OTB hotel expansion delayed

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Hotel at Batavia Downs. Photo by Garrett Looker

A planned expansion of the Batavia Downs hotel is on hold, possibly for as much as a year, officials with Western Regional Off-Track Betting Corp. announced Thursday.

Outgoing CEO Henry Wojtaszek said the agency put the 73-room addition on pause after two estimates solicited from Buffalo-based developers came in above expectations. The pause could last six months to a year, he said.

According to Wojtaszek, both The Krog Group and Ciminelli Real Estate estimated the project would cost around $16 million. Both offers were far above what the agency had hoped to spend on the project, he said.

The announcement of the pause came alongside incoming CEO Byron Brown telling board members he and other leaders had designed a “conservative” budget for 2025. Next year’s spending plan, he said, is focused on keeping costs down and managing a reduction in horse-race betting, a decades-long trend. At the same time, leaders hope to send additional money to the 15 counties and two cities that own the corporation. 

“Our goal is to increase disbursements,” Brown said. “The plan has been prepared in a very conservative way to give us the opportunity to do that.”

The hotel expansion pause follows a March vote by the board to spend $106,000 on architectural plans and a market analysis in preparation for the project. The board voted then to pay Orchard Park-based Bammel Architects $76,000 to design the expansion and $30,000 to Spectrum Gaming Group to evaluate the expansion’s pros and cons. 

For months, OTB leadership has said the hotel is regularly between 94 and 96 percent occupied, leading them to believe an expansion was necessary. 

Not expanding the hotel means “we’re limited in our growth,” Chautauqua County board member Vincent Horrigan said.

Brown agreed.

“That’s one of the reasons why the board was looking at the expansion of the hotel, because the hotel has provided opportunities for additional financial growth of the corporation,” Brown said.

The hotel at Batavia Downs has been controversial for nearly a decade.

In the spring of 2015, OTB, then under Republican control, voted to sell approximately an acre of land adjacent to the Batavia Downs casino to a group of investors who had joined together as ADK Hospitality, LLC. 

Among  the investors were Kent Frey of Frey Electric Construction and David McNamara, a partner at the Phillips Lytle law firm — both significant Republican donors. Additional investors included Anthony J. Baynes, a former chair of the Erie County Fiscal Stability Authority, and James and John Basil, who own car dealerships.

ADK Hospitality spent $5.5 million to build the 84-room hotel, buoyed by $600,000 in tax breaks from the Genesee County Industrial Development Agency. The hotel turned a profit each year until the pandemic. In 2021, OTB bought the hotel for $7.5 million.That purchase, done through a bond, raised concerns with Erie County Comptroller Kevin Hardwick, who has questioned the project for the past two years.

Hardwick in July 2022 sent a letter to OTB management indicating he had “serious questions” about the hotel’s development and management, as well as OTB’s eventual purchase of the property.

Among Hardwick’s questions:

• Why would OTB engage a group of investors — many of them big political donors to Republicans — who had never developed a hotel before? Who approached whom?
• How was the sale price for the land determined? 
• Who initiated OTB’s purchase of the hotel? And who set the price?

Wojtaszek, the OTB president and CEO, instructed his staff not to respond to the comptroller’s inquiries, writing in an email that Hardwick’s questions were “designed to harass & intimidate our organization” and the comptroller’s office “can FOIL the documents.”

Hardwick’s deputy, Timothy Callan, now represents Erie County on the OTB board and controls the greatest number of votes following last year’s Democratic takeover.

Callan, in the spring, voted against plans to study the hotel’s expansion.

This story has been updated. Investigative Post reporter Geoff Kelly contributed to this story.

J. Dale Shoemaker