Niagara Gazette — The future of a $25 million hotel project in downtown Niagara Falls looked to be on the verge of falling apart on Thursday while city and state officials fought to keep the developer from walking away.
The anxious moments were a result of an anonymous political mailer circulated Tuesday touting city councilman Sam Fruscione’s questioning of the deal and characterizing Mark Hamister as a con man trying to fleece the taxpayers of Niagara Falls.
The Hamister Group, the developer selected to build on a city-owned parcel through a state procurement process, announced that it would hold a press conference at the firm’s Williamsville offices Thursday afternoon, but cancelled that press conference Thursday morning.
Local NBC affiliate WGRZ said the purpose of the press conference was to announce that the developer would be walking away from the deal, though they did not cite the source of the information.
Mayor Paul Dyster said the company had not told him what the purpose of the press conference was, but that he was trying to set up a meeting with Mark Hamister, the company’s chairman and CEO and Chris Schoepflin, the president of USA Niagara Development Corp., the local arm of the state’s development office.
Later in the day Thursday, Dyster reported Gov. Andrew Cuomo had spoken to Hamister and several local officials.
“He wanted to make sure that everyone knew that the project was important to his economic department strategy in Niagara Falls and the surrounding region,” the mayor said.
Dyster said he spoke to a representative from Hamister Group on Thursday in an effort to set up meeting to discuss project today, but did not think it would happen. Dyster said he felt having a meeting before the end of the week was less critical in light of Cuomo’s discussion with Hamister himself.
USA Niagara is the lead agency on the procurement process known as a request for proposals on the 310 Rainbow Blvd. parcel.
Representatives from the Hamister Group, USA Niagara and Gov. Andrew Cuomo’s office did not immediately return calls seeking comment.
The development deal has become politically charged in recent months with a trio of city council members – Council Chairman Glenn Choolokian, Councilman Sam Fruscione and Councilman Robert Anderson Jr. – calling into question the terms of the proposed development agreement that has been in the works since February when Hamister Group was selected as the preferred developer for the parcel.
Those council members voted to table a resolution to approve the agreement between the developer, the state and the city at the July 8 council meeting. It has remained tabled since.
The city received the land — a parking lot with a small building that currently houses a restaurant — as part of a gift that included the former Rainbow Centre mall building from Baltimore developer David Cordish in 2009.
The proposed agreement would see the land sold to Hamister Group for $100,000 and the company receive a $2.75 million state grant in exchange for a promise to complete the $25.3 million mixed-use building which would include a hotel, residential space and retail space.
The lawmakers calling the deal into question have said that the sale price for the prime piece of real estate is too low and that Dyster is afforded too much power in the proposed deal.
Corporation Counsel Craig Johnson has been working with USA Niagara and the developer in an effort to address the concerns of the council members.
Schoepflin has acknowledged that the price of the land is below market value by design, and has said it is part of an incentive package that will leverage tens of millions of dollars in private investment.
Fruscione said Thursday night he has always been supportive of the project and has asked questions of USA Niagara and the developer to ensure that city residents don’t get a raw deal.
“I definitely support the project,” he said. “I definitely support it going forward. I just need to put some protections in the agreement for the city. I think everything is going to turn out fine.”
Fruscione said he had no idea who had sent out the mailer and had never heard of the Western New York Progressive Caucus before being asked about the group by a Gazette reporter.
“I’ve never heard that name before,” he said.
Fruscione is running for reelection this fall and will face a primary for the Democratic line in the general election next week. He is up against fellow council members Kristen Grandinetti and Charles Walker and challenger Andrew Touma, who have all voiced strong support for the project as it has been proposed. The candidates are fighting for three available lines.
While he admitted issues surrounding the hotel project are not resolved at this point and the project’s future remains unclear, Dyster said he remains hopeful that it can still move forward.
“It’s still about shifting one or more members of the Niagara Falls City Council to get people to approve something that should have been approved when it first came up for a vote,” Dyster said. “That’s still the challenge that’s in front of us.”
Contact reporter Justin Sondel at 282-2311, ext. 2257