No progress evident as Falls Council again tackles Hamister dispute - The Buffalo News

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No progress evident as Falls Council again tackles Hamister dispute

NIAGARA FALLS – The governor has pledged to make it happen. The mayor has been onboard with it.

But the three-member City Council majority has yet to make a decision on the Hamister Group’s plans for a $25.3 million hotel, apartment and retail complex that many believe would be an important economic-development project for downtown Niagara Falls.

Council Chairman Glenn A. Choolokian said he continues to harbor concerns about a proposed agreement with the Hamister Group project.

“My stance hasn’t changed on anything,” Choolokian said Friday.

When asked what the Council majority may do about the proposal when it meets today, Choolokian did not shut the door on a possible deal but also did not indicate that a vote could happen.

Choolokian, whose majority tabled the deal in July, said he is interested to see if there are any updates today from either the Dyster administration or Corporation Counsel Craig H. Johnson.

“Maybe there will be a miracle,” Choolokian said.

The Council is being asked to allow the city to sell the land at 310 Rainbow Blvd. and allow Mayor Paul A. Dyster and his administration to negotiate and sign a development agreement for the site with the Hamister Group, which has proposed a five-story project with a 114-room hotel, 24 apartments and up to 8,000 square feet of street-level retail space.

A 10-page memo from Dyster to the Council dated July 2 outlined terms of a resolution that lawmakers were being asked to approve, along with a 17-point term sheet, which the mayor said actually goes beyond what’s typically put on paper at this point in an approval process.

Dyster has argued that what the Council is looking to include now is what is typically negotiated when the details of an agreement are worked out after Council approval.

Choolokian said the Council is “interested in taking all the gray areas out” in order to reach a deal that “protects taxpayers.”

But what gray areas remain?

Aug. 5, the Council majority sent a memo to the corporation counsel that added six issues to its existing list of four, bringing the total to 10 issues that the three-member majority has concerning the project.

Johnson, after consultation with representatives of USA Niagara Development Corp. who were in contact with Hamister, responded to the majority with a three-page memo Aug. 14 addressing each of the 10 issues. A copy of the memo was obtained by The Buffalo News from the City Council’s Office.

Choolokian said the reply “wasn’t really answers” to the questions of the Council majority, which also includes Councilmen Robert A. Anderson Jr. and Samuel F. Fruscione.

One of his continuing concerns, Choolokian said Friday, was that the project may receive benefits of “Start-up NY” tax-free zones, because of the site’s proximity to Niagara County Community College’s Niagara Falls Culinary Institute.

But in Johnson’s Aug. 14 memo, he wrote that developer Mark E. Hamister “will agree not to pursue” any tax-free zone designation.

When asked about Johnson’s memo and Hamister’s Sept. 6 statement to The News that he would not pursue – and that he may not even be eligible for – such benefits, Choolokian said that such an assertion “is easy to say” but doesn’t mean much to him unless something is signed.

Choolokian said he also still has concerns about the amount of money the city would receive in exchange for the land, as well as whether Hamister has the finances in place for the project.

When asked about Hamister’s ongoing $41 million project at the Tishman Building in Buffalo, Choolokian brought up Hamister’s failed attempt to purchase the Buffalo Sabres in 2003. Hamister pulled out of contention after he met government resistance to a request for $40 million in public financing. The Hamister Group manages hotels and health care facilities in several states.

Other issues among the 10 concerns related to the powers of the Council through the rest of the development process, the term “affiliate” in the agreement documents, the “reverter clause,” the hotel’s rating, a guarantee on the number of rooms, the need for local hiring, the terms of any payment-in-lieu-of-taxes, or PILOT, agreement and potential parking revenue from the site.

Hamister has previously called the Council’s issues “red herrings,” saying he believes that such issues have never been made part of any project previously submitted to the Council.

The parcel at 310 Rainbow was donated to the city, and its value was considered the city’s contribution to the deal as part of the overall agreement, which also includes a $2.75 million subsidy from USA Niagara Development, the state’s economic-development agency in the Falls.

Originally, the city was to receive no payment for the land, but the Falls is now in line to receive $100,000.

In his Aug. 14 memo, Johnson told the Council majority, “As you requested, I attempted to obtain a higher price for this parcel, but was unsuccessful.”

In terms of local labor, the developer has agreed to “endeavor … to the fullest extent practical” to use contractors from Erie and Niagara counties. The project would also have a goal for minority- and women-owned businesses of 30 percent of the state aid received, Johnson wrote in his Aug. 14 memo.

Hamister has also agreed not to seek anything more than a standard, 10-year PILOT agreement for the project, which Johnson wrote and which Hamister previously told The News.

Hamister, who was designated as the preferred developer for the project in early 2012 after a public bidding process, nearly walked away from the proposal earlier this month after a political mailer accused him of “running a con game on the City of Niagara Falls.”

After Gov. Andrew M. Cuomo personally intervened, Hamister decided to give the process more time.

“We are in the final stages of fine-tuning some points within the development agreement with USA Niagara while we await approval from the City Council,” Hamister spokeswoman Andrea Colao Czopp said Friday.

Dyster, who has previously said the Council is, at best, stalling with regard to its approval, said he believes that any outstanding issues were addressed fundamentally in the Aug. 14 memo. But Dyster left the door open for further discussion. “There’s still a willingness on the part of everyone associated with the project to answer additional questions or to meet with additional people,” he said.


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