Five years ago, the Niagara Falls Bridge Commission gave away a sliver of land, with no strings attached, to help a high-profile tourist development alongside the Rainbow Bridge.
The project, an underground aquarium named AquaFalls, became the city's most notorious development failure.
New owners have taken control of the AquaFalls property, but a former owner who still owns the strip of land wants to use it to settle old debts with other figures in the failed project.
Grand Island businessman and industrial waste magnate James "Harry" Williams asked the new owners for up to $600,000 for a piece of once-public property that he got for free.
An assemblyman with a keen interest in how public authorities dispense money and property wants to know how that could happen, and on Friday promised to get answers.
Among his questions: How could public land be given away without an appraisal, or even a board vote? And with no legal language to get the land back if the project failed?
"We're going to find out what happened, bottom line," said Assembly Democrat Richard Brodsky, chairman of the Committee on Corporations, Authorities and Commissions.
Bridge Commission attorney James Roscetti said there's nothing wrong.
That's because the commission doesn't have to follow rules for public agencies, Roscetti said.
"Say the Boys' Club wanted to sell a piece of property? They'd have to get a court order," he said. "This entity doesn't have to do that."
Roscetti said he didn't object to land donated for a public purpose being put to private use.
"I don't think there's anything wrong with that, legally, or morally, either," he said.
Brodsky called the assertion that a public authority didn't have to follow standards for putting real estate into private hands "just tragically wrong, and disturbing."
The parcel, a fifth of an acre, was state Department of Transportation property before it was transferred to the Bridge Commission for use in constructing its Rainbow Bridge plaza.
In 2000, after then Niagara Falls Mayor Irene Elia asked the commission to turn over the land, the commission complied, Roscetti said. The city had previously given the commission a piece of property in the bridge plaza area, he noted.
"I think it's good neighbor, good politics, just helping out," Roscetti said. "Why should we extort money from somebody for a piece of property that's not worth much to anybody?"
DOT waived rights
There was no reason to add "reversion rights" to the deed, ensuring the commission would get the land back if the project failed, Roscetti said, because such a clause would have scared off bankers.
"You couldn't borrow money against the property, which would defeat the purpose of having the property," he said.
The commission did persuade DOT to waive its reversion rights. The state's waiver was based on the commission's claim that the parcel was "necessary in the construction of a world-class aquarium" to be "an important tourist/ economic development project."
But the AquaFalls project foundered, unable to find financing. Williams and his family split with the other owners, Gilles Assouline and David Ho. They still owe Williams roughly $600,000 to $800,000, including interest, he said Friday.
Buffalo developer Frank Parlato now owns half of the project, and Ho and Assouline quietly maintain interest in the other half, Williams asserted.
Land seen as leverage
Parlato contradicted Williams, saying the former owners have no financial interest in the current firm.
The strip, which is part of the AquaFalls excavation, is essentially worthless and unbuildable, Williams said. In fact, he said, if the commission asked for the land back, "we'd probably just give it to them."
"We have no real interest in the property ourselves," Williams said, "except as leverage to get the money owed us by the previous owners, who still own half."
The disagreement over the strip won't stop the new project, One Niagara, from completion, Parlato said.
"Come hell or high water," he said, "I'm going to finish this project."