Niagara Gazette — The Niagara Falls City Council majority is standing its ground when it comes to selling a city owned parcel at 310 Rainbow Blvd. as part of a larger effort to build a $25 million multi-story hotel and mixed-use building.
We strongly disagree with their position.
Their concerns about the project are based primarily on the value of the land itself.
While the state-run USA Niagara Development Corp. would like to sell the property — less than an acre in total — to the Buffalo-based Hamister Development Corp. for $100,000, Council members Glenn Choolokian, Sam Fruscione and Robert Anderson Jr. believe it to be worth several times more, perhaps as much as $2 million by City Assessor Jim Bird’s estimate.
While the asking price for the land is important, is not the most important element to be considered here.
As supporters of the project have noted, the potential return of this project is far greater than cash earned off the property transaction.
It’s important to remember: The city did not even own this land until it was gifted to it by Baltimore developer David Cordish when he agreed to release the old Rainbow Centre Mall.
The transfer served as the catalyst for Niagara County Community College’s culinary center, a $25 million development that was funded, in large part, by the state of New York itself. In addition, the agreement resulted in $10 million worth of state-supported improvements to the city’s downtown parking ramp, a long dilapidated structure in dire need of costly repairs the city could not afford on its own.
The Hamister project represents another $25 million investment downtown, with the developer on the hook for $22 million of the total package. The deal represents a 9 to 1 investment ratio, one of the highest in New York, according to state economic development officials. In other words, for every $1 invested by the public entities involved, $9 will be invested by the Hamister group.
There are other factors to consider as well, including the roughly $100,000 in parking ramp revenues the city expects to receive annually once the hotel is open and in need of parking spaces for its customers.
Compare that to the $27,000 the city has been receiving each year under the current lease agreement at 310 Rainbow Blvd., which a group of local businessmen have been using as a parking lot in recent years.
In addition to the investment figures, there are literally hundreds of jobs at stake here, both in terms of construction work while the building is being built and in full- and part-time positions that will be needed once the hotel begins operation.
As with any proposal of this type, questions need to be asked and answered before the city signs off. The council majority did its job and raised some valid points. The asking price for the property is certainly worthy of scrutiny.
However, it should not be a deal breaker, not when tens of millions of dollars in private investment is at stake and not when so many jobs are on the line in a community desperate for them.
We strongly encourage the council majority to pull the Hamister agreement off the table and approve it so construction can begin.
The city does not need, as Empire State Development Corp. President and CEO Ken Adams pointed out recently, to send another “wrong message” to the Hamister group. Nor does it need to take action that may deter other developers from considering investment in our community in the future.
Over the years, Niagara Falls has developed an unfortunate reputation for being a place where good projects go to die, often due to infighting, poor decision making and petty politics.
In this case, the city has a potential success story just waiting to be written.
The last thing the community needs is yet another cautionary tale, the kind that reminds us all why investors are so often reluctant to do business in Niagara Falls.