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The City Council reaffirmed its support of a proposed $111 million factory outlet shopping mall Monday by defeating two resolutions by Councilman Jacob A. Palillo.

Palillo sought to repeal a December Council action that committed the city to pursue the mall. When that failed, he attempted to put the December resolution "on hold," while the city sought an opinion from the state attorney general on the measure's legality.

Both resolutions were defeated by 5-2 votes, with Republicans Barbara A. Geracitano and Palillo casting the only votes in favor. The four Democrats on the Council -- Henry J. Buchalski, Anthony F. Quaranto, Anthony J. Rendina and Guy T. Sottile -- stuck together and were joined by Republican Michael S. Gawel in opposing the measure.

The Council's Dec. 11 resolution authorized the mayor to take the necessary steps to further the mall development, including removing the city from the Niagara County sales tax distribution system, transfering to the Urban Renewal Agency all properties on the East Side mall site that the city already owns, and seeking other sources of funding.

The resolution commits the city to come up with the money to complete the $31 million in public improvements needed for the project if no other sources of funding are found. The resolution was adopted before Palillo and Gawel took office Jan. 1.

The Benderson Development Co., which owns the Niagara Factory Outlet Mall on Military Road, is proposing to build the new mall on a 100-acre site on the East Side with $80 million in private financing.

Palillo opposes the Dec. 11 resolution because, he said, it gives the mayor "carte blanche to do whatever he wanted to bring the mall to fruition." Palillo said the Council has given away its right of final approval.

But, Quaranto and Assistant Corporation Council William W. Zarr said the mayor must bring the final agreement with the mall's developer back to the Council for approval.

"We have the last word," Quaranto said. "If the Council continues to fight the administration constantly the developer is going to pick up his marbles and walk away. The Council has given its good faith."

Zarr said the Council hasn't given away any of its rights. He said "it exercised its rights" in December when it voted to support the mall and authorized the mayor to proceed.

Larry Krizan, coordinator of development services, agreed with Zarr.

"You refer to it as the mayor's project. The City Council adopted it as its project when it passed the resolution," Krizan said.

Palillo also opposes the terms of a tentative agreement under which the Urban Renewal Agency would lease about 1.2 million square feet of property to Benderson for $1 a year for 99 years. The lease would include the "footprint" of the development only, not parking lots, Krizan said.

Krizan said the lease was one of the ingredients the city used to sweeten the pot for the Bendersons, who Krizan said wanted a deal similar to one talked about for the Ghermezian brothers of Edmonton, Alberta, who in said in 1986 that they would build a $1.2 billion mega-mall on the same site. The state had offered the Ghermezians $400 million in in centives, including free land, low-interest loans and tax breaks. The Ghermezian plan never materialized.

The Bendersons "came to us looking for the Ghermezian deal. We bought their interest in the downtown by making the same offer the suburbs would make, like land. A suburb in Canada offered them free land and construction grants," Krizan said.

In voting against Palillo's resolution, Gawel, who is a lawyer, said he was not in favor of the December resolution nor in giving power away to the mayor.

"But it was not illegal," he said. He said he would have liked to vote for Palillo's resolution because it would give more power to Council members. "But I was elected to represent the people, not get more power for me."

Mrs. Geracitano said she is not against the development, but that she doesn't believe the mayor is keeping the Council fully informed.

Sottile said he voted against the December resolution because the mayor was already authorized to negotiate by the City Charter. Sottile also said he supports the mall but wants more information. Despite his earlier stand, Sottile voted against Palillo's move to have the earlier approvals rescinded.

Palillo said he wanted "one thing straight off the bat -- It's not Jake against the Bendersons. I'm not opposed to development in our city. I'm opposed to the giveaway deals we've had to live with for the past 20 or 25 years."

Council Chairman Henry J. Buchalski, in voting against Palillo's resolution, said:

"It all boils down to one thing. We have seven responsible citizens of Niagara Falls that are voting on the future of Niagara Falls to the best of our ability."

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