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Niagara IDA considering another hotel project

WHEATFIELD – The board of the Niagara County Industrial Development Agency decided last week that it likes its current policy on providing tax breaks to Niagara Falls hotels, and scheduled action on another one.

A vote is expected Monday on a 10-year tax abatement for Rupal Corp., the owners of the former EconoLodge at 200 Rainbow Blvd. in the Falls.

Company vice president Nirel Patel said the family-owned business plans to increase the 44-room motel to a 110-room “upper-midscale hotel” with an indoor swimming pool, an arcade and ground-level retail space available for lease.

The facility dropped the EconoLodge name in January and is now operating as the Red Maple Inn, but Patel said the name will change again to a national brand name, which he said hasn’t been nailed down yet. But he made it clear he believes the facility needs to be bigger, brighter and shinier, especially considering its location.

“That EconoLodge is two blocks from the state park,” he said. “An economy property that close to the state park is not doing the destination justice. … Our goal here is to upgrade it substantially.”

The current three-story hotel will have two floors added atop it, and a new five-story modular building will be erected beside it. The new building will consist of “modular boxes” made in Pennsylvania, and that’s why IDA board member Michael W. McNally voted against even considering the application for assistance.

“Lack of local labor and lack of local supplies,” explained McNally, the business manager of Local 22 of the Plumbers and Steamfitters Union. “If we’re giving tax breaks to local companies, they should be built here.” He also said he was concerned about the quality of such structures.

The $11.3 million project is supposed to boost the hotel’s employment from the current seven workers to 24, the application says. The reduced property taxes and an exemption from paying sales tax on building materials and equipment would save the hotel $2.14 million over 10 years, the IDA staff calculated.

This would be the 14th hotel construction or makeover project in Niagara Falls that the IDA has assisted since 2012, totaling 1,210 rooms, the equivalent of 375 full-time jobs and $135 million in capital investment.

At an Aug. 26 rally, local labor unions criticized the IDA’s policy of offering tax breaks to small motels. Spokesmen argued that the incentives should be saved for big hotels that would produce more jobs.

After a board discussion last week, IDA Chairman Henry M. Sloma said, “We’re good with the position we’ve been taking and we will continue with it, irrespective of whether it’s small or big.”

He said the IDA is working to transform the Niagara Falls tourism market, and for that the city needs good hotels “for people who can’t afford four- or five-star hotels.”

“We needed an airport. We did that. Now we’re rebuilding all the hotels, and there’s more pieces to come. This is an important point in history. Drive around and look. It’s happening,” Sloma said.

email: tprohaska@buffnews.com