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IDA demands full disclosure on bids for aid

Business owners applying for aid from the Niagara County Industrial Development Agency no longer will be allowed to hide behind the meaningless names of newly created companies to prevent disclosure.

IDA Chairman Henry M. Sloma directed the agency staff during Thursday's board meeting to amend application forms to require that names of the owners of limited-liability companies be listed.

Sloma noted that almost every application the IDA gets for a new project involves creating a new corporate name for tax purposes but that this obscures the applicants' identity.

The issue arose as the IDA board approved aid to a Canadian hotel owner who is buying two Niagara Falls hotels formerly owned by John Prozeralik -- the former Clarion Hotel, 7001 Buffalo Ave., and the former Days Inn Fallsview, 401 Buffalo Ave.

Board member Angelo Massaro was suspicious of the application because the ownership of the newly created companies buying the hotels was unidentified.

Niagara Group Hotels, buying the Clarion, and Niagara Hospitalities, buying the Days Inn, are headed by Mangat "Mike" Verma, who owns the Villager Lodge, the Knights Inn and the Knights Inn by the Falls in Niagara Falls, Ont.

The hotel applications cite the investors as Pinnacle Hotels, 35 percent; 1205850 Alberta Ltd., 32 percent; and 2088388 Ontario Ltd., 33 percent. Massaro found those listings unenlightening. "I don't know who they are. I don't know the extent of the ownership," said Massaro, who told Verma he was only trying to protect the IDA and the taxing entities that would forgo revenue under the deal.

Verma said Pinnacle consists of himself, his brother and his brother-in-law. He would not say who owns the other companies, but said they are all Canadians.

The board unanimously approved the aid for Verma's group. The former Clarion, to be the scene of a $4 million purchase and renovation, will receive a 10-year property tax break on its increased value. It also receives exemptions from sales taxes on construction materials and the mortgage recording tax.

The former Days Inn, which is getting a $6 million purchase and makeover, takes only the sales and mortgage tax breaks from the IDA, because the city will grant a property tax break under the Empire Zone program.


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