiterated, “We're not in the real estate business. That is meant to be a hotel or (public property) for people to go in and to appreciate it, and to see it, and enjoy it. The village owning it was just a bad plan; and it could never go back to private (ownership) once it was public, because you have to pay all that grant money back (funds used by the village to pay for or fix the building).”

In October 2018, the Village of Lewiston asked Hastings Lewiston for a 60-day extension to the due diligence period. It was at that time, Welch and Paladino began to have serious conversations about his interest in the Frontier House.

Paladino and his team were said to have had at least two walk-throughs of the five-floor building before agreeing to make the purchase.

The specific principals within 4600 LLC Group are 7112 Group LLC, of which Paladino is a member; Jeffrey Williams; and the Jerome Williams Trust.

With regard to the connection between the LLC and Ellicott Development, Paladino said, “We form holding companies for all our developments.”

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