When the Hotel Lafayette shuts down April 1, it will be the first time in 106 years the

downtown landmark will be empty, business leaders say, and its planned renovation could be

derailed.

It will become the second prominent downtown building to be boarded up in recent months.

The Statler Towers was closed in January.

Managers at the Hotel Lafayette said that the building at Washington and Clinton streets

has been hemorrhaging money and that the New York City owners want it shuttered within four

weeks.

&#8220It&#8217s costing vast thousands of dollars to keep the building open,&#8221 said

Tim Jones, chief building engineer at the Hotel Lafayette.

The January gas bill alone approached $39,000, he said.

Rocco R. Termini, the developer seeking public subsidies to help orchestrate the purchase

and a $35 million makeover of the building, said his plans for apartments, a boutique hotel

and banquet facilities are jeopardized by Albany. He said his project hinges on changes in

state regulations that would allow developers to sell tax credits to banks and insurers, who

are among the biggest potential buyers.

But if the Hotel Lafayette remains shuttered for a long period, Termini said, the structure

could be unsavable.

&#8220If that building closes, it will not last a winter. There&#8217s very delicate

ornamental plasterwork in that building that will be totally destroyed in one winter, and we

can&#8217t afford to have that happen,&#8221 Termini told the city Planning Board on Tuesday.

Audio: Rocco Termini discussing the Hotel Lafayette's future

News that the Hotel Lafayette is evicting the remaining 40 tenants and will be shuttered

within four weeks is sparking debate about the wisdom of giving public money to developers to

renovate old buildings.

It would be wrong for government to provide &#8220boatloads of public money&#8221 to

redevelop an aging building in a downtown that already has a glut of empty space, said Patrick

Hotung, whose Main Place-Liberty Group owns two buildings near the Hotel Lafayette.

Although no landlord wants a boarded-up structure near its properties, Hotung said, people

must face the sobering reality that the city is home to half as many people as 50 years ago.

&#8220I&#8217m surprised the Hotel Lafayette has stayed open as long as it has,&#8221

Hotung said. &#8220I&#8217ve always thought of it as more of a flophouse for vagrant and

homeless people.&#8221

When it was built in the early 1900s, the structure was praised as one of the top hotels in

the nation. In recent decades, the hotel has served as a single-room-occupancy building,

mostly for residential short-term emergency housing for clients of social services agencies or

organizations.

Henry L. Burns, a longtime city Planning Board member, waxed nostalgic Tuesday when he

learned of the Hotel Lafayette&#8217s closing. He recalled attending his high school prom in

the hotel&#8217s grand ballroom 52 years ago.

&#8220It was getting on its last legs in 1958,&#8221 he said. &#8220It has been in tough

shape for a long time.&#8221

The structure is currently owned by Alphonse Hotel Corp. of New York and Tran Dinh Truong.

Termini said his plans to purchase the property have been stalled by delays caused by

officials in the state&#8217s budget and finance offices. He said the project hinges on

changes in state regulations that, among other things, would give developers more flexibility

in selling tax credits.

During Tuesday&#8217s meeting, Termini rattled off a list of empty downtown buildings and

warned that Albany&#8217s delays could be &#8220the nail in the coffin&#8221 for downtown.

&#8220Buffalo is going to start looking like a ghetto,&#8221 he said. &#8220And we have the

bean counters in Albany deciding the fate of Buffalo. These are the people that have never

been to Buffalo.&#8221

A spokesman for the state Division of Budget said Tuesday it is &#8220not accurate&#8221 to

suggest that his office is blocking the revised law. Matt Anderson said such revisions are a

legislative function.

&#8220We&#8217re more than willing to have further discussions on this matter,&#8221

Anderson said.

Mayor Byron W. Brown called the Hotel Lafayette&#8217s decision &#8220very disappointing

news.&#8221 As for the delays in Albany, Brown vowed to continue to call on state officials to

move forward with modifications to the law as quickly as possible. He agreed with Termini that

there have been problems with the legislation that have &#8220rendered it ineffective.&#8221

&#8220I&#8217m surprised it&#8217s taken so long . . . but I will certainly weigh in and

stress to the governor&#8217s office how important it is to get those amendments made so these

major projects in downtown Buffalo can get the support and resources they need to be

renovated,&#8221 Brown said.

Termini is also seeking incentives through programs administered by the Erie County

Industrial Development Agency.

Jones, who manages the landmark building, confirmed that the remaining 40 tenants have been

given eviction notices. The Lafayette Tap Room, a popular bar inside the hotel, closed

Saturday , he said.

Jones said he will continue to serve as caretaker of the building when it closes.

The Planning Board gave its unanimous endorsement to Termini&#8217s project. Board member

Frank Manuele said he thinks the city should put pressure on Albany to approve changes in the

law.

&#8220I&#8217ve had a long-running dislike for the state bureaucracy,&#8221 said Manuele, a

former city planning director. &#8220They&#8217re not the bottom of the barrel. They&#8217re

underneath the barrel, as far as I&#8217m concerned.&#8221

News Washington Bureau Chief Jerry Zremski contributed to this report.