Niagara Gazette

July 24, 2013

City council heading to a hotel vote?

By Justin Sondel justin.sondel@niagara-gazette.com
Niagara Gazette

Niagara Gazette — The future of a proposed $25 million hotel project in downtown Niagara Falls remained uncertain late Tuesday.

On the eve of what is expected to be a council vote on whether to reconsider an agreement that would see the transfer a parcel of city-owned land to allow Buffalo-based Hamister Group to build a hotel on the site, city council Chairman Glenn Choolokian said he intends to hold firm to his position that the terms of the deal are not in the best interest of Niagara Falls or its residents.

“It’s not going to be sold for $100,000,” Choolokian said, referring to the current amount listed for the land located at 310 Rainbow Blvd. in the terms outlined in the development agreement.

The future of the deal may ultimately depend upon the votes of Choolokian’s colleagues in the council majority — Sam Fruscione and Robert Anderson Jr. 

Anderson did not indicate which way he would vote when reached for comment on Tuesday. He said he still has a lot of questions and will wait to talk to his colleagues today before making his decision. 

Fruscione, who was out of town on vacation in recent days, indicated last week that he was not prepared to disclose how he intends to vote on the matter during tonight’s council meeting. 

On July 8, the council majority voted to table a development agreement that would have allowed the project to move forward under the negotiated terms.

All three council members expressed concerns over the $100,000 the city would get in exchange for the parcel under the proposed development agreement involving Hamister, the city and the state-run USA Niagara Development Corp.

They have consistently pointed to an email Choolokian received from City Assessor James Bird who estimated earlier this month that the land could be worth between $1.5 million and $2 million.

Bird has since told the Niagara Gazette the numbers he provided in the email were a rough estimate, not meant to be used as fact.

“I made a mistake by even saying that,” Bird said.

Bird said he encouraged city leaders to have a professional appraisal done on the site, as his expertise is in residential and not commercial real estate.

The land is assessed at $215,800 by the city assessor’s office, according to the office’s property database.

If the appraisal lists the market value as being far above the $100,000 quoted in the agreement that does not guarantee that the parcel would sell for that price, according to Bird.

“Even if an appraisal comes in at $800,000 it doesn’t mean you are going to sell it the next day,” Bird said. “You could end up sitting on it.”

On Tuesday, when presented with Bird’s comments, Choolokian said he has not sought out an appraisal from an outside commercial real estate firm, as it would only be another cost to city taxpayers.

“That’s something that USA Niagara or the city of Niagara Falls should have done originally,” Choolokian said.

Councilman Charles Walker and Councilwoman Kristen Grandinetti both voted no to tabling the resolution and both have said they intend to make a motion to remove the measure from the table for a vote at Wednesday’s council meeting.

Choolokian and Fruscione both have expressed support for the project in the past. The council voted to establish Hamister Group as the preferred developer during a Feb. 22, 2012 City Council meeting.

Fruscione, then council chairman, publicly supported project in a press release dated Feb. 23, 2012 put out by the Empire State Development Corp., the state office that oversees economic development across New York.

“The Hamister proposal for 310 Rainbow Blvd. holds significant potential for our downtown and the City Council is pleased to support this project,” Fruscione said in the statement. “It will build upon the positive momentum generated by the (Niagara County Community College) Culinary Institute and the cooperative efforts of the city and state to develop our tourism corridor.”

During that meeting, Choolokian asked USA Niagara President Chris Schoepflin about the city’s contribution of the land as an incentive for the developer, suggesting he understood at the time that the city would allow the land to be turned over as part of its support for the project. 

“Are we still on track that this is going to cost the city of Niagara Falls no money other than giving you guys the land?” Choolokian said during the meeting.

The city was to give the developer land under the original agreement. During negotiations that changed and Hamister Group agreed to pay the city $100,000 for the downtown parcel.

Choolokian said his question during the 2012 meeting was a simple clarification on what might happen, but that nothing was “concrete” at that point in time.

As time went by, the council was not made aware of details of the agreement as they emerged, according to Choolokian. After investigating the value of the land on his own, Choolokian grew more concerned that the city was making a mistake, he said.

“Nothing was ever brought back to us,” Choolokian said.

Walker and Grandinetti have both said all council members were fully informed about the details of the project throughout the negotiation process. 

“We were pretty much given all the information we needed to make a decision,” Walker said during an interview last week.

Mayor Paul Dyster, who has supported the project since Hamister Group was announced as the preferred developer, said his administration believes the property is worth more than the $100,000 associated with the parcel in the deal.

But, the city will be able to attract $22 million in private money by including the parcel in the deal, he said.

“The donation of the property to the developer is the city’s contribution to getting the project done,” Dyster said.

mug of Anderson, Robert Robert Anderson Undecided on vote