Niagara Gazette

July 24, 2013

While Hamister watches, council majority refuses to move project forward

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

Niagara Gazette — A development deal that would see a $25 million mixed-use building go up in downtown Niagara Falls is still alive, but it’s on life support.

The city council voted to keep a proposed development agreement between Buffalo-based developer Hamister Group, USA Niagara Development Corp. and the city tabled during Wednesday’s council meeting after voting to shelf the agreement at the July 8 council meeting. The legislative body does not meet in August, meaning that the issue will not come up for a vote until at least September unless a special meeting is called.

After the council meeting, Mark Hamister, the chairman and CEO of Hamister Group, said his company will walk away from the project if lawmakers do not come to terms and move the process forward soon.

“We are going to try and stay patient for at least another month or two while the appropriate elected officials work out the issues that they have and advance questions,” Hamister said.

But if the agreement does not move forward under the terms that have been negotiated the company will pull up stakes on the project, Hamister said.

“We have enough projects to do elsewhere,” he said.

Hamister said in the coming weeks he will travel to cities — Pittsburgh for example — where he is “highly welcomed” to discuss projects similar to the proposed Falls build.

“This is the only city on our list of projects at the current time where we are experiencing this level of frustration,” he said.

The council’s 3-2 vote to table the agreement at July 8 meeting came after members of the council majority — Council Chairman Glenn Choolokian, Councilman Sam Fruscione and Councilman Robert Anderson, Jr. — began raising questions about the value of the land the city would transfer to the developer for $100,000 as part of the agreement.

Councilman Charles Walker made a motion to remove the item from the table at Wednesday’s meeting which was seconded by Councilwoman Kristen Grandinetti.

The majority again voted to keep the agreement tabled, with Walker and Grandinetti voted to put it back on the agenda for action.

Choolokian said the process of negotiating the deal between the Hamister Group, USA Niagara and the city happened behind closed doors.

“We should have been updated every step of the way from day one,” Choolokian said. “They talk about transparency. We had two meetings in 16 months.”

But both Grandinetti and Walker said they never felt shut out of the process and that all the information needed to make a decision had been made available to all council members.

“The sale of the property is the city’s part of the development agreement,” Grandinetti said. “The council majority understood that all along.”

Hamister would invest $22 million in the project while USA Niagara will invest $2.75 million and the city will give the developer 310 Rainbow Blvd. for $100,000, according to the terms outlined in the development agreement, a nonbinding document that serves to outline terms before a final contract is executed.

The parcel, which currently serves as a parking lot operated by a group of business men who lease it from the city, was gifted to Niagara Falls by Cordish Co., the development company that handed over the Rainbow Centre mall building to Niagara County Community College in 2010.

The council majority argues that the land is worth more than the $100,000 outlined in the deal, citing an email from city assessor James Bird in which he estimated the market value to be as much as $2 million despite his office’s assessed value of $215,800.

Bird later told the Gazette that he was only providing a rough estimate in his email to Choolokian and said he suggested that city lawmakers have a professional appraisal done.

Choolokian has said that he wants Hamister Group to pay more for the land.

Hamister said that would be a deal breaker.

“If they even want $300,000 or $400,000 from us for the price of the land then they need to find a new developer,” Hamister said. “I am history. I will withdraw. That is not the deal I proposed and, just as importantly, that is not the deal I negotiated in good faith.”

Hamister said that if council members had issues with the price of the land they should have raised them when the deal was first brought before them, not after the company had already spent hundreds of thousands of dollars preparing to begin work.

“It should have been an issue placed upfront, not at the back end when we’re about to hire architects and put a shovel in the ground,” Hamister said. “That’s not the way that development happens in any community on the entire east coast of the United States where I’ve been developing for 36 years.”

Contact reporter Justin Sondel at 282-2311, ext. 2257