061004 Old Falls St 2 - NG

James Neiss/staff photographer Niagara Falls, NY - Charles A. Gargano, chairman of USA Niagara Development Corporation, Niagara Falls Mayor Vincenzo Anello and Christopher Schoepflin, president of USA Niagara, take a look at renderings of the $3.4 million reconstruction and streetscape project of Old Falls Street, before the ceremonial groundbreaking at the Conference Center Niagara Falls.

The developer leasing the concession rights for Old Falls Street said Wednesday he didn’t operate vending carts on the walkway this year because of ongoing construction, but he would like to host events like wine or jazz festivals in the space once a $3.2 million public project to rebuild the street is done.

Joseph Anderson, who runs the Smokin Joe gasoline chain and owns the Quality Inn on North Rainbow Boulevard, said he is also exploring the possibility of building a six-story hotel at the end of Third Street.

“We need hotel rooms in the Falls because we can’t even do a small event and we’re out of rooms,” Anderson said.

A limited liability corporation controlled by Anderson called East Mall Entertainment entered into a no-bid agreement with the city in 2004 to lease the vending rights for the tree-lined Old Falls Street pedestrian walkway, which runs between Third Street and Rainbow Boulevard North.

Construction is slated to begin on the walkway this month for a streetscape project designed to allow vehicular traffic back on the road during off-peak times. The $2.6 million project includes adding a prefabricated cobblestone street, new sidewalks, elm trees and limestone “table rock” benches.

The state economic development agency USA Niagara Development Corp. has already spent nearly $600,000 on design work for the project.

USA Niagara Chairman Charles Gargano joined city and state lawmakers in a groundbreaking ceremony on the street Wednesday morning. Anderson was one of about two dozen people who attended the event.

“Today we’ve reached another milestone,” said Gargano, adding that the state has “recognized the importance of the jewel that we have in our state and that is Niagara Falls.”

The project is designed to improve the walkway to encourage more traffic on the block, which also serves as the entrance to the state-run Conference Center Niagara Falls. On the north side of the block, the state is paying $6 million toward a project by the Pheonix-based corporation Namwest to renovate the Holiday Inn Select into a Crowne Plaza.

Doug Williams, director of operations of hospitality and resorts for Namwest, said the cost of hotel renovation has risen to more than $30 million and will include a Starbucks coffee shop, a restaurant, a sports bar and three fast-food counters. The project was originally slated to cost $22 million.

Anderson said he has been looking forward to the hotel renovation bringing national names to the block.

Because of hotel construction that has blocked about 10 feet of the north side of the street, Anderson said he chose not to operate any vending carts on the block this summer. The conference center is also under construction.

“I took a beating this year because it’s just constant,” Anderson said of the construction. He said business at the nearby former Wintergarden building, now known as Smokin Joes Family Fun Center, increased during this tourist season compared to previous summers.

Members of the City Council have questioned how the Old Falls Street reconstruction, which will be funded through the local share of the slot machine revenue from the Seneca Niagara Casino, would affect Anderson’s vending lease.

Under the East Mall lease, Anderson’s corporation agreed to repave the block with cobblestone or a similar material within the first 15 years of the lease. Anderson said he had planned to do that work.

The council refused to vote Monday on a proposed lease amendment signed by Anderson that stated East Mall Entertainment “does not object to the Old Falls Street project as currently presented.”

Anderson said Wednesday he intends to meet all of the conditions of the agreement, which he can extend for 30 years if he complies with its terms. Under the contract, annual payments for the vending rights began at $7,500 in 2004 and would rise to $22,500 by 2009, with a 5 percent increase each subsequent year.

“I’ll play ball,” Anderson said. “It’s a legal document and I’ll live by it.”

Council Chairman Charles Walker said Wednesday he had just wanted to clarify what Anderson’s role on the walkway will be once the reconstruction is completed in May.

“My issue was never with him personally,” said Walker, who spoke briefly with Anderson after the groundbreaking. “He’s a businessman in the city that’s doing good things.”

Federal investigators that requested documents from City Hall last year questioned city employees about Anderson’s ties to the municipality after Mayor Vince Anello admitted receiving a no-interest business loan from Anderson. Anello has said he had done nothing illegal when he accepted the money. An attorney for Anderson has said the businessman was not the target of the probe.

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