NIAGARA FALLS -- The City Council may dust off a 4-year-old plan to try to get its problems with the Niagara Splash water park off dead center. Those problems have been languishing in foreclosure court for three years.
The details of the Council's latest idea for the splash park have not been made public but they could be similar to a 1991 plan under which the city was to have formed a not-for-profit corporation to acquire the park.
With so little time between now and summer, it was not clear Wednesday whether a plan could be in place soon enough to allow the park to be opened this year. But Council Chairman John G. Accardo said the chances of the city putting up money to operate the park this summer would be improved if there were a long-range blueprint to continue its operation.
Over the past several years, the Council has considered several attempts to sell the park to non-profit corporations, including a corporation that the city itself would have formed. Accardo, who was not a member of the Council in 1991, said he was not familiar with the details of that plan, but said it probably was worth another look. That plan "could be similar" to one being discussed informally among members of the Council, he said.
The Council rejected the 1991 plan that would have called for the city to form an independent not-for-profit corporation, tentatively called Newcorp, that would have acquired the park by borrowing $18 million to $20 million through tax-exempt bonds to be sold to private investors. A group that included owners of bonds for other downtown projects was prepared to purchase the bonds. The other downtown projects, like the splash park, were built by the Niagara Venture development group.
The bonds were to be repaid solely out of revenue from the park. No taxpayer money was to be used and neither the city nor Newcorp were to have any liability to repay the bonds. The private funds generated by the bond sale were to be applied as payment for the park's outstanding obligations to the city.
Newcorp would have hired an independent management company to operate and promote the park. The risk that revenue might not be sufficient to repay the bonds was to be accepted by the bond buyers. The city expected to pay a higher interest rate because of the risk.
City officials considered obtaining the splash park through foreclosure at the time, but they said said the non-profit corporation would have provided a better chance for the city to recoup the more than $10 million it claimed the park owed. The Council eventually turned down the plan, by a 4-3 vote. Of the Council members still in office, Councilman Guy T. Sottile was in favor and Council members Barbara A. Geracitano and Anthony F. Quaranto were opposed. Mayor Jacob A. Palillo, then a councilman, opposed the plan in part because, he said, it would have bound the city to ownership of the park for 20 to 25 years, or for the life of the bonds.
In April, 1992, Palillo, who by then had become mayor, started a foreclosure proceeding. The following month, John P. Bartolomei, a principal in Niagara Venture, sought to avert the foreclosure action by asking the city to reconsider the proposal for a non-profit corporation.
William F. Savino, the lawyer representing the city in the foreclosure, said the city would make a motion next month for a summary judgment which would transfer ownership of the park to the city. If things go "very smoothly," the case could be resolved this summer, he said.
City officials have hoped to find a buyer for the park and have generally maintained that the park could be sold more easily sold if it were open for business than if it were closed. The park has been open every summer, but it currently is closed for the off-season.
The city could get some help to operate the park this year by using federal funds from Niagara County for summer jobs. But the city still would need other funds for start-up costs nd it must find a long-range solution, Accardo said.
Accardo, who has been a supporter of keeping the park open as an aid to tourism and to the city's economy, said there is a law of diminishing returns if the park is not opened this summer. A permanent solution, he said, could address that and could alleviate the need for the last minute, crisis decisions such as the city has faced for the past two years on whether to open the park.
Such a solution also could give the park the stability it needs to make it profitable. He said part of the problem is that last-minute decisions to open the park in previous summers have prevented the park from taking advantage of corporate business, such as company picnics. Those picnics usually are scheduled the previous fall.