By Justin Sondel
Niagara Gazette — Proposed tax break agreements for a pair of hotel projects in downtown Niagara Falls faced some opposition during public hearings held Wednesday at city hall.
The first project - the renovation of the former Moore Business Forms office building on Buffalo Avenue which would be converted into an 84-room Courtyard Marriott - is supported by the city. But, certain aspects of the tax abatement that the building's owners - Indian Ocean, LLC - are seeking are excessive, Mayor Paul Dyster said.
"We think this is a fantastic project and we're going to try to find a way to make it happen," Dyster said when reached by telephone following Wednesday's hearing held by the Niagara County Industrial Development Agency. "But, we want to get what we can for the taxpayer."
Clara Dunn, a representative from the city's economic development department read a statement into the record on behalf of the city during the NCIDA hearing. The public hearing is a precursor to a formal vote on the application for financial assistance through the agency.
"The city of Niagara falls cannot, as a general rule, support any enhanced (payment-in-lieu-of-taxes agreement) without clear economic justification," Dunn said.
Indian Ocean, LLC is owned by the Patel family, which owns and operates the Econolodge on Buffalo Avenue. The Patels have applied for an Opportunity Zone Program abatement and a 15-year PILOT, meaning they would pay no taxes or have a reduced tax rate on the Marriot property for 20 years.
The NCIDA has estimated that the company would receive about $1.1 million in tax breaks during the time period. The owners of the new hotel have committed to creating what amounts to 28 full-time jobs, according to the project summary from the NCIDA.
Dyster said the project should be eligible for the standard 10-year PILOT, but not the 15-year deal normally reserved for industrial projects.
As for the Opportunity Zone Program, which offers complete property tax abatement and relief from sales tax on building materials for five years, Dyster said it is meant to spur development in areas of the city that most investors would not dream of touching. The hotel project - to be located at the corner of Buffalo Avenue and John Daly Boulevard - is in a spot that is desirable for developers, Dyster said.
"The opportunity zone was created for different purposes," Dyster said.
The city is working with the Patel family to try to find alternate funding sources to make the project viable. The company has been in contact with representatives from the state's development arm in the Falls, USA Niagara Development Corp., and is beginning to put together applications for various programs, Dyster said.
The mayor stressed that the city is fully supportive of high-end hotel projects like this one for a downtown that has a shortage of top-notch accommodations.
"We want to give every dollar that we need to to make sure that the project is a go," Dyster said. "But not a dollar more."
Nirel Patel is managing the new hotel project for his father, B.F. Patel. He said the project needs the tax breaks to remain viable and that other hotel projects have received similar deals.
"We're just asking the city to be more considerate," Patel said.
Patel said he will continue to work with the city to make sure the project continues to move forward.
"It's one step in a very long trail that will lead to a completion of this," Patel said. "I was just hoping that the city would choose to move this on a little quicker than what it would normally take."
Niagara Street Business and Professional Association President Ron Anderluh spoke in favor of granting the Patels the full extent of the tax relief for which they have applied.
"Mr. Patel, to me, has proven that he's been a good neighbor, he's been a good business person and he's willing to invest money here in Niagara Falls," Anderluh said.
The second hotel project seeking tax breaks involves a proposed renovation of the Comfort Inn located on Prospect Pointe. The owners - Maid of the Mist Hospitality, LLC - are seeking a 10-year commercial PILOT that would save the company $743,000 during the course of the agreement. The renovation, which the owners say is necessary for the hotel to retain its Comfort Inn flagship, would retain the equivalent of 40 full-time jobs and would add the equivalent of three full-time jobs, according to the project summary from the NCIDA.
The mayor's office did not send a representative to speak on this tax break at the hearing because it is in support of it, Dyster said.
"We have no objections to this deal because it is a standard 10-year PILOT," Dyster said.
Many downtown hotels have received tax breaks for renovations, Dyster said.
"We don't want our hotels to lose their flags," Dyster said. "We want to help them upgrade if possible."
Several people spoke out against the tax break deal for the Comfort Inn site, saying that the owners should not get a tax deal simply because they need to renovate their own property to maintain its flagship.
Richard Smith, chairman of the Niagara Falls Planning Board, said the company must have known that the renovations would be needed when they purchased the building.
"I don't feel the city taxpayers should have to burden the pain for their renovations," Smith said.
Smith said the number of jobs the company says it will add are not worthy of the amount of money the company will save in taxes.
"If (the NCIDA) give this PILOT, I'm coming back with an application to have my house done," Smith said.
Public comments solicited during both hearings will be taken into consideration when the NCIDA's board meets at a later date to consider the tax break applications for approval.