The oft-delayed and financially challenged effort to revitalize the former Hotel Niagara has now ended up in State Supreme Court.
Merani Hotel Group, and its owner, Faisal Merani, have filed a complaint against Brine Wells Development LLC, its owner Edward Riley and Hotel Niagara Development LLC, claiming a breach of a contract that called for the two companies to work together on the troubled renovation and redevelopment project.
Merani claims in the lawsuit that Riley and his companies designated him and his company as the “sole agent and representative ... to seek approvals from Empire State Development (ESD) and to enter into contracts related to the development.” ESD acquired the former grand hotel in 2016 for $4.4 million and has been attempting to revitalize it ever since through its local agency, USA Niagara (USAN).
USAN designated Riley and his firm as their preferred developer a year later. However, the project has been plagued by failed financing efforts and derailed by the COVID-19 pandemic.
The 12-story building, located in the heart of the city on Rainbow Boulevard, is widely regarded as architecturally and historically significant, having once catered to several high-profile guests including Marilyn Monroe and Frank Sinatra. Opened in 1927, the building is listed on the National Register of Historic Places.
In 2019, Brine Wells joined USA Niagara officials to announce a plan to renovate and restore the property as a 160-room “upper-scale hotel with restaurants, lounges and banquet facilities. At that time, officials anticipated Brine Wells would secure state and federal historic preservation tax credits worth a projected $10.6 million for the project, which was touted as the “largest historic rehabilitation project ever in the City of Niagara Falls.”
The hotel was originally expected to reopen in 2021.
In its lawsuit, the Merani group charges that Riley has accomplished “virtually nothing ... beyond stabilizing the building” since 2017. In 2023, Merani says his organization entered into a contract with Riley and his company to “get the project off the ground.”
Merani also claims the contract envisioned the creation of a joint venture for the project that would leave Riley with a 49% ownership stake and Merani with 51%. Over a period of 15 months, Merain’s suit claims he and his company “worked ceaselessly to obtain financing” for the project, at a cost of $45,000.
The suit claims that when USAN allocated more than $4 million to the project, $1.9 million of that funding came from a previously approved Merani project.